Big reduction in Carmel Valley

[Daniel]

I would be very surprised if they cancelled ongoing projects in CV. Most likely they will slow down the construction pace, so they will release 6-7 houses per development every, say, 3 months, instead of 6 weeks. If demand falls even further, they might put things on hold for awhile longer.

[zk]

I agree with your assessment, Daniel.

This affects more than just these projects, of course. If they’re building houses at half their previous pace, that’s a problem for some construction workers. Add up all the delays for all the housing projects in San Diego, and there’s lots of money that construction workers won’t be making.

Also, it adds to the change in buyer sentiment.

It all adds up to more bad news for the future of the SD housing market.

[rhinopham]

zk,
I’m closely following Derby Hills too and see at least 3 houses back on the market (sales agent only told me about those 3). How did you get your “9” houses info? I’d love to know that and how to figure out how much their latest phases sold for. I’m of the impression they’re going to have to offer more incentives or lower their prices by Q4.

[zk]

We went by the sales office a few days ago, and they gave us a sheet with 11 lots listed. They had crossed out the two that had sold. The lots still for sale were listed as:

Plan 1: 24,43,72
Plan 2 18,22,42,75
Plan 3 57, 78

As far as figuring out how much their latest phases sold for, you have to take into consideration that when houses aren’t sold at the phase release (or shortly thereafter), the builder makes decisions on lots of the ugrades (so that they can build the house on schedule). So lots of the houses listed above might sell for more than they were asking at the phase release, but have lots of upgrades.

[zk]

Rhinopham,

When did you get the “3 houses” info? If it was in the last couple days, then either they sold 6 houses real quick (ever so doubtful) or they lied to one of us (probably you).

As I mentioned in an earlier post in this thread, Carriage Run agents seemed very reluctant to share information about which houses are available. If Derby Hill is telling some people one thing and others something else, that would be interesting to know. I did notice that when I went in there a month or two ago that there was only one home shown as “available,” but when I asked, I was told about 3 more that were available.

Maybe they’re trying to walk a fine line between scaring the customers (with the information that their houses are hard to sell, and that maybe that’s because the market is crashing) and informing the customers of what houses are available. Perhaps they size up the buyer or something and decide based on that. We’re in the top 5 on the list at DH, so maybe they figure we’re serious (we’re not).

I wonder if there are any agents out there who’ve worked in a sales office of a new home builder who can shed some light on the subject. Or any agent or anyone else who might know what the sales office strategy is.

[zk]

Possibly what they’re doing, now that I think about it, is this: They tell buyers who they’re not sure about that only a couple houses are available. They judge from the buyers reaction (what questions they ask, how interested they seem) whethere they’re a serious buyer. If they judge that they are, then they say, “oh, it turns out that lot 22 is also available. Don’t like 22? Oh, it turns out 57 just came back on.” And so on.

Just a wild guess, really.

Did they ask you which plan you were interested in? If so, were the ones available all that plan? If not, were the 3 that they told you about one of each plan?

[PerryChase]

zk, very interesting look at market psychology. I wonder how creative the salespeople will get. I do think that they size you up and see how serious you are.

[rhinopham]

zk,
We went to the sales office about 2 weeks ago. Our position on the list is about 140 and they know that we’re only interested in the plan 3. The 3 they told me about that were available, 1 was a plan 2 and 2 were plan 3’s. They told me those houses fell out of escrow because the owners were contingent buyers who couldn’t sell their primary homes and couldn’t sport a double mortgage. They also told me that those avaialble would have to close escrow and move in in 30-45 days. I think they only disclosed the plan 3 info since we’re only interested in plan 3. I heard from a Saratoga purchaser that if things continue to be as slow as they are for Derby, they’re considering scrapping the remaining phases and switching them to the smaller Carriage Run/Saratogas that may sell better at lower prices…more interesting every day up there..

[zk]

Sounds like they told you about both the plan 3s available, and threw in a plan 2 just in case you decided to show interest in that plan. Exactly what you’d expect them to do if they wanted to sell you a house, but not worry you about market conditions. I bet if you tell them you’re interested in the plan 2, several other plan 2s besides the one they told you about will “suddenly” be available.

As far as switching them to smaller models, I suppose that’s possible. But most of the lots are relatively big. As you probably know, the “Ridge at Saratoga” was originally supposed to be 3,000-3,600 sf. homes to be sold about 2008. They suddenly changed those to 2500-2750 sf Saratogas and started selling them this summer instead. Trying to beat the crash, I would think. We’ll see how they do.

[solman]

zk,

Saratoga homes barely fit on the Ridge lots. Well, many of the Ridge lots are longer than the home, but certainly not wide enough for a Derby Hill. Some have only 8 feet from house to brick wall on the sides. Derby’s are almost twice as wide as Sara’s.

I seriously doubt Derby will be scrapping future phases to put CR & Saratoga’s on their lots. First of all, it would make the street look inconsistent, with house sizes changing shape suddenly. Second, Derby lots are too large to “waste” on a CR/Sara home. Profit would be lost.

[zk]

Solman,

I agree that Saratoga homes barely fit on the Ridge lots, and that they’re not really big enough for a Derby Hill. All of that notwithstanding, the original plan was to put 3,000-3,600 sf homes on those lots. That is larger than a Saratoga and smaller than a Derby Hill (Derby Hill homes are 3500-4600 sf).

As far as putting CR and Saratoga on DH lots, that was speculation on rhinopham’s part, and, considering the sudden and drastic change in the plans for the Ridge lots, I don’t think it can be ruled out. Of course, putting 3,000-3,600 sf homes or Saratoga homes there seems somewhat less unlikely than putting Carriage Run homes there.

There are plenty of neighborhoods where large and small homes are in close proximity. Steeplechase and Lexington are right next to each other, and they are nearly identical in size to Saratoga (Steeplechase) and Derby Hill (Lexington).

[Bugs]

The finishes have more effect on prices and profits than does the extra square footage.

[Daniel]

Maybe we should take a poll to see how many on this forum are looking at Pardee homes in CV (Arabella, Santa Rosa, Soleil, Derby Hill, Saratoga, etc). I’m one.

[zk]

Depends what you mean by looking. We’re looking, but we’re not buying. Not anytime soon, anyway.

[rhinopham]

We’re contemplating buying but are waiting for a 3B with a decent lot size (not these 6500 sq ft insults that they’re putting out right now). By the time those prime lots are scheduled for release (Q3/4 next year) the market should have softened/buckled enough where bargaining for options/reductions should be realistic. Again, info regarding recent phase selling prices would be invaluable info for those on the bench right now.

[Author]

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