how low can 4S ranch new homes go?

[kicksavedave]

[quote=paranoid]gn:
If banks are in denial and not willing to “give away” their lands, particularly with the bailout money from the taxpayers, this transfer of lands from one builder to another at much lower price may not happen for quite some time. doesn’t this mean that the new house price will not go down for quite some time?

Banks with the bailout are much stronger than individuals. It will mean that the next major price reduction will be led by existing home sellers, not by home builders (new homes). [/quote]

This is probably the most accurate statement. I have personal experience on this situation. Last year, in Denver I bought house number 65 out of a planned 400 house development by Centex. Around house number 75 the builder simply stopped operating in Colorado, finished the work in progress and left a warranty office, but no new sales operations. So now a huge amount of vacant land and some vacant lots scattered within the original phase remains. Centex already built very low cost affordable housing, and couldnt make it work. So what other builder is going to come in and buy up that land and try to make money? If that ever happens, it won’t be until housing prices rise significantly and that could be a decade from now or more. The lots themselves were already valued at barely $10K to $15K, so even if they dropped to zero in a foreclosure sale the economics for a builder doesn’t work until prices rise again.

Oh by the way, good bye park, school, playground, and all the other goodies that were talked about in the sales process but never contractually committed to.

So if the builders pull out of 4S, it will likely be a loooong long time before another builder buys up that land, unless it really is a foreclosure fire sale. Possibly the TARP or Bailout du Jour might help the banks to liquidate that land cheap, but I wouldn’t bet on that.

[recordsclerk]

I would suggest that we look at what has happened in other areas that have fallen further. Temecula has projects that are being finished at would appear to be below cost for the builder. Either they have to sell at a loss or they have already paid for the land/improvements and it is better for them to sell the land with built product then sell the land at a steep discount. If you can sell a 3000sqft home for $100sqft in Temecula and $150sqft in Chula Vista, then you can do the same in 4Sranch. 4S has been able to dodge the bullet longer then those other areas for now. There may be enough demand to the dodge the bullet even longer at the current prices as long as people keep the builders open for business. I see the builders continuing to reduce price in small increments at a slow pace until there is no demand at the pace. They will continue to match price with must sell inventory and other builders until the other one makes a move. These moves have been painfully slow up to this point and have been brutally frustrating for would be buyers.

[recordsclerk]

I would suggest that we look at what has happened in other areas that have fallen further. Temecula has projects that are being finished at would appear to be below cost for the builder. Either they have to sell at a loss or they have already paid for the land/improvements and it is better for them to sell the land with built product then sell the land at a steep discount. If you can sell a 3000sqft home for $100sqft in Temecula and $150sqft in Chula Vista, then you can do the same in 4Sranch. 4S has been able to dodge the bullet longer then those other areas for now. There may be enough demand to the dodge the bullet even longer at the current prices as long as people keep the builders open for business. I see the builders continuing to reduce price in small increments at a slow pace until there is no demand at the pace. They will continue to match price with must sell inventory and other builders until the other one makes a move. These moves have been painfully slow up to this point and have been brutally frustrating for would be buyers.

[recordsclerk]

I would suggest that we look at what has happened in other areas that have fallen further. Temecula has projects that are being finished at would appear to be below cost for the builder. Either they have to sell at a loss or they have already paid for the land/improvements and it is better for them to sell the land with built product then sell the land at a steep discount. If you can sell a 3000sqft home for $100sqft in Temecula and $150sqft in Chula Vista, then you can do the same in 4Sranch. 4S has been able to dodge the bullet longer then those other areas for now. There may be enough demand to the dodge the bullet even longer at the current prices as long as people keep the builders open for business. I see the builders continuing to reduce price in small increments at a slow pace until there is no demand at the pace. They will continue to match price with must sell inventory and other builders until the other one makes a move. These moves have been painfully slow up to this point and have been brutally frustrating for would be buyers.

[recordsclerk]

I would suggest that we look at what has happened in other areas that have fallen further. Temecula has projects that are being finished at would appear to be below cost for the builder. Either they have to sell at a loss or they have already paid for the land/improvements and it is better for them to sell the land with built product then sell the land at a steep discount. If you can sell a 3000sqft home for $100sqft in Temecula and $150sqft in Chula Vista, then you can do the same in 4Sranch. 4S has been able to dodge the bullet longer then those other areas for now. There may be enough demand to the dodge the bullet even longer at the current prices as long as people keep the builders open for business. I see the builders continuing to reduce price in small increments at a slow pace until there is no demand at the pace. They will continue to match price with must sell inventory and other builders until the other one makes a move. These moves have been painfully slow up to this point and have been brutally frustrating for would be buyers.

[recordsclerk]

I would suggest that we look at what has happened in other areas that have fallen further. Temecula has projects that are being finished at would appear to be below cost for the builder. Either they have to sell at a loss or they have already paid for the land/improvements and it is better for them to sell the land with built product then sell the land at a steep discount. If you can sell a 3000sqft home for $100sqft in Temecula and $150sqft in Chula Vista, then you can do the same in 4Sranch. 4S has been able to dodge the bullet longer then those other areas for now. There may be enough demand to the dodge the bullet even longer at the current prices as long as people keep the builders open for business. I see the builders continuing to reduce price in small increments at a slow pace until there is no demand at the pace. They will continue to match price with must sell inventory and other builders until the other one makes a move. These moves have been painfully slow up to this point and have been brutally frustrating for would be buyers.

[sdrealtor]

RU undergrad here> Big bro went to RWJ MS.

[sdrealtor]

RU undergrad here> Big bro went to RWJ MS.

[sdrealtor]

RU undergrad here> Big bro went to RWJ MS.

[sdrealtor]

RU undergrad here> Big bro went to RWJ MS.

[sdrealtor]

RU undergrad here> Big bro went to RWJ MS.

[fromnj]

In 4S, it is reaching at $200/sqf for :=3000 sqf new homes. If it was originally selling around $150+/sqf for similar house (3000 sqf) in 2001 or so, $200 -250/sqf may be a break point. Old properties have a larger lot size, so you may say I cannot compare apples and oranges, but when I see recent closing, there are many homes sold at around $200 – $300/sqf. I am expecting that many deal will be closed around that range for this year at least.

I guess, one of esmith’ predictions : soft landing senario may be the case for next 3 months or so in 2009.

http://sdhpi.blogspot.com/search?updated-min=2008-01-01T00%3A00%3A00-08%3A00&updated-max=2009-01-01T00%3A00%3A00-08%3A00&max-results=27

p.s.
we all went to RU (I went to grad school, my wife went undergrad/MBA). We are hoping scarlet knights will show some heat again this year.

[fromnj]

In 4S, it is reaching at $200/sqf for :=3000 sqf new homes. If it was originally selling around $150+/sqf for similar house (3000 sqf) in 2001 or so, $200 -250/sqf may be a break point. Old properties have a larger lot size, so you may say I cannot compare apples and oranges, but when I see recent closing, there are many homes sold at around $200 – $300/sqf. I am expecting that many deal will be closed around that range for this year at least.

I guess, one of esmith’ predictions : soft landing senario may be the case for next 3 months or so in 2009.

http://sdhpi.blogspot.com/search?updated-min=2008-01-01T00%3A00%3A00-08%3A00&updated-max=2009-01-01T00%3A00%3A00-08%3A00&max-results=27

p.s.
we all went to RU (I went to grad school, my wife went undergrad/MBA). We are hoping scarlet knights will show some heat again this year.

[fromnj]

In 4S, it is reaching at $200/sqf for :=3000 sqf new homes. If it was originally selling around $150+/sqf for similar house (3000 sqf) in 2001 or so, $200 -250/sqf may be a break point. Old properties have a larger lot size, so you may say I cannot compare apples and oranges, but when I see recent closing, there are many homes sold at around $200 – $300/sqf. I am expecting that many deal will be closed around that range for this year at least.

I guess, one of esmith’ predictions : soft landing senario may be the case for next 3 months or so in 2009.

http://sdhpi.blogspot.com/search?updated-min=2008-01-01T00%3A00%3A00-08%3A00&updated-max=2009-01-01T00%3A00%3A00-08%3A00&max-results=27

p.s.
we all went to RU (I went to grad school, my wife went undergrad/MBA). We are hoping scarlet knights will show some heat again this year.

[fromnj]

In 4S, it is reaching at $200/sqf for :=3000 sqf new homes. If it was originally selling around $150+/sqf for similar house (3000 sqf) in 2001 or so, $200 -250/sqf may be a break point. Old properties have a larger lot size, so you may say I cannot compare apples and oranges, but when I see recent closing, there are many homes sold at around $200 – $300/sqf. I am expecting that many deal will be closed around that range for this year at least.

I guess, one of esmith’ predictions : soft landing senario may be the case for next 3 months or so in 2009.

http://sdhpi.blogspot.com/search?updated-min=2008-01-01T00%3A00%3A00-08%3A00&updated-max=2009-01-01T00%3A00%3A00-08%3A00&max-results=27

p.s.
we all went to RU (I went to grad school, my wife went undergrad/MBA). We are hoping scarlet knights will show some heat again this year.

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