The mainstream media has really been loading up and blasting the negativity this week, since the housing stats came out. The people they interview get caught up in the hoopla too, and the more negative you are, the more you’ll see yourself on TV!
I went to a seminar yesterday, and it was happening there too. Local realtors were spewing negative statistics that were blatantly false when checked later on the MLS – and not even close to accurate. Question authority!
Readers TJ and the Bear and John both asked about the claim on zerohedge that no new homes sold in July over $750,000, for the second month in a row – and I think he’s referring to the USA.
There were 14 new homes closed in June, and 2 in July in San Diego County. But the new-home stats are based on when escrow is opened, so the claim may be that no buyers signed a contract last month. But how many new homes are being built that are priced over $750,000? I’ll check with Bridle Ridge today, and maybe Davidson in Carlsbad, but there aren’t many around here.
The claim was also that the high-end market is becoming ”non-existant”.
There were 469 detached listings on the MLS that were priced over $750,000 that opened escrow in June and July (251 and 218), and 334 of them have closed. So apparently buyers exist. Can the new-home builders compete with existing homes, and will they?
From bloomberg, who is supposed to have a story today on the San Diego downtown condo market. In the meantime, here’s a link to a short (2:47) interview with the CEO of Pulte Homes:
The former Barratt project called Nantucket in Leucadia that was foreclosed by Bank of America, has been resold. Not sure if that means it’s over, or just beginning, but here’s a video review:
Hat tip to Jakob for sending this in, from the WSJ:
Builder Standard Pacific Corp. disclosed this week that it entered into an arrangement that gives it the right to purchase 468 acres of raw land in northern San Diego county over the next two years, the latest indication that builders believe the California market is making a comeback.
The $150 million transaction, Standard Pacific’s biggest land deal since the market’s 2006 crash, is further evidence of the company`s strategy to bulk up on bargain priced land now as it prepares for the housing market to improve. In addition to its latest deal, Standard Pacific has committed to spend about $300 million for 4,600 lots so far this year.
The land Standard Pacific will buy currently contains active dairy farms, egg ranches and citrus groves. It plans as many as 737 homes, though it will also consider selling lots to other builders. Raw land is typically less expensive than finished lots, so while Standard Pacific has to pay for the infrastructure, it can make money selling homes or finished building lots.
“We decided to take the risk ourselves instead of sharing it with others,” said Ken Campbell, the Irvine, Calif.-based builder’s chief executive. During housing’s heyday, California was the most profitable market for many home builders in part because prices were higher than in most other regions. It not surprising that builders would be angling to get front row seat in that market, particularly in the San Diego area, where building lot supply is low.
These new tracts in northeast Carlsbad seem to have decent pricing, with 1,753sf homes starting in the high-$400,000s on the lower end, and 3,000+ square footers in the mid $600,000s.
But even with the tax credits, they have only sold half of the homes released in the last two months, which should have been the hottest new-home-sales market in the history of the world. You can see it in their eyes, and hear it in their voices – the sales people are getting nervous:
It looks like Bank of America foreclosed on approximately $6 million in loans on the package deal offered for sale in Leucadia. The same agents who sold Magno-Bressy are on this case too, and it seems very casual and soft-sold. Are there dozens of buyers waiting in the wings after they saw how Magno-Bressy turned out? Take a look:
Barratt is the owner of the lot that’s designated for the low-income house. The reason it’s just sitting there is because they are in bankruptcy court, which has to wrap up sooner or later. Bank of America doesn’t have anything to do with the lot being highlighted, but they are actively soliciting offers for Nantucket 2.
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