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ParticipantKinda depends on the city in question. I saw a good number of projects in El Cajon get fast track approval and city assistance with upzoning, fees and permits in exchange for building projects with smaller unit sizes and higher density.
Every single one of those projects were huge money makers for their developers. I saw a project in Santee get rejected because the city wanted to see more units on that site; the developer re-engineered the site and got several more units on – then the city approved it.
I saw the same thing in National City on a couple occasions, and even the in city of San Diego. Those types of projects can be hugely successful if they aren’t opposed by the NIMBYs.
Participantsdr,
My research was fine, my reporting was not. I apologize for not being more specific about distinguishing between oceanfront and not, or between house and not. My point remains – sales activities for oceanfront homes in north county areas and at the $2,500,000+ mark has dropped off the map over the last 9 months. Do we agree on that or should I be more specific?
ParticipantMy comment was directed toward the west side of the street, which back to the ocean; not the east side of the street which does not.
ParticipantMy brother in law is a construction superintendent for a residential project down in Spring Valley. He’s been saying for years that Spanish is more necessary on those jobsites than English.
ParticipantThe 92067 zip area is all referred to as Rancho Santa Fe; but the areas that are included in the Rancho Santa Fe Covenant are where all the old money is. That’s the area that has its own CC&Rs and it’s own security guard service and has the design review board that controls what the homes look like in the area. These controls result in a community that is more uniform in design and quality and appeal than the outlying areas. The Covenant area is where its at.
The other areas in the 92067 zip are more hit and miss; and the areas adjacent to 92067, like Fairbanks Ranch and Del Mar Country Club are largely considered to be where the new money goes. In the last downturn the RSF Covenant areas barely got touched but all the outlying areas got hammered. I don’t know what’s going to happen this time but I do know there are a lot more pretenders to the RSF Covenant throne out there now than there were 15 years ago.
Some of the spec homes in Carmel Valley are already trying to discount but the sales still arent forthcoming. If you drive through some of these areas you’d think it was a land rush with all the building going on, but many of those homes are not selling. Those few buyers who have the cash are buying what they want, but there aren’t enough of them to absorb the inventory that’s already online and is coming online in the next 12 months.
Coastal properties haven’t been seeing any discounts but they’re also not seeing any sales, either. Encinitas has had no closed sales along Neptune or their other seafront streets in the last 9 months, although there’s one pending right now overlooking Moonlight Beach. There are currently 8 or 9 listings. Solana Beach has had a couple but there are more listings than sales in the last year, which means they have a 1+ year supply of inventory. Oceanside has slowed way down, as has Del Mar and even La Jolla. These last two still have sales but it’s because they have so many more properties on the coast. They’re not selling as many now as they were last year.
More disconcerting is that all of these areas have new construction underway, and half of those are being built by spec builders. At the current rate of sales these homes will either take years to sell or they will be heavily discounted. Something’s gotta give.
ParticipantThe banks usually had relationships with builders who would purchase the property out of foreclosure at a substantial discount, finish the home off (with a new construction loan from the same bank) and then sell the finished home off. Other than the bank taking a bath on the initial loan it worked out for everyone.
A lot of it depended on what stage the construction was in when the original builder walked. If it was still in framing and had been sitting exposed to the elements for a long time the new builder would have to tear out the framing and start over. If it had been roofed and stuccoed the structure could withstand more time and weather without much damage. More than one of these homes burned down under mysterious circumstances either before or after foreclosure.
And no, I am not aware of any half-finished foreclosures yet, but it’s just a matter of time. They’re building so many McMansions in Carmel Valley and wannabe Rancho Santa Fe that I expect some bottomfishing opportunities to crop up in the next year or so. There’s no way all those homes are going to sell given the current pace of sales.
ParticipantThat’s why the builders have been in such a hurry to finish these projects off. They know the clock is ticking and it’s already too late for the projects that aren’t completed, let alone the ones that haven’t poured foundations.
During the last downturn I appraised a whole bunch of homes that were abandoned halfway through construction. They were mostly custom homes rather than subdivisions. Usually the reason they walked was because they ran out of money and had spent the construction funds on other expenses – like eating.
ParticipantTo answer the questions about framing, you’ll find very few subdivisions here that weren’t built with 2×4 framing. All of Bressi Ranch is 2×4; everything I’ve seen in San Elijo and 4s Ranch is 2×4. It’s everywhere. It’s not just the framing either. The roof trusses are 2×4, the fopundations are pured at the minimal depth; the plumbing and electrical schedules are average at best.
That’s not bad in and of itself; there’s nothing wrong with “Average”. It just cracks me up to see the words “luxury”, “custom”, or “quality” used in connection with these projects. People from back east look at this stuff and just smirk.
ParticipantDifferent sections of the market move at different beats – for a while. It’s not a question of “if” but of “when”. This project competes with other product. When the competition starts discounting these guys will follow suit, assuming they haven’t already sold out and left town by then.
ParticipantA lot of people associate mobile/modular homes with being substandard, and there is some of that. But increasingly there’s also some of this factory built housing that’s actually superior in quality to what you’d find at a lot of our local subdivisions. Better materials, better fit, more uniform craftsmanship.
I’ve been in a few of these homes and the only difference you’d notice is that they are usually built with a raised foundation rather than a slab. We’re talking about 2×6 framing, 10ft interior ceilings, solid core doors and everything else that’s important. If anything, they’re more structurally sound than most of the 2×4 tract construction we get around here. They’re built in a controlled environment by a full time crew, using stock plans with several variations and finishes and they get several QC inspections and an enforecable warranty. You wouldn’t mistake them for a luxury home but then again most of the so-called “luxury homes” here are but dressed up tract homes. Not everyone needs a 4,500 SqFt big box.
I read one article a while back that factory built housing now comprises something like 30% of the market on a nationwide basis.
If we were really all about affordable housing, we’d be building a lot more projects featuring these units in the outlying areas.
ParticipantKinda reminds me of the all expenses paid vacations that are offered by the time share folks. The only catch is that you have to sit through their 90 minute (er, 4 hours) presentation on the benefits of joining the fabulous vacation lifestyle.
Uhh, thanks but no thanks. I think I have a root canal scheduled for that day.
ParticipantI wouldn’t rely on zoning as reported by any data service other than the city or county government itself. Zoning reported in databases like Ziprealty are notoriously inaccurate and outdated.
ParticipantI think the exodus of retiring boomers from the metro areas may prove to be a boon for middle America. Some of these agricultural towns that have been dying off because of lack of employment can reorient into retirement-friendly communities. Good for their business communities and tax base and appropriate for someone looking for a slower pace of life. There are still lots of towns in the U.S. where a retiree can buy a property for less than $100k and get away from the urban/suburban lifestyle.
ParticipantI know a lot of people are watching to see what happens here. San Diego has been identified as the canary for what will happen in the “New Paradigm” markets.
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