4S Ranch Update

[SD Realtor]

This is scary indeed.

Was up at 4S today showing a very nice couple some homes. They knew the area very well. We visited Pienza, Silhouette, Evergreen, and one other, it has a Jane in it, Sarah Jane or something like that. The traffic at every sales office was heavy… not brisk, not well done… heavy. Furthermore these developments are now squeezing things by only offering 6-8 homes in the current phase, (which by the way will not be completed until late q3/early q4 timeframe). I had not been to any of the sales offices in 4S since October and they were virtually empty. Similarly the couple I was with also had been in the sales offices a few months back and they two were surprised at the traffic.

Please understand, this post is meant as a simple data point, for one day out of the year. I am not saying there are not alot of foreclosures, nor am I trying to convince anyone to buy now, or tell us how much you do or do not like 4S. I am just saying that it was very very busy today. Most of the buyers seemed to be families or young couples looking to buy a home to start a family.

The salespeople I spoke to each said that the traffic has been like this the past few weeks. The incentives are all down to 20k if you used the preferred lenders. (at least at these 4 developments)

[Anonymous]

Just a few thoughts here. I am asking myself, “What has changed from November to now,” and I’m left with only one answer, time. Nobody wanted to buy a home, or look at one, back in November, and most were probably looking forward to a sure Spring bounce. They are looking now because they think they can get in before the bounce, and they don’t want to miss builder incentives that may go away if there is one. It made sense to wait through the holidays, but now they are getting anxious and starting to look.

[hipmatt]

OMG, I better buy now or I’ll get priced out of the market, then what?

[Ranjan]

Hello SD Realtor,

Just a quick question for you.

Whatever sales that you have seen or executed thus far in 2007, what’s the general trend as far accepted offers go?

Were accepted offers always 5-10% below the list price?
We are actively looking for a home and hence the questions.

Thanks

[JWM in SD]

The only bounce will be the inventory levels and the foreclosure rates. Come on people, don’t fall for this crap…you know better.

[outtamojo]

Traffic usually picks up after the Superbowl. My wife and I actually visited 4S last week – seeemd like an ok neighborhood but the homes were too big for our tastes. We have 2 kids and were wondering how we were ever going to keep those 3500 sq. feet monstrosities clean. Any bargains on the other side of 15 w/out mello-roos and HOAs?

[SD Realtor]

Ranjan –

Two listings that I have sold so far in 07 have been in the 92114 zip code and 92119 respectively. 92114 went at list price with a 3% credit back to the buyer, 92119 went at about 5% below list price. Both were not the greatest homes in the world. We will open escrow on another 92114 home that will close at 1% below list with another 3% credit. Again this home is not in the greatest part of town. I think that the part of town you are looking in will help dictate your strategy. One client I have has submitted 4 offers in the past 3 weeks, all of them well below list price, at least 10% and NONE of the Sellers even responded with a counter. Personally I submitted a lowball in Scripps 2 weeks back that was only a 2% below list price and they did not respond. So where you are looking really will dictate the strategy. If you are looking at a unique type of property that may have been on the market for a long long time then you have more leverage. If you are looking for a family home in a good school district then your leverage may not be so great. Again, let me know the zips you are looking for and I can be more helpful.

SD Realtor

[SD Realtor]

Guys –

Please read my post again, I am not saying anything other then there was heavy traffic at these specific locations. I am not saying this is a bounce, nor am I saying go buy now or don’t go buy now. It is very easy to sit in front of a computer and type based on what you read or your own emotions. It is another thing to be out in the field with buyers or representing sellers, or going to sales offices. I always enjoy Perry’s posts cuz that cat visits more San Diego developments then the any of us here. It is quite obvious foreclosure rates will rise. However all of the posters who were crowing about 25k levels of inventory this spring are auspiciously silent. Personally I have no clue where things are going to go. I want and hope they will go down. A smart person, who posts on this site, told me the market will move with or without you. This is true in all markets, especially real estate. You can say don’t fall for this crap but this is not crap. This is happening. I “think” this is a cyclical rally, (perhaps in response to people lowering prices, or to people waiting out last years decline) and will continue through spring and hopefully peter out as summer sets in. We’ll see…

SD Realtor

[masayako]

SD Realtor,

I can confirm what you saw at 4S ranch. My wife and I visited Evergreen and Maybeck on past Saturday at around 4:00pm.

Both places are packed with about 7-8 peopls in the sales office checking out pricing and talking to the sales agents actively. There are constantly people coming in & out of the model homes. By the way, ‘Residence 3’ at Evergreen looks sharp to me (but the MR & HOA is a killer at 4S). Just my 2 cents.

I am not convinced that this is the bottom. Either way, $800k on a small lot is still not my cup of tea. I’m not a big fan of becoming a mortgage slave of such big loan.

Masayako

[ocrenter]

Guys, guys, guys, did you check out the prices? 3,000 sqft homes starting from the low $700,000! 3,600 sqft run you to low $800,000. Yes these are still high, but they are significantly down from just 6 month to a year ago. Remember, a year ago you can’t get a 3,500 sqft home in 4S Ranch for less than $1 million. 6 months ago we just started seeing 3,000 sqft homes fall to the $800,000 line.

These builders are undercutting folks that bought just 6-12 months ago by $200,000! of course there’s traffic!

Here’s a good example: http://bubbletracking.blogspot.com/2006/12/4closure-ranch-part-v-flip-gone-flop.html

the flipper that purchased this 3,700sqft gem bought it in June of ’06 for $1.1 million. Yes guys, that’s $1.1 million! If I remember right, Evergreen is selling their largest model, ~3,600 sqft for $850,000.

This is good news guys!

[PD]

I’ve posted before that I think we are going to see a bit of an uptick. Downward trends frequently have little teeth on them (that are going to bite the buyers). The unknown right now is exactly how the subprime events from last week are going to affect the market.

[Ranjan]

Hi SD Realtor,

Thanks for your reply.
I am looking at some houses in 92129 zip code. ( Rancho PQ).
There is nothing unique about the properties I am looking at. Simple attached homes( 2-unit Condo), around 1700 sqft each and one of them has quite a large yard but not in great shape.
The area and community is very desirable and closer to my work. One of the houses in listed @499k and the other is @ 525k(one with bigger yard).

What should be a resonable offer to put in these cases?

Thanks

[recordsclerk]

I was at Evergreen last month. It wasn’t busy, but there were other perspective buyers and people like me just window shopping. Evergreen in 4S in very nice. Probably the best value for homes over 3000sq ft. It is still over priced and the MR, HOA are very high. This is one of the places I would like to buy someday. The lot is very small. Ivy Gate in 4S ranch has larger lots, but the prices are in the 1.4-1.8 million range. If prices come down 30-50%, I would seriously think about purchasing an Ivy Gate home. Ivy Gate has a lower HOA and Tax rate of 1.4%.

[JJGittes]

What is the Mello Roos and HOA in the lower ($600-800k) priced 4S neighborhoods? Has anyone heard of builders ‘incentivising’ away MR in any of the 4s neighborhoods?

[barnaby33]

Please read my post again, I am not saying anything other then there was heavy traffic at these specific locations. I am not saying this is a bounce, nor am I saying go buy now or don’t go buy now.

SD R, I for one believe you. I have been suspiciously silent because I haven’t had much to say. Hey I was even planning to have a party when inventory hit 25k. I guess I’ll just have to keep the Mexican finger traps and party hats packed up a little longer, drat.

Josh

[Author]

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