4S Ranch – (3000+sq/ft update) Pienza / Evergreen / Maybeck

[no_such_reality]

Those prices are about level with last fall are they not?

Overall the price is off about 15-20% from peak correct?

How is the price per/sq ft holding up? Granted, they’re huge which drives the price/ft down, but $243 seems really low. Or maybe I’ve just been staring at condos in Irvine with $500/ft tags too long.

[PerryChase]

I agree with you, MANmom. I’m not buying either.

Resellers can afford to hold on longer because they don’t have quarterly earnings target to meet. It takes several years of a down market to wear-down existing homeowners.

There’s also a good chance that builders will pay the Mello-Roos in new projects. See related thread:

http://piggington.com/pardee_homes_drops_mello_roos_in_new_development_in_moorpark_ven

The LA market is stronger than San Diego’s yet you’re seeing this kind of change there. My feeling is that builders won’t drop Mello Roos in existing developments. They’ll close them out then start new projects next door that interestingly don’t have Mello-Roos to avoid upsetting existing homeowners. Can’t wait to see when that happens in San Diego.

[outtamojo]

Are those prices the actual price the sale was consumated at(including any incentives)? How did you obtain that info? Or are those prices just from the most recent flyer?

[4Sbuyer2002]

The numbers I posted and used in the average calculations were all completed sales. A few had been sold twice (original buyer backed out) and resold. In the case of Pienza, they had a phase release on Saturday with 7 homes available. By 3:00pm 6 of the 7 were sold.

grateful owner . . . .

[nestingcouple]

I think the sale price does not reflect the $20K or $15K lender mortgage incentives (depending on which house you buy).

[outtamojo]

Yeah, I would love to find out the ACTUAL price they sold for, not the prices listed on a flyer. Here in Monterey County, a neighbor had his home listed for 740K on a flyer but the actual sold price was 630K (After trying to sell for 2 years).

[4Sbuyer2002]

These are the “actual sale” prices of what had sold as of 3:00pm on Saturday when I went to each office and spoke in person with the rep in the office. I asked “are these the actual sale prices?” She/he said yes. Could she have lied? Of course. No I didn’t see the signed contract. However, these are NOT the flyer for what is currently available. They also indicated that they had no problem selling the units at the prices she quoted me. This explains why 6 of 7 homes sold in 6 hours from the time the phase was released in the case of Pienza.

They are actual sale prices. I did not ask re incentives. I should have. In the case of Pienza I know that they had a $40k incentive at the end of last year and cut it to $20k early this year. Whether it is still $20k, back to $40k, or zero . . . don’t know.

grateful owner . . . .

[5yearwaiter]

5yearswaiter

I doubt those are actual prices, those are same as listed prices. I know one person who signed at 4S Ranch with other builder almost 100K less price to the listings, but that is perhaps with Sheliac homes (something like that). Also when I went to visit Evergreen month back the Old Lady mermerig there is some outstanding deal on the clude Sac Plot …. also this is something Paper bookings not yet fully confirmed and passed through the Escrow and all. Just wait how many come out of this loop and see them as OPEN houses before the Constrction .. starts.

Note :- Each phase Lender finance just 6 houses or 10.

[wantobuy]

Both Pienza and Maybeck said they would have price increase in next release (Maybeck says $10K increase). With so much news coverage on subprime problems/declining sales, I believe recent buyers are well educated on the market condition and will have no problem riding out the down market, I think we’ll see less and less falling out of new home contracts because the builders ask for bigger deposits. I asked the sales persons in both Pienza and Silhouette, the number of contingent buyers are small. I’ve somehow lost confidence in that we’d see a $80K-$100K price drop again like we saw in the last 6 months in 2006 in 4S ranch for 3000+ houses. Rent is not much cheaper than mortgage. Builders lead the price drop. It’ll take a few years for the resale homes to be comparable to the new houses, by then who know what may happen, the inflation may catch up and the expected price drop may not have materialized.
Tied of checking out market news every day, guilt of wife pressure, will buy new soon, even if the price is going to drop $50K or $100K in the next a few years.

[Cow_tipping]

If builders ask for a larger and larger deposits, say from the current 0% it goes to say 5%, the available pool of buyer will shrink to 10% of what it is now. Make it 10% on a 500K house and you’re looking at 1% or less of the available current looky lou’s. BTW a 10% drop will cut me out of the market, and I am a steadily employed software engineer who cleared close to 80K last year and dont have a 1000 expensive worthless toys I wasted my $$ on. essentially I dont have debt at all except my house which cost 150K brand new in 03 and its financed at 5% fixed on a 15 year fully amortising mortgage which I always paid atleast 10% more each month.
Tighten credit standards, same result. Even a small amount will rapidly shrink the pool of eligible buyers.
Cool.
Cow_tipping.

[no_such_reality]

I asked the sales persons

Why would you believe what the sales person says is happening? They only get paid if you buy. There are many articles where buyers are protesting saying the sales people said the next phase would be X and it isn’t. Or sales people said the builder would never, and they are.

Tied of checking out market news every day, guilt of wife pressure, will buy new soon

Go forth an buy then, as you say, if you loose $100K it doesn’t matter to you.

[SD Realtor]

I agree with Manmon –

The builders are always much more aggressive in pricing nad always will be. They have the margin to do so and most important they are unattached emotionally to the home and unencumbered financially. This fact will never ever change. I also agree that the MR and HOA fees are a big turnoff. Not to mention the possibility of a new private transfer tax that I posted about earlier. The builders make money no matter what. Resellers pretty much do not get it until it is to late.

Regarding the sales prices I absolutely believe those to be true. The current incentives at most 4s Ranch releases are identical across the board, 20k incentives IF AND ONLY IF you use the in house lender. People don’t believe that you can trade off the incentives for cash or reduced purchase price it does not happen. I am not saying you can’t try to negotiate the price down, I am saying that incentives do not mark down the sales price. There is not even close to a dollar for dollar value on incentives.

As much as most people posting don’t want to believe it, the builders will always scale back, slow down phasing, and price enough to sell. I do believe it will slow down in the summer and fall like last year.

SD Realtor

[4Sbuyer2002]

Its true . . . anyone can lie about anything. However, as an attorney who has practiced RE law, I can tell you that if I spoke to an official representative of a builder and she told me “these are the sale prices” and that was an out and out lie, they could easily be sued for fraud should someone make a buying decision influenced by that statement. Most builders are very careful in this area. Especially in today’s market. I doubt she lied when she said “these are the sale prices.” The potential liability to the seller far outweighs any sort of percieved benefit of comforting perspective sellers that prices are stable.

grateful owner . . . .

[Bugs]

As I watch these builders ratchet their prices down, I can’t help but laugh a little.

Remember that one of the arguments our permabull friends used to make about the New Paradigm/Soft Landing/New Reality was that costs had gone up and the prices simply couldn’t decline past costs? I do. Apparently these builders can reduce costs and stay in business, and the reason for that is because costs had almost nothing to do with the extent to which the prices increased. Everyone in the process, from the materials suppliers to the agents were pullling in outsized profits as result of the demand and the market psychology.

Yes, it costs more to build here than in most areas of the Midwest; but except for the government fees and possibly the workman’s comp insurance the difference is only about 15%. Not 300% like the bulls would have us believe.

From the land to the selling agent’s commission, there’s gas all through the pipeline that can be purged to get us back to $300k tract houses if that’s where the demand (and the mortgage interest rates) ends up.

[Bugs]

One more thing – about the sales agents comments on sale prices, the final price of the sale may (or may not) come in as stated, but that doesn’t mean that said sale price doesn’t include options, upgrades, incentives, cash back or other card tricks that weren’t going on 2 years ago.

I’ve seen how much a builder charges for upgrades and options when the market will bear it. That’s how an advertised price of $700k for a model ended up going out the door for $900k by the time it was all done. Analyzing those sales always included me asking for the price breakdown from the sales staff so that I could see and adjust for the differences in options and upgrades among the sales.

I wouldn’t interpret that agent’s comments as being indicative of the entire story.

[Author]

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