DR Horton Website Details
Press Release with details
To all those who already own in these neighborhoods, you have just been fucked! You might want to consider walking away, as you are now 50% underwater on your "investment".
Wednesday, February 13, 2008
Capitulation
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28 comments:
We visited the City in the Hills developement. We looked at the homes and they were pretty nice. Some going for as little as $77 per sq ft.as of yesterday there were 5 in line. we thought seriously about buying a 2800 sg ft home for 250k w/ appliances upgraded stuff. we loved it but didn't want to camp out in front of the sales office for that long. more importantly, this is just the beginning.
$77 per sf sounds like a pretty good deal. Not that it won't probably go lower, but still a good deal. Hell I bought a new tract house in Sacto. in 1987 for $62 a foot. And tract homes back then didn't have near the finishes and appliances most have today.
I think they could go lower, but $77 sf, is pretty dam cheap to me.
What about the people who purchased for $140 sf. THey are really screwed.
A large remote from the core planned community like CITH with empty lots, $140/sf buyers, $77/sf buyers and massive oversupply is not a viable neighborhood. The "140s" haven't lost 50% unless they put 100% down. At 10% down they've lost 500%. And they are early in their mortgages. They can look forward to paying tens of thousands again this year only to lose even more money plus those tens of thousands. This is a post bubble ghost town in a death spiral.
I remember many similiar situations in the early 90's where remote tracts were stopped cold and existing inventory dumped cheap. They sat dormant with no new construction for a few years during which time some of the original bagholders jingle-mailed, to be replaced with new owners buying cheap.
They all eventually geared back up with either single lots going to custom builders or bulk lots built out by tract builders.
This time will be a little different because of all the damn planners. They aren't going allow these places to renege on Mello-Roos or any of the other illegal/immoral tax increments they carry. This time is also different because we have an unprecedented supply overhang. Without the "vibrant community" with all the promised "features" what it will become is going to compete with properties twice as close with more land and lower costs.
I wonder what the impact will be on the other new home developments around town. Lennar, KB and SPF are still building.
When do they join the 50% off crowd? This is going to kill the resale market.
I was recently at the University Park site on Gosford and Ming, which is a Castle and Cooke developement. I asked the sales lady when the prices were going to drop and she was very adamant about how rare price decreases are for Castle and Cooke. I'm still waiting to see if her words will hold true.
Waiting -
That is total BS! They have dropped the prices on the homes in Windemere in Seven Oaks because they cant give them away.
I will keep my eye on the University Park development
Thanks! My wife really wants to buy there but it's still too expensive to sit well with me...especially since there's an HOA fee and no back yards....
Don't agree with the "ghost town" prediction - when finished, utility serviced lots eventually reach a market clearing price barely above raw land, they sell - Mello-Roos or not.
But about those so-called deals this thread is about - they suck!
The lowest are in the $92 per s.f. range, with many in the mid 100's per s.f.
They'll need to do better than that.
The price of a shiny new home has tremendous impact on the re-sale market. I bought a very nice 5 y.o. home in '95 which was competing with a glut of hugely-discounted tracts nearby. The result was that the existing home's only sold if they were priced generally equal on a $/sf basis with the tracts. That meant ALL the upgrades to the existing homes were of no value to the owner and "free" to the buyer: Swimming pools, landscaping, wood shutters, etc., etc.
Not only has that yet to happen, but it will be worse this time when it does.
Basic fact of life here people:
California has consistently grown by at least 1.8% per year since 1850 (AKA STATEHOOD). People are not going to stop moving to California. We're sitting at 36.5M people in the state at the moment. Thats ~650k additional this year.
Some of them will move to Bakersfield. Especially with the price of Oil being what it is.
The problem at this point we have excess supply. Over 30,000 houses were built in last 5 years. Its going to take 3 years to eat through the excess supply.
From where I'm sitting it looks like the vast majority of empty lots are in the South & SW. If for no other reason than its easier to grade and extend utilities on flat land than hillsides. Is it going to get uglier? of course. Its not the apocalypse.
Everybody just take a breath and start swimming.
Also, I think the powers that be should at least consider the idea of some kind of a lid on permits (with a growth factor) for new homes. If for no other reason to minimize the possibility in the future of the pain we're all going to experience shortly.
Wow, Castle and Cooke's developments are immune to price reductions? Amazing. Waiting to Buy needs to ask that Castle and Cooke sales lady to explain the recent sale of their property at 910 Amber Park. It was listed at $400K when it went sale pending but closed at sales price of
$300K,which is about $92 a foot. They took an offer of $100k less than asking?!
Crazy, but public record shows Castle and Cooke as owners...maybe someone can explain?
"Crazy, but public record shows Castle and Cooke as owners...maybe someone can explain?"
LOL Gosh, sales people would actually lie to a customer? Who woulda thought!
Thanks queen! I'll use that as ammo if we actually do put a bid in on a house there. I think they'll lower their prices and when they do, I'll low ball low ball low ball for extra savings!
I live in the University Park area, and dropped in about 3 months ago to check out the units. The day I was there, there were 1 or 2 other lookie-loos who were just as aware of the housing bubble and the implications.
When asked by the sales people, I said I was on the side-lines, waiting until the market stabilized post-credit crunch. I didn't even say things like "waiting for prices to drop", and didn't really want to get into it, as I have no doubt it'll take MUCH longer for conditions to stabilize to the point where I'd consider buying.
Apparently the sales person overlooked the subtlety of my response, and took me for a yokel who just fell off the turnip truck: she offered some silly platitude about how prices will skyrocket once the market log-jam thaws.... Yeah, OK, whatever.
I guess you could make the argument that it happened before, so it COULD happen again. Unlikely, though, as enough of the big banks have been burned here that it's unlikely they'd be foolish enough to try to re-do it (at least, not for another decade; like all housing bubbles, people forget the lessons of the LAST bubble!)
Basic fact of life here people:
California has consistently grown by at least 1.8% per year since 1850 (AKA STATEHOOD). People are not going to stop moving to California. We're sitting at 36.5M people in the state at the moment. Thats ~650k additional this year.
Wow, we've got a live one here, folks. Does this guy work in REIC, as it's all the classic spiels spewing forth (a reiteration of the classic "but everyone wants to live here!" gobbledygook. Yeah, that flies somewhat if you're living in a place like Malibu or Newport Beach, but Bakersfield? Come on!)
Hankmeister, perhaps you've missed the FACT that California has experienced a net OUTFLOW of people over the past few years? We turned that corner a few years ago, as many Californians left the state to "cash out" on their housing wealth to buy a place elsewhere (where houses are more affordable).
More people LEFT CA last year than entered. Fact. Sadly, the people who ENTERED to buy are now holding the bag with an overpriced asset that is virtually GUARANTEED to depreciate. Meanwhile, the ex-Californians who left generally are enjoying their windfall profits from the sale of their house, but aren't spending it in California, but places like Utah, Oregon, Tennessee, Texas, etc. That's a Double-whammy for CA, with the PROFITS from FAKE EQUITY being exported, and HOUSING DEBT being imported. Just what CA needs: more 'bagholders' who are broke.
The whole "people want to live here" argument as justification for the pricing bubble is absolute nonsense, and can easily be shown as such by various (non-biased, non-REIC) indicators.
Not sure where you've been all this time, but there's absolutely no question of what caused the housing bubble: in retrospect, we now FULLY UNDERSTAND what was driving prices during the bubble. It was EZ availability of mortgages, i.e. loose lending standards. Usher more potential buyers into a market, and prices rise. Duh.
Trust and believe: it wasn't a "fundamental housing shortage", etc, it was simply a result of lenders who lent $ to anyone with a pulse, i.e. specuvestors.
I know employees making $10/hour who got loans on $500k homes, and some who bought 2nd or 4rd homes as investments using the leverage of their primary residence. Everyone wanted to be the next Donald Trump, so they outbid each other. Apparently alot of people watched those late-night infomercials on buying with no money down, and went for it!
So what happens to prices when EVERYONE buys 2 of the item? Perhaps prices go UP? Classic 'supply and demand' theory in action.
Wall Street didn't care, as they took all these "Hail Mary" mortgages and minced them into itty-bitty pieces to pass off to unsuspecting investors overseas. It wasn't like it was THEIR money they were lending, as greedy investor #1 was hooked up to greedy investor #2, with a commission paid to the broker. And the perfect ponzi scheme was born.
Now people are learning that, despite NAR claims to the contrary, house values not only go DOWN, but they can drop in a (relative) hurry!
Save the sales pitches and platitudes for those sheeple who don't have a clue! A housing site like this is not going to be read by people foolish enough to fall for crapola sales pitches such as yours...
They can look forward to paying tens of thousands again this year only to lose even more money plus those tens of thousands. This is a post bubble ghost town in a death spiral.
Yup, these people are zombies, the walking dead, asking themselves exactly WHY should I pay more for the same house as the person down the street did? Why am I sacrificing my financial future, paying for a way-overpriced asset that is losing value?
Nowadays, many lenders are claiming to be shocked about how easily people will just walk away from the home rather than stick it out. I can't say I blame the "buyers", as the lenders allowed them to get into the house with no "skin in the game", i.e. little to no down payment.
Lenders are learning the hard way that it's an extremely bad idea to write mortgages for people who don't have any reason NOT to just walk away when the times are rough.... Maybe those down payments served a purpose, after all (and lenders profess surprise to learn why DPs were always required in the past!).
Did anybody go observe the DR Horton sale?
No, but the Bakersfield Californian had a report (penned by Vanessa Gregory) on the front page of Saturday's (2/16/08) edition.
One potential buyer waited outside the sales office for 5 days; he said, "who knows? Maybe a year from now it'll be worth half of what I paid for it".
One "homeowner" who bought back in Summer 2006 is worried that HIS house is now worth less; he says the 2,600 SF home he bought for $371k is being offered for sale at $230k this (and next) weekend. He says a 2nd Bakersfield home he's tried to sell has fallen out of escrow twice, and now rents it to a relative (at a price which doesn't cover half of the mortgage payments). Welcome to the realm of accidental landlords!
He's quoted as saying, "If I was qualified, I'd probably be standing in line, but I'm already buried in two houses".
Wow, talk about drunk on the REIC Kool-Aid!
People were standing in line?
Jesus wept.
The builders are STILL able to create hype...unbelievable. Back in the days of '05 when builders were kings, not only did people camp out for days, but does anyone remember they actually had those additional "LOT PREMIUMS" (for thousands of dollars more) for some of their crappiest lots? The ones that backed up to the busy roads that bordered their subdivisions...and are the absolute worst and hardest to sell in a market like today's. I just can't believe people were so gullible and I hate the way those $#@%! builders took advantage. Hopefully some of those pigs are losing their own mansions they call home now too.
I went to the DRHorton sale in Temecula, the Bungalows.
It was rather humorous. They opened at 9:00 and we got there at 8:55, walked up to the office. There was a big sign that said "line forms here" with an arrow.
We were the only ones there, except for a couple standing over by the catering truck.
They only cut about 15% off of these though. High three's down to low three's.
One model was 398k marked down to about 328K. My son offered them 275K and they turned him down.
Anyway, the best part was the "rule" on there info page.
"One home to a customer, no exceptions"
Thanks for the information! Sounds like this thing was a BUST! I am waiting for the 90% off sale. LMAO!!!!
I'll check again on the 26th and let you know how many of the 20 available homes are left.
wow.. the last time I remember getting flamed was back in the USENET days.
Yes, you're correct that emigration out stripped immigration last year. This happens every time we get in to a recession. I was surprised you didn't mention Idaho. Most of their growth for the last 5 years has been expatriate Californians. Simple population figures are generally N=((births-deaths)+ (immigration-emigration)) and in California there are more children being born than deaths and the emigration/immigration combined.
The DOF data is HERE . Official growth last year was 1.17%
PLEASE don't read this as "NOW IS A GOOD TIME TO BUY". The next 5 years in this market are going to be hard times. Bakersfield is way, way, way over built.
City in the Hills will most likely follow a similar development pattern as Silver Creek. Silver Creek was large and remote from town when it was started ca 1988. Anyone else remember Frazier Rd?
Ah....Silver Creek. A Castle & Cooke Development. I live there now. Unfortunately, can't get my house sold. From what I have been told, Silver Creek was supposed to be a lovely area with little parks through-out - at least that is what they told the first buyers in the area. Instead, "they" decided to consolidate all of the little quaint parks into one large community park / rec area. Silver Creek Park is now a well known hang-out for gang bangers and criminals. Graffiti is common. A large section of Silver Creek was finished off with PUDs, which make nice rentals, but turned the area into a low rent district. City In The Hills will most likely turn out similar, since the houses are not selling and the builders are bleeding badly. All that land out there and they are jamming 2600 sf houses on 5000 sf lots. Good luck on the resale.
As for Castle and Crooke, they paid too much for the land and "cannot" drop their prices. We have been watching Village Green since it was a trailor sitting on a gravel road. The prices have come down on some of the houses that were built with $70,000 in upgrades already chosen for you (the arroganced of C&C) but they haven't sold a house there in over 8 months. They must be bleeding cash on their 9 housing tracts that are sitting idle. Yet they won't drop their prices to current market value. Don't expect them to anytime soon, either. They advertise a sale, but all they really do is change the amount off and raise the prices, so the total amount off is always the same. The sales people are told to not even accept offers below a certain amount. I know, we have tried.
Unfinished C&C tracts:
1) Brighton Village
2) Brighton Parks
3) Village Green
4) University Park
5) Liberty @ Silver Creek
6) Brighton Estates
7) Windermere
8) The Villas @ Seven Oaks
9) Seven Oaks (the big ones)
Not sure where all of their cash flow is coming from, but they have been treading water for a long time. On tracts like Village Green, with over 300 more lots to sell, who knows what they will end up doing...perhaps selling off to investors, like they did at Grand Island Place and Brighton Place...even though they required families to sign away the rights to rent or lease their own houses for the first 3 years at Brighton Place? Maybe they will pull a Del Web (Henderson, NV area) and allow Section 8 investors to come in and fill the empty lots. Now you have welfare families destroying a new 55 & older community. Because the builders really care so much about the homeowners. We will see what the future holds for C&C and the other developers, but it is hard to comprehend a multi-million dollar company like C&C to continue to bleed profusely for year after year without making some drastic business changes. And it won't be in favor of the home buyer.
Dear David Crisp,
You seem pretty good at scams! How do I dump (walk away) my $475,000.00 house that is now worth $280,000.00. You just seem like a good source on scams!
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