They are breaking up the 679-unit condo into six pieces, some for sale, and some for rent.
“Initially, sales efforts will be focused on the homes in the South Tower and the 2-story townhomes. These homes will be known as CityVibe. The South-facing S plans, now referred to as Seascape, will also be a part of our initial sales program. The homes in the Center Tower will be referred to as Horizons and will be available for lease at this time. Depending upon market conditions, we anticipate commencing sales in the entire North Tower at a later date.”
By 2006, Lennar decided that the good times were nearing an end for the housing industry. That summer, Lennar began to cut home prices to boost sales and generate cash in preparation for a downturn. Lennar also looked for ways to jettison land.
Lennar was facing a potentially serious cash crunch, in part because it was on the hook to pay back as much as $1.7 billion in debt used to finance joint ventures. Calpers, which manages pensions for California’s state workers and public employees, was in the market for land. Lennar wanted to sell most of its stake in the Newhall Ranch.
In early 2007, Lennar and LNR agreed to sell 68% of the venture, called LandSource, to a Calpers investment vehicle for $970 million. At the same time, LandSource borrowed $1.5 billion, distributing cash to stakeholders. All told, Lennar and LNR each netted $707 million from the deal.
Sixteen months later, with the housing recession raging, LandSource sought bankruptcy protection, which wiped out Calpers’s majority stake, along with the remaining stakes of Lennar and LNR. Calpers has said it never anticipated the housing downturn would be so severe.
In LandSource’s bankruptcy reorganization, Lennar has proposed buying 15% of a new venture that will hold most of LandSource’s assets, including the 15,000 acres near Los Angeles, for $85 million. The rest of the venture would be owned by a group of LandSource’s largest creditors.
The deal would value the land at about 18% of its value when Calpers made its 2007 deal with Lennar and LNR. The new venture would have $100 million in cash and no borrowed money.
“When assets are under stress, it can create some tension with partners,” says Mr. Haddad. “Overall, I feel very good about how our ventures have performed.”
Who cares about all the hoopla about listings flying into escrow – ARE THEY CLOSING?
Here’s the graph of weekly sales of detached homes from La Jolla to Carlsbad – the most recent three years are in bold, with three previous years included with thin lines for flavor:
(click on image for slightly better clarity)
Sales tend to increase towards the end of every month because of pro-rations (the buyers’ responsiblity for interest and taxes go down as they approach the end of the month).
With the dip in interest rates back in March, you’d figure that the end-of-May sales this year would have been at least as good as 2008. But they aren’t. While sales perked up in June last year, this year the North County Coastal region is looking weak – only 30 closings reported so far for June 16-22, 2009, which would send the red line even lower.
Yes, there will be late reporters, but if we don’t see a surge in closings over the next couple of weeks between La Jolla and Carlsbad, we’ll start wondering if this spring/summer selling season is going to fizzle out.
The biggest concern? In the first half of June, 2005 there were 34 houses that closed in Rancho Santa Fe and La Jolla. This year? 13.
Currently there are 593 active detached listings in those two zip codes!
Existing homes sales rose by 2.4 percent in May, posting the first back-to-back gain in sales since September 2005. That’s the word this morning from the National Association of Realtors. The group says favorable affordability conditions have buyers bidding on reduced-price homes. The $8,000 tax credit being offered to first-time buyers is helping to spur activity. By the way, legislation is pending in Washington to raise the tax credit to $15,000. Existing sales in the West lagged the overall nation. Activity here actually declined 0.9 percent in May but the pace was 11.8 percent higher than a year ago. Prices in the West are down 30.6 percent in the past 12 months.
Another report out this morning from the National Foundation for Credit Counseling paints an amazingly negative picture of the housing market.
Almost one-third of people surveyed — 72 million people — do not think they will ever be able to afford to buy a home.
And, 42 percent of those who once purchased a home, but no longer own it, do not think they will ever be able to afford to buy another one.
“It appears that whether a person was directly affected or not, Americans’ attitudes toward homeownership have shifted,” said Gail Cunningham of NFCC. The program also found that 74 percent of those who have never purchased a home felt they could benefit from first-time homebuyer education.
How hot has the market been lately? For the well-priced inventory, sales have been tremendous.
But with the multitudes of offerees, and the way the list prices are being overbid, doesn’t there seem to be ample demand to soak up at least a few more foreclosures? The banks have to be seeing the upsurge in activity and be thinking about unloading more REOs, what if they all get bought up?
Here are some examples of ones we’ve seen this year:
I usually don’t get too negative about the chances of a house selling for crazy money, but as you’ll hear in this video, I thought the LP was ridiculous – the house looked just like it did in 1974. Yet it still sold 12% OVER list price: http://www.youtube.com/watch?v=1nrW3tqbAmM
Sure, these former owners added a pool, but this house was a wreck when they bought it in 2003. They had refinanced with a loan of $637,500 in June, 2007, so they might have dressed up the interior too, but no photos included. Must have been decent though, sold for 19% OVER list price.
This looks like the best buy so far, because they only paid 5% OVER list price. But the house was run-down, the lot probably wasn’t splittable, and it was on cesspool septic system, though it did have cedar closets.
Remember this one from last year? My client had picked this up at the trustee sale for an attractive price, and when he flipped it the same month, everyone called knife-catcher. But they didn’t get killed, in spite of a very small backyard and looking at a busy street.
Just cherry-picking you say? Those are older closings, what about today?
Oceanside is a good test case, but is it just the low end that’s hot? SFRs under $200,000 are understandably hot when rents are higher than payments. But will it rise up the price ladder?
We listed these two on Friday:
4773 Sequoia, Oceanside
3 br/2 ba 1,006sf
SP: $434,000 3/06
LP: $179,800 6/09
Offers started rolling in right away, and we’re up to 14 bids so far, with the highest OVER $220,000 net. While this price point is still attractive to investors (three all-cash offers), the owner-occupiers are willing to go much higher.
The original owner had the builder complete this floor plan as a two-bedroom, with a master retreat and a den – not the most marketable. It would seem that if there was going to be evidence of some hesitation in the marketplace, we might see it here. The location is by the back gate, buried amongst a bunch of inferior older tracts, and a long way from town – about 30 minutes to the I-5 freeway in the morning.
But four offers are in, with a couple close to $400,000.
Both of these were helped by Jon Mann’s production – he has two model matches to Pismo Bay that he listed for $379,900 each. One of those just closed for $390,000 VA, but it was the more traditional four bedroom set-up.
Mr. Mann is the guy buying 5-10 properties per month at the trustee sales. According to the MLS, he has 57 properties in escrow currently, with an average market time of 8 days – including the 1,400sf house on Eolus that he listed last week for $649,000, and may have picked up a leftover buyer from the one that just sold for $630,000 (above).
Everywhere you go, properties that are priced right are garnering multiple bidders. Even if the banks unleash a slew of foreclosures, there seems to be plenty of unsuccessful bidders that wouldn’t mind having more inventory.
How long will it last? If more REOs were being listed, and you saw them blowing off the market too, would it change anything for you?
By 2012 we may finally get back to blissful boredom. With any luck, three years should be long enough for the U.S. economy to recover and for the nation’s housing inventory to shrink to more normal levels. At that point, housing will return to its old ways, with prices governed not by national mood swings and global credit crises but by local issues ranging from zoning to immigration to job growth.
Prices? While they’re likely to keep falling a while longer under the weight of foreclosures, the market is definitely closer to the bottom than the top. “We expect prices to drop for another year and then stabilize before starting to rise with incomes,” says Standard & Poor’s Chief Economist David Wyss. Moody’s Economy.com predicts the S&P/Case-Shiller U.S. National Home Price Index, maintained by data specialist Fiserv, will fall about 16% this year before regaining ground.
While the year 2012 sounds sexy enough to sell some magazines, all of these forecasts sound safe and vague – if any of them end of being right, it’ll just be luck.
They also included the list of places where it would be ideal to start over, for those who are looking to leave – none of their picks were in California:
shoppingaround left such a great comment that we’ll call it a guest post:
So, the good news (for those looking to buy a “deal”) is that this law shouldn’t stop too many foreclosures if so many banks were given exemptions. The question is how well will the banks move this inventory out to market.
For a long time, I, too, was in the “there must be a huge shadow inventory” camp. I track a few areas (mostly Carlsbad, Encinitas and parts of Fallbrook & Bonsall) using (Jim’s recommended) “fidelityasap” site to see if distressed properties, which I know the homeowner didn’t sell, are scheduled for the courthouse sale. And if they are, I watch for when the bank takes possession. And if they do, I watch for their REO to come onto the market.
First observation…this process, starting with tracking distressed buyers unsuccessfully lowering their price, and ending with the bank finally listing the REO can be an incredibly long time.
Second: Once the clock starts on property A, somewhere you add in Property B, later C, etc. One day you see that “C” shows up in the REO listings before “A”. That gives you the immediate impression that A nd B are being held back as shadow inventory. But maybe bank C is just more aggressive, or efficient. Once you get to “H” or “Q” you are beginning to feel as if it’s a downright conspiracy!
Third: Having been watching potential REO properties since last October, I now believe the banks generally are not holding back property, per se. As of today, I can say that EVERY home I’ve been tracking (except some which were foreclosed mid-construction and may have structural issues) has eventually come onto the market or is still (re)scheduled for the courthouse steps. No, they do not come onto the market swiftly and not often at prices I’d hope for, but they all have appeared eventually (with noted exceptions above).
Fourth, I think the contrast of how the banks are handling mid-tier & up homes has been different; with the low-end, many times they were tossed onto the marketplace “as is,” as we’ve all seen in Jim’s videos. But they generally don’t seem to be doing that with more mid-range+ properties. They seem to be trying harder to get a better value out of these assets.
So, I’m beginning to believe, that as Jim implied in one of his previous posts, it could be just that “that one” we’re waiting for is the exception–maybe it needs too much done to it first, so they are working on it, etc.
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!