Is this a sign of an unusual lag in demand (next step down?), or is this the new era of home sales?
These builders have two things going for them; their $-per-sf is cheaper than almost all of the nearby newer-tract-home resales, AND you can buy one today. Yet there are 11 homes available for sale.
What gives?
The HOA/Mello-Roos fees are around $300 per month, the houses seem close together (though Davidson claims that their average lot is 8,200sf), and there is no urgency when so many are sitting around. Only the people who have a deep desire to buy are stepping up.
Is this a normal market?
It might be, and could be the future for all sales – steady slow:
It didn’t take long – we have our first 8-figure guess-estimate!!!!
If the government does not improve and fix the nation’s loan modification process, more than 11 million consumers – representing 20% of all outstanding home mortgages in the U.S. – could lose their homes, according to a new report from Amherst Mortgage Securities.
Jim,
I was reading in the Times that JPMorgan is suspending all foreclosures. I don’t really get this…why would they do it? Government pressure?
What do you think about that?
I wonder who is taking the most losses on these constantly suspended loans that are getting no principal & interest payments from the ‘deadbeats’ lol? China maybe? A little hidden ‘trade war’ move? Seems like they are constantly coming up with new ways and excuses to give free rent and not foreclose, and just notched up some more China rules before Congress left for yet another vacation…I mean campaigns. Timing is suspicious. Free rent for Americans, thanks to China….hey…I want one. Food for thought with your rice and walmart stuff?
would be interesting to find out how much per lot the out-of-town builder purchased them for. as well as how much Davidson purchased the W.Lyon lots for in Del Sur. Is it possible to find out?
BofA suspending foreclosures too.
All the dirty banks have been cutting corners on documentation and in some cases committing fraud on the court.
This could get real interesting.
From CNN/Money, here’s the list of states where Bank of America is suspending foreclosures: Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, and Wisconsin.
One thing that gives is I don’t think LC Greens demands $850k+. I’m also not interested in paying for landscaping. My assumption is you have to pay in cash. Can you make that cost part of your mortgage?
JtR: your video mentioned John Laing in Del Sur and ocrenter mentioned W.Lyon. Which one is it? Is Davidson taking over Laing’s Sentinals? or are they taking over W. Lyon’s Pasado? or is there a totally different project they’ll be taking over in Del Sur?
You ask why they sold the lots???? They were screwed!
After 4+ years, no housing project that is 1/2 built is solvent…no project. I bet their proforma was to be 100% sold in 2 years at prices above $900k.
Thus, with lenders breathing down their backs, Taylor Woodrow/Morrison made a deal good enough to free it up, and move on down the road with a clean slate and a lower cost basis.
sorry Petra, my bad. I got W.Lyon and John Liang mixed up.
Jim mentioned W.Lyon took over at La Costa Greens just adjacent to Davidson.
As far as cost, looks like W.Lyon paid $280k per lot back in late 2009. total deal was $21 million for 74 lots. So if you got the lots for close to $300k, and you are selling 3000 sqft homes for around $700k, that doesn’t leave that much room for profit, right? unless you seriously lower your cost by cutting corners.
Doesn’t look from the tax roll that the sale to Taylor Morrison is final. But from the tax roll it looks like Davidson purchased the lots for just south of $300k back in late 2006.
So now it makes sense. Davidson is more of an upscale builder. I have to assume the Viridian homes are a lot better in construction quality than Lyon’s Mirasol down the street. So if Lyon is undercutting Davidson with homes at $700k, Davidson can’t continue to sell homes at $850-900k even if they are bigger and better built.
Chances are Davidson got a decent deal on the prior J.Liang lots that would allow him to continue to build higher end homes and still make a profit. Hence the land swap.