Las Ventanas by Taylor Morrison at Portola Springs

[usctrojancpa]

Dropped by to sign up another buyer over at Las Ventanas this afternoon and snapped a picture of the interactive site plan.  Looks like they have more than 50% of the phase 1-3 homes sold, including all of the homes backing up to the toll road.  The red/pink ones are sold, yellows are ones that have deposits but no contracts, and green ones are available. 

 

[uciguy]

I'm impressed with how quickly they have sold these lately, especially considering everybody here seems to be waiting for the choice lots on the far end.

 

[usctrojancpa]

I'm impressed with how quickly they have sold these lately, especially considering everybody here seems to be waiting for the choice lots on the far end.

Yeah, I didn't think they'd sell out all of the lots that back up to the toll road this quickly (about 2 months).  Just goes to show that not everyone is concerned about the toll road. 

 

[lcms2002]

I'm impressed with how quickly they have sold these lately, especially considering everybody here seems to be waiting for the choice lots on the far end.

Yeah, I didn't think they'd sell out all of the lots that back up to the toll road this quickly (about 2 months).  Just goes to show that not everyone is concerned about the toll road.

They show no concern about the noise right now, and then they will regret the decision they made after moving in. You may ask Coronado Plan 3 owner (next to Sand Canyon) for their opinions.

 

[waitin4ever]

Actually that is a very interesting comment. Yes I would like to hear about that from
coronado plan 3 owners. Infact last year we had a old thread going about WBE and sandcanyon
noise.

I'm impressed with how quickly they have sold these lately, especially considering everybody here seems to be waiting for the choice lots on the far end.

Yeah, I didn't think they'd sell out all of the lots that back up to the toll road this quickly (about 2 months).  Just goes to show that not everyone is concerned about the toll road.

They show no concern about the noise right now, and then they will regret the decision they made after moving in. You may ask Coronado Plan 3 owner (next to Sand Canyon) for their opinions.

 

[usctrojancpa]

I'm impressed with how quickly they have sold these lately, especially considering everybody here seems to be waiting for the choice lots on the far end.

Yeah, I didn't think they'd sell out all of the lots that back up to the toll road this quickly (about 2 months).  Just goes to show that not everyone is concerned about the toll road.

They show no concern about the noise right now, and then they will regret the decision they made after moving in. You may ask Coronado Plan 3 owner (next to Sand Canyon) for their opinions.

That's a personal choice on their part.  That being said, I would argue that living next to San Canyon would be worse than living near to the toll road.  San Canyon gets a lot more traffic, especially those huge big trucks heading back and forth to the landfill. 

 

[sgip]

It would be tough to live at either location. Additional development will make Sand Canyon an extremely busy road. Beach Boulevard or Jamboree Road kind of busy.


In 10 years - a mere blink of the eye relatively speaking - the toll road will be a freeway and traffic will double. When the Rancho Capistrano homes (South of Ladera) and the Lake Forest area homes are built out the number of cars daily will skyrocket.

 

[rickr]

I finally got info on Las Ventanas MR with Maturity Dates:

In case anyone else is interested.

District 86-1: $822  2019
District 09-01: $878 2059

Big One
District 04-20: $3045 2030

As more homes are built in PS would MR decrease since the there is a larger base of homes to spread the bond repayment?

 

[panda]

Trojan and IR2,

I am curious to know how much you guys think that the plan 2 would rent for at market rate. The carrying costs with 20% down appears to be right around $4000/month. My random guess is that Las Ventanas plan 2 would rent for around $3000/month. Am I somewhat correct?

Just wondering how far these homes are to rental parity at this moment.

Thanks.

 

[panda]

The two Sonomas 2700 sq/ft  4bed/3bath at 35 and 30 Cedar seems to have rented at $3950 and $4000, which is the same carrying cost of owning a 2000 sq/ft 4bed/3bath plan 2 las ventanas with 20% down.

 

[usctrojancpa]

Trojan and IR2,

I am curious to know how much you guys think that the plan 2 would rent for at market rate. The carrying costs with 20% down appears to be right around $4000/month. My random guess is that Las Ventanas plan 2 would rent for around $3000/month. Am I somewhat correct?

Just wondering how far these homes are to rental parity at this moment.

Thanks.

I'm getting a cost of about $3,900/mo all in pre-tax cost with 20% down.  My guest is that you can probably rent Plan 2 for around $3,000 to $3,200 depending upon upgrades, lot size, etc.

 

[panda]

Thanks Trojan. i was assuming on a purchase price of $700,000 including the upgrades for plan 2. I agree with your estimate that the rent should be right around $3000 - $3200 range. I am getting a rental parity value of $521,450 at $3200/rent, which is not going to happen when rates are at where they are now.

Let's say that the 30 year fixed gets up to 7% like it did in the 1990s next year. (make believe)

What is your best guess that plan 2 will sell for if rates for a 30 year is at 7%? Do you think we will ever have a time again where renting will equal the carrying cost in Woodbury, Stonegate, or Portola Springs?

 

[usctrojancpa]

Thanks Trojan. i was assuming on a purchase price of $700,000 including the upgrades for plan 2. I agree with your estimate that the rent should be right around $3000 - $3200 range. I am getting a rental parity value of $521,450 at $3200/rent, which is not going to happen when rates are at where they are now.

Let's say that the 30 year fixed gets up to 7% like it did in the 1990s next year. (make believe)

What is your best guess that plan 2 will sell for if rates for a 30 year is at 7%? Do you think we will ever have a time again where renting will equal the carrying cost in Woodbury, Stonegate, or Portola Springs?

It would take a serious economic downturn or something major mortgage lending tightening to bring Irvine price back to rental parity.  Currently we are at about a 15-25% premium to rental parity in Irvine but maybe that can come down to 5-15%?  I have no idea, it's difficult to predict where the market is going to go with home prices and interest rates.  My guess is that interest rates for a 30-year fixed mortgage are gonna stay within 4-6% for a while (at least until unemployment comes down and the economy really starts to recover).

 

[irvinehomeowner]

$521k for a brand new 2000sft 4/3 SFR with driveway? Even if near the tollroad... that's a close to impossible scenario.

Not even sure if IndieDev thinks it will get that low.

 

[usctrojancpa]

$521k for a brand new 2000sft 4/3 SFR with driveway? Even if near the tollroad... that's a close to impossible scenario.

Not even sure if IndieDev thinks it will get that low.

The closest thing to that would be a detached condos with no driveways on motorcourts that would be closer to $600k if they were 2,000sf.  I can't find a re-sale detached SFR that's 2,000sf with a downstairs bedroom and a driveway that was built after 1990 under $600,000....closest thing was West Irvine 1,900sf 4bed/3bath homes that closed around the mid $600s within the past two months.

 

[IndieDev]

$521k for a brand new 2000sft 4/3 SFR with driveway? Even if near the tollroad... that's a close to impossible scenario.

Not even sure if IndieDev thinks it will get that low.

Panda's premise is based upon a 7% interest rate. I don't think we will see 7% rates in 2011, we may not even see 6%. But supposing we did, you could easily see mid-500s 2,000sqft SFRs with driveway in Irvine.

The ironic part is, to really kick start a recovery, rates actually do need to rise. Keeping them artificially low is like pumping morphine into a person who just got their legs chopped off, and asking that person if it hurts. Sure, it doesn't hurt at that moment, but there isn't any real recovery. They need new legs, and part of creating those new legs involves higher rates.

 

[panda]

This is what foresee in the future.

1) We will see a reversal in interest rates that has been falling for 31 years. This is one of my arbritrage strategies for the million dollars I have borrowed from the bank averaging in the 4.3s 30 year fixed. When Newport beach bond king billionaire Bill Gross goes short treasuries... his timing may not be perfect but Panda knows it is coming very very soon.

2) Homeownership will be a previlege and more difficult to achieve in the years ahead where homeownership was taken for granted 5-6 years ago due to easy loose credit. Remember those days when a guy working at McDonald's can walk out with a $800k loan to buy a condo in Miami? Those days are long gone.

3) We will not follow the footsteps of Japan in terms of real estate for one simple reason. The FCBs will continue to invest in the United States in Las Vegas, LA, NY, Irvine, etc. I have a theory why there are more Koreans living up in Northwood Point & North Park and more Chinese living in Turtle Rock. At Korean customs, they will stop any Korean trying to leave the country with more than $10,000. Did you know that in China, a Chinese man is allowed to leave the country with $3 million dollars to invest in real estate in Irvine and the U.S. customs will welcome them with open arms. The Dollar is much weaker than the Japanese Yen and thus FCBers will find more value. Finally, how many FCBers do you know who says my dream is to move to Japan, buy distressed real estate, and send my kids to Universtiy of Tokyo. I know none... How many FBCers do you know who says my dream is to move to the United States buy property in LA, San Fran, or New York and send my kids to Harvard, Stanford, and MIT. I know many.

4) The leverage plays will soon come to an end and financing homes will be become more and more expensive. This month was probably the perfect sweet spot to buy with 20% down and leverage 80% from the bank. I agree that 7% will not happen this year, but will happen by 2015. The big Sharks like Awgee will be rewarded in times like this as he will not care how high the mortgage rates are as he will would put down 100% Gold for a Plan 2 Las Ventanas in the mid $500s.

5) Over valued Real Estate across the country that have a premium of 15% or more from rental parity will be continue to decline and under valued real estate that are below rental parity will see slight appreciation. What I am saying is that why every area fell together, we will see decoupling in real estate appreciation/depreciation in the west coast, the south, east coast, and the midwest. 

 

[irvinehomeowner]

But supposing we did, you could easily see mid-500s 2,000sqft SFRs with driveway in Irvine.

You forgot the "brand new" qualifier.

The driveway equates into additional land cost which at that price level, may not be possible considering current TIC greed--err--land premiums.

But... considering that is early 2000 pricing and most of the bears predict that's where Irvine will bottom out (if not lower), who knows.

 

[IndieDev]

You could buy a 2,100sqft house in Oakcreek back in 2000 for just under $400,000 (forget the model name). That's when prices were still nominally tied to fundamentals. Adjusted for inflation, in 2011, that's a $525,000 house.

So brand new, or used, seeing mid-500s SFR in the 2000sqft isn't out of the realm of possibility in a few years.

 

[villiagepeople]

In 10 years - the toll road will be a freeway...

Are you talking about the 261or the 133?  And do you mean literally or figuratively... I can never tell with some people on this board...