There are two reasons this tract has done so well:
1. Angela is a great salesperson.
2. The uncertainty with resales. At least here you can walk in and buy a house today.
I tried to help some people buy a house off the foreclosure list who got pretty frustrated. The defaulter wouldn’t commit to a short-sale, then filed for bankruptcy to delay his departure further – another deadbeat who has lived for free for more than a year.
The buyers had had enough, and were on the list to buy a new one at this tract. It wasn’t as suitable, but heck, at least you could buy it and move in!
JTR – to compare pricing on an equal basis, how much $$$ would it take to finish off the home (applicances/window coverings/upgrades)/yards(front/back) comparable to a recently built track home picked up in foreclosure?
Add $50k, 75K, 100k, more??
“The defaulter wouldn’t commit to a short-sale, then filed for bankruptcy to delay his departure further – another deadbeat who has lived for free for more than a year.”
Disgusting…
The housing market won’t “correct”until this kind of behavior is addressed.
I’m also curious to Clearfund’s question. I wonder if people commit to buying these things without realizing hidden costs.
I thought these ColRich homes were pretty cool inside. Those power lines, though. Yikes.
Finish off a new-built?
Depends who is in charge.
I think the appliance-upgrade package is included in most these days.
Wifey’s package:
Professional window coverings: $10,000 to $15,000 (many windows in new 2-story homes)
Professional closet organizers: $8,000
Custom lighting: $1,000 to $5,000
Landscaping/hardscape: $25,000
Pool: $50,000 min
Security system: $1,000
Total $95,000 to $100,000
If husband is in charge:
Windows: hang up old sheets
Closets: box of hangers, $5
Lighting: Nothing wrong with what’s here – they work, don’t they?
Landscaping: Home Depot run, $500 for some potted plants, a bag of grass seed, and a rolling sprinkler.
Water feature: Hose, maybe a slip-n-slide
Security system: baseball bat
Total cost: $505-$600
Results may vary.
Let’s speculate what is going to happen by looking at the trend or direction. I was there for the latest release of Andalusia and Monteluz. The attendance was one third of the April one. At least half of the release have no takers.
It will be interesting to see how Menzanita trail will fan out this Saturday. I sense Terramar isn’t doing well.
Trend, direction and underline current for NCC market are what we should focus on: New demand come from
1. new hire/new buyer
2. Investors for cashflow (doubtful for NCC)
3. Rich migration from other states
4. Leftover pending-up first-time-buyer demand (much less comparing to what was in early 2009)
5. Leftover pending-up move-up demand (wild card connects so-far-isolated-ncc to the so-far-more-impacted inland/other less desirable area)
In a nutshell, what has happened certainly important fact while careful analysis of factors of future impact is even more meaningful.
BTW: Flipper do not count as final demand since they only increase the activity without actually taking out inventory.
Not sure what your point is, other than the usual “it sure looks stormy ahead”.
If sellers are forced to lower their price to attract more buyers, we’ll all survive.
I really wish you would resist the use of the word “deadbeat”. Do you know anything about this person? They filed for bankruptcy: so maybe they lost their job, had a huge medical issue, etc. Not everyone in financial distress in this economy is someone who bought a house, hit the housing ATM to buy a yacht and then bailed.
If you don’t pay people you owe money to, you’re a deadbeat.
Those Terramar houses are ugly stucco boxes with few windows and I believe high Mello Roos That’s probably the biggest reason they’re struggling (assuming they’re struggling – I don’t know.)
LOL @ comment #4. Great post, Jim.
Comment #4: Good one Jim!
I would say that if you don’t make your best attempt to pay people you owe money then you’re a deadbeat. They could have done a short sale. Instead they filed for bankruptcy right before foreclosure so that they could live rent free as long as possible.
haha @ #4
I wonder how these are doing? I drive by them every day and it looks like construction is going full steam:
http://www.lacostagreens.com/builder_solterra.html
I think you drove by them once on a video and mentioned the 3 story design being a negative
On the wifey side you forgot $500 for pillows and on the man`s side you omitted the small or old fridge for the beer thte wife doesn`t want in the kitchen fridge.
Re: Not sure what your point is, other than the usual “it sure looks stormy ahead”.
My point is not “it sure looks stormy ahead”. In stead, I would like to focus more on “going forward” for both positive or negative aspects. That’s also why your analysis on “shadow inventory” is so valuable and really great.
Also LOL at #4. My wife is going to be seeing this.
Another reason that they sold so well–The Models look AMAZING. Finally some modern finish out and decor, both interior and exterior. I went back at least two addition times with my camera. I do agree, however that with any California tract home it is at least $50K to get it move in read–I have seen folks spent closer to $250K.
I don’t know why, but I was actually thinking you were across the street at the smaller homes-although the build-out on this tract was BEAUTIFUL as well, just not as modern as the others across the street!
“…on the man`s side you omitted the small or old fridge for the beer thte wife doesn`t want in the kitchen fridge.”
swm | September 17th, 2010 at 11:57 am
————
So I’m not the only one who doesn’t like beer in the kitchen fridge? 😉
BTW, Jim, I like your style in #4. Never did understand the $100K yard (unless you’re adding a pool and a lot of decking). Rent the tiller from Home Depot, add some grass seed and fertilizer, and you’re in business! 🙂
speaking of “deadbeats” :
I have a doctor friend who owned 4 once premium rentals here in vegas (no I did not sell it to him). Between the 4 he was about 1 mill upside down.
Now his income is pretty massive over 500k a year. Based on this situation – what would you do?
1-short sale them? Nope they would come after him afterwards and it would probably not fly anyway once he showed his assets/income
2- Just deal with it and hold on? Well lets see in vegas those house may never get back to his initial buypoint in his lifetime .
3- Just let them go. this is what he did. His net worth increased 1 mill on the day the banks took the homes back(over a period of 9 months but just the same). He will end up paying 10 cents on the buck for a couple seconds owed but thats it.
so would you call him a deadbeat or a smart businessman? Sure it may have been a stupid decision to buy them in the first place but large corporations make bad investments all the time and cut their losses all the time. If he would of held on to these just for the sake of “doing the right thing” then he would be stupid himself. He did what the system dictated.
Agree, vegasandre.
This is exactly what needs to happen in order for us to create a stable foundation from which to build a sustainable economy going forward.
We need to repudiate the unsustainable debts that were amassed during the credit bubble, AND we need to let asset prices fall to pre-bubble levels if we’re ever going to see our way out of this mess.
Love Jim’s post #4. To his list I would add builder options (not sure with ColRich, with Pardee it would add about $100,000 for things like a balcony, wrought iron staircases, marble baths, and upgraded-i.e. beyond standard maple-cabinets) and flooring ($30-60,000). Pool more like $75-$100k with extras.
All told, I would add $250,000 to the cost of a brand new house to get it totally finished.
vegasandre-He’s a dead beat who’s also a smart business man. He’s clearly a poor credit risk, because he has a history of not paying off his loans.
Shadash, the quickest solution is for the government to come up with a degraded asset value/equation for the bank’s books that makes the defaulted house a negative on their books 6 mo after the home”owner” has defaulted. It takes two to tango on this. And it’s not like everyone else crying “disgusting” doesn’t willingly take the equally idiotic free cheese, like the mortgage tax credit . . .