La Boheme North Park (DR Horton) Public Auction

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Submitted by movielover on September 4, 2007 - 1:42pm

I had lunch at the Lumberjack over the weekend and noticed that DR Horton's La Boheme in North Park across the street is now up for grabs at a public auction.

http://www.redchomeauction.com/auction_d...

They are selling 54 condos with starting bids at $139k (well, La Boheme and Esperanza). I was looking into La Boheme but felt that they priced it as if North Park had already undergone the transformation that Hillcrest had gone through. Also, the high HOA fees for the amenities wasn't justified.

Wonder how this affects current La Boheme owners, and also DR Horton, who still has the property Atlas going for high $300-500s. If you look at DR Horton's site, La Boheme is gone.

So, is this auction a good deal?

Submitted by PadreBrian on September 4, 2007 - 1:47pm.

I knew that place would never sell those units for 400k+. Just retarded.

"Wonder how this affects current La Boheme owners"
It means they will have to foreclose to get out of housing which is only worth 50% of what their mortgage is.

The 2 beds i estimate are worth 250k, and the the 1 beds worth 200k...max.

Submitted by movielover on September 4, 2007 - 3:05pm.

I agree with your price assessment. I'm planning on checking out the condos for sale this weekend and see if there are a lot of people interested.

You'd figure that DR Horton would lower prices on the homes that they have now, but just another example of builders in denial.

Submitted by PadreBrian on September 4, 2007 - 3:13pm.

I might check them out too. Maybe another +50k depending on location.

I also suspect Downtown is going to see whole buildings do this with thier unsold stock.

Submitted by movielover on September 4, 2007 - 3:29pm.

Any way to know about these auctions? I just found out cuz I was in the neighborhood. Would be nice to know if other builders start auctioning properties in Downtown. If you see of any, please post it.

Submitted by Arraya on September 4, 2007 - 4:30pm.

I live right by the other DR Horton developement (Atlas). It looks to be just about complete. I have a feeling the fate of Atlas will be the same as La Boheme. I saw someone trying to pawn their pre-construction unit off on craigslist last month so they could get their deposit back.

On a side note. I rent in a new condo developement. My landlord was an investor and he owns 3 units of the 12 with a contigency that he will not sell for 5 years. We moved in back in November when it was first completed. Since then they have sold the 2 smaller units and thats it.

Today there were workers installing blinds and carpet in all of the units. I guess they decided to turn them into rentals according the the workers. I can't imagine how it feels for the 2 buyers who pay double what eveybody else does to live in the same place. I actually feel uncomfortable when I am in the elevator with them.

Submitted by recordsclerk on September 4, 2007 - 11:11pm.

There was a 1 bed 1 bath unit sold in July for $161K. This could be a bank repo that was returned to the banks for the amount owed. There was a 2 bed 2 bath unit sold in July for $221, it could also be a bank repo. There was a comment in the MLS about special qualifications needed for discount and to go to the Office on Federal Blvd or something. This may be a unit that was set aside for Low Income Family. Other then these two sales, most recent comps are 275-279K (March 2007) for 1 bed, and 360-393K(March 2007) for 2 bed. It would be very interesting if these are sold near starting bid price, that would be 50% off from height of market. This information was given to me over the phone from my broker uncle.

Submitted by barnaby33 on September 5, 2007 - 8:58pm.

Atlas is only half done. What you see is the first of the two buildings. I now work across the street from it and went into the sales office to take a break.

Josh

Submitted by jeff_sd on September 9, 2007 - 5:03am.

Is it worth to buy?

i live near by in a rented 1 bedroom apartment and pay 800$ p/m. got free management and maintenance, and free water, cold and hot.
let assume i have 170K$ to buy 1 bedroom. comparing with my current pay, the costs per month will be:
330 HOA
100 insurance
170 property tax
20 water and heating
100 maintenance
750 loss of interest for the 170K$
-----
1450 total~ cost
i sow some apartments in the house, crowded, some on the street, no real privacy.

Submitted by Arty on September 9, 2007 - 12:17pm.

I will offer them 1 dollar above starting bid! :) Okay okay maybe a thousand dollars above starting! I drove by last nite, yea there are alot of people just across the street.

Personally I will only count 330 HOA + 170 PT + 100 maintenace + 750 loss of interest. You have to pay insureance (yes, please get a renter insurance), water, and heating anyway. However, you do get a tax break if it is a primary residience which could lower your income tax significantly.

Submitted by Mr_Brightside on September 9, 2007 - 12:26pm.

I dropped by La Boheme today and made some comments over at the SDLookup.com forums. The short summary of my conclusion is that the "auction" is more sales gimmick than a distress sale auction.

I think in order to get a true distress sale the developer/investor would need to be insolvent which DH Horton is not.

http://www.sdlookup.com/Forums/General/t...

Submitted by Raybyrnes on September 10, 2007 - 9:09pm.

"There was a 1 bed 1 bath unit sold in July for $161K. This could be a bank repo that was returned to the banks for the amount owed. There was a 2 bed 2 bath unit sold in July for $221, it could also be a bank repo"

I beleive these 2 sales are reflective of the afordable housing components that the developer had to make available.

Submitted by recordsclerk on September 11, 2007 - 11:22am.

I think you are right, because in the MLS there was an income requirement for these prices.
I'm interested in the auction because this is the first builder auction to the public and in the adds there is no mention of not accepting bids that do not meet their requirements. In previous auctions in San Diego, units/houses were sold by individual banks, there was also a minimun amount these banks would accept. There was a video in a thread earlier about condos in Florida that sold for 50% below what others had paid. This auction may end up like the one in Florida, but I would suspect that the builder will not accept anything near starting bid. I have pre-registered and have plans on bidding on a 2bed 2bath but do not anticipate having a winning bid.

Submitted by movielover on September 11, 2007 - 5:30pm.

I think if you can get a 1br for under $200k, you're in good shape. With regards to privacy, condo living doesn't really provide much privacy anyway. In fact, even the new tract home McMansions don't provide much privacy either.

The turnoff with the property is the high HOA. The local Fox nightly news did a story on this, and it looks like we will probably be seeing more auctions as sale tactics from developers in the future months. The news report said that they do have a minimum and won't go below that.

Submitted by patientlywaiting on September 11, 2007 - 5:40pm.

The undisclosed reserve shows that this auction is a gimmick. Buyers should stay away.

$200k for a 1bd is still overpriced. $100k is more like it.

Submitted by SD Realtor on September 12, 2007 - 12:33am.

Interesting that this is not marketted on the ushomeauction site that redc usually uses. This is on the redchomeauction.com website. The usual rules apply including the reserve pricing that patientlywaiting brought up. I would imagine the 5% broker fee to the winning bid applies as well.

It will be interesting to see how this one does.

Realtor

Submitted by PadreBrian on September 12, 2007 - 9:57am.

I think it will bring in high prices. I was there last weekend, and one of the sales guys said they were getting 50-60 people a day viewing the units. Yep, the 5% broker fee is still there. BUT, if you bring your agent to help he/she gets 2% of that.

Submitted by betting on fall on September 12, 2007 - 10:41am.

I do expect it will a success for the developer. The winning bids will be 5-10% less than last sale price and the new buyers will think they got a great deal.
Tons of attention and press coverage for this- just like that first big house auction down at the convention center.

Just wait until the third, fourth, . . . tenth. . . buildings get auctioned. Already the second auction at the convention center got lots less attention than the first.

When you can hear crickets chirping after the call for opening bids, then you have a chance to actually get a good deal at one of these.

Submitted by sd gal on September 14, 2007 - 5:50pm.

I went to see the sales office at La Boheme and took a tour to see 4 models.

One with loft was really nice. I think lay out's are unique and I wouldn't mind living in this building.... but... this is North Park. Silliest part of North Park with a lot of homeless people and nasty commercial buildings.
Once I was outside of La Boheme, reality kicked in and I decided not to bit on this...

Sales person said all 220 units are sold out except for 35 units that is going for auction. Not bad for today's market after all.

Submitted by HereWeGo on September 14, 2007 - 5:58pm.

The "previously valued" numbers are just nutty. 400K for a 921 sq. foot 1 bedroom condo in that location? No thank you.

Submitted by barnaby33 on September 15, 2007 - 10:31am.

Some people value Northparks diversity and centralized location and have been willing to pony up accordingly. I'm not sure who those people are, or how close they need to be to their crack dealer, but they do exist.

I looked at La Boheme a year and a half ago out of curiosity. They were still constructing the building so I didn't see any of the insides. The outside spoke volumes. Its located in a part of Northpark that might as well be in City Heights, its that diverse.

Anyone who pays more than rental value for something like that, even though its new construction is deluding themselves. Nortpark isn't coming up in the world, in fact its re-ghetto-ing(is that a word) as we speak. Poor people aren't going to go away in a down cycle, they are just going to move to Northpark!

Josh

Submitted by podpoet on September 15, 2007 - 4:24pm.

Scary auction? Well the auction maybe is a little scary but a quick Google search shows that auctions are taking place in many parts of the country right now, at condo complexes modest to top-notch. My friend has a top floor 1-bedroom w/loft at La Boheme that he bought for $370,000 pre-construction. He had it appraised last week to get a re-fi and it came in at $457,000. He said some top-floor 2-bedrooms there are being appraised at close to $600,000. So I think the people who bought there are still doing ok in the overall scheme of things. It will be insteresting to see how high the bids go for the remaining units. Could be some people pay as much or more via bidding than the original owners paid for their places. I also live in North Park and find it has a funky urban vibe unlike any other neighborhood in the city. Not perfect, but always fun and interesting. New farmer's market, new restaurants and stores opening monthly, summer concerts, monthly Ray at Night art walk, restored theater, cool coffee shops up the wazoo. My friends in Hillcrest and downtown are souring on those locales, calling them 'boring.' They hang out with me with me in North Park when they want to see an edgier, hipper part of the city. I guess it boils down to tastes, but those who love North Park are happy with that staying a secret.

Submitted by Arty on September 15, 2007 - 4:42pm.

He had it appraised last week to get a re-fi and it came in at $457,000.

I would like to find out who the appraiser is...

Submitted by sd gal on September 15, 2007 - 7:00pm.

One bedroom with loft is starting at $169k at the auction. It won't go more than 200k-250k in my opinion.

Appraisal is wrong....

Submitted by Arraya on September 15, 2007 - 9:58pm.

Could be some people pay as much or more via bidding than the original owners paid for their places

That's ridiculous... 92104 attached homes are dropping pretty dramatically. Lots of 03 prices popping up. La Boheme is not immune.

Submitted by barnaby33 on September 15, 2007 - 11:07pm.

No no guys, its funkier and edgier here, really. Having your car stolen and lots of petty crime is what makes it so. Having your friends from the more white washed parts of town want to hang out there makes it even more so, honest. Funny how I've lived in NP for 2.5 years and never though funky or edgy once. Then again, I just don't get it. Of course I don't get 600k for any condo in 92104; even were it on morley field. Then again, I just don't get it.

Josh

Submitted by podpoet on September 15, 2007 - 11:48pm.

Appraisal was Chase mortgage arm, according to my friend. Granted, his unit is a corner unit with unobstructed views that may carry a premium. The ones being auctioned on the top floor are interior units with views of....other units, explaining their lower value. Go to zillow.com and type in any La Boheme address, and you'll see appraised values closer to what my friend got for his.

Submitted by podpoet on September 16, 2007 - 12:05am.

I guess if you're just looking to flip your condo fast and get rich you're out of luck at La Boheme as anywhere else. But if you stick with your property for a few years, maybe less, your future will likely be bright, since the weather will always make San Diego desirable and North Park is getting lots of new investment and development, regardless of what others say. It's the nature of a downturn in the market. Use your home for what it was meant to be, a home, and it will be a cash source for you in due time. That's advice I gave to my friend at La Boheme, and he likes his views and the neighborhood so much that he sees himself there for even longer than that timeframe.

Submitted by newbie on September 16, 2007 - 12:25pm.

Hey sd gal and you others badmouthing North Park, take it easy! I live here near La Boheme and this neighborhood is tight! Those of us who dig the area know the real side of North Park, like http://www.northparkscene.com/

One look there and you begin to realize that this neighborhood is still up and coming. I really can't think of too many other parts of the city right now with this level of new shops and restaurants coming in. That's why La Boheme is flooded with people looking to get in via the auction. Yeah we got our problems, but what neighborhood in the central SD area doesn't? If you can get shot at Extraordinary Deserts in Banker's Hill or electrocuted at a bust stop in the gaslamp or attacked by thugs in Hillcrest, then what one typically runs across in North park isn't all that bad.

Submitted by patientlywaiting on September 16, 2007 - 12:46pm.

I think that the small shops in North Park, Hillcrest, Downtown, etc. will close during the recession. Many of those small business opened thanks to home equity extraction.

Who would pay $10 for a candle or such useless junk? Who would pay $5.00 for a quart of milk when you can get 2 gallons for $5.00 at Costco.

If we want a more densely populated areas, we need mass transit linking apartment dwellers to multi-story shopping centers like they do in other countries. Small affordable luxury, street level, stores won't last when the home equity ATM dries up. Those type stores are fine in some high end neighborhoods or tourist areas, but they don't make economic sense is most areas.

I know of two people who took home loans to start businesses. They aren't making enough to pay themselves, the rent, and service the loans. They will eventually have to give up.

Submitted by HereWeGo on September 16, 2007 - 12:54pm.

I drove around the La Boheme neighborhood today. There is a great deal of convenience to the area, no doubt. I counted at least three pawn shops within half a block of La Boheme, and seemingly a half dozen laundromats. Check cashing also seems to be a thriving business in the locale.

Half of the local stores sported stylish bars in the windows and on the doors. Within one mile of the condos, one could easily find the kind of building dilapidation that speaks to the liely future real estate values of the area.

The transformation that occurs at the Park St underpass is truly astounding. Hillcrest is very well maintained, very clean, I could see owning a place in that area. The difference between the east and west side of that bridge is truly remarkable.

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