Portola Springs - Manzanita

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<strong>Village:</strong> <a target="_blank" href="http://www.irvineranch.com/villages/portolasprings/">Portola Springs</a>


<strong>Tract:</strong> <a href="http://www.richmondamerican.com/Shop+and+Buy/View+Community.htm?mr=Orange County&cm=1276&=ID=1276&Type=Community" target="_blank">Manzanita</a> (74 detached homes) in the City of Irvine


<strong>Builder:</strong> <a href="http://www.richmondamerican.com/" target="_blank">Richmond American</a>


<strong>Schools:</strong> Irvine School District (<a target="_blank" href="http://www.iusd.org">IUSD</a>): Westwood Basics, Sierra Vista Middle, Northwood High


<strong>Tax Rate:</strong> Property tax rate of approximately 1.8%.


<strong>HOA Dues:</strong> Master Association to be $175 to start and $150 at build out. Sub Association to be $138.


<strong>


Plans:</strong>


Residence 1 - 3-4bd/2.5-3ba - 2202 sq. ft.


Residence 2 - 3-5bd/2.5-4ba - 2533 sq. ft.


Residence 3 - 4-5bd/3.5-4ba - 2829 sq. ft.





<strong>PRICING


</strong><strong>


</strong>

<p><strong>Phase 1 (August or September 2006)</strong></p>

Residence 1 - $973,730


Residence 2 - $1,043,000


Residence 3 - $1,095,900


<strong>


Phase ? (Picked up 1/19/2007)


</strong>Residence 1 - $898,000


Residence 2 - $966,000


Residence 3 - $1,029,000


<strong>


Phase 3 (Picked up 4/28/2007 - September 2007 Move-in)</strong>


Residence 1 - $848,180


Residence 2 - $898,200


Residence 3 - $908,700





<strong>Phase ? (Picked up 7/7/2007)</strong>


Plan 1

Unit 6 - $801,480

Unit 21 - $812,950



Plan 2

Unit 8 - $839,600

Unit 20 - $812,950

Plan 3

Unit 5 - Sold

Unit 23 - 872,800

<u>Plan 3X (3d floor loft is standard)

Unit 7 - $893,550



<strong>Phase ? (Picked up 11/03/2007)</strong>

Plan 1

Unit 21 $754,900



Plan 2

Unit 8 $774,000

Unit 20 $804,900



Plan 3

Unit 5 $832,000



Plan 3X

Unit 7 $864,000



<strong>Picked up 1/29/2008</strong>

Just visited Manzanita yesterday and got the price sheet. No change in prices except for plan 3x (with 3rd floor loft) was listed for $879,900 (up from $864,000).



<strong>1/25/2009</strong>

Plan One - $700,341

Plan Two - $774,000

Plan Three - $830,341
 
<p>Phase 1 - probably from August or September 2006</p>

<p>Residence 1 - $973,730


Residence 2 - $1,043,000


Residence 3 - $1,095,900


</p>
 
Phase 3 (September Move-in)





Residence 1 - $848,180


Residence 2 - $898,200


Residence 3 - $908,700





Looks like prices have come down a little bit more. It was also interesting that the salesperson said they would listen to offers below asking price. This is the first time I received this response from any of the new home builders.
 
If the builder is outright saying that they are willing to listen to offers below the asking price, is it reasonable to conclude that at the corporate level, they have already developed a plan to lower prices across the board (yet again)... but that they don't want to play their cards... and would rather see what the home buyer is subjectively thinking he/she can get away with on the offer? Or, could this be another partial TIC concession - the builder can accept less on the offer, but CANNOT advertise how low they are really willing to go.
 
When did they roll out the latest round of price reductions?





If they've officially lowered asking prices, the Irvine Company must have blessed it, which means they probably permitted other Portola builders to lower their prices as well. Has anyone picked up a price sheet from Paloma, Los Colinas or Serra in the last few days?





It's also interesting that they are willing to negotiate lower than the current asking price--it must mean that the Irvine Company has sanctioned a reduction even lower than what they're asking now.
 
IIIrvine - I'm not sure how much lower they would consider, however, the salesperson did seem rather desperate. There was absolutely no one looking.





GavriloPrincip - I can only assume they rolled out the latest price reductions for the phase 3 release. Allegedly all the phase 1 and 2's were sold out. Maybe all the homebuilders are approved for price reductions on their next phases? It was also interesting that she was very reluctant to give me any specific incentives being offered, instead saying it can be negotiated based on which house was chosen. This is a departure from the traditional offer incentive but no budging on price strategy.
 
If model three has been reduced from 1.1 million to 910K in just over 5 months.... there must be something seriously wrong with the development... I mean, 190K reduction seems like serious money to me... I guess it also shows just how much "fat" is present in all of these developments.
 
<p>You asked about a price sheet from Las Colinas? Phase three is:</p>

<p>Today: Residence One $1,138,000 minus $45,000 in design center credits</p>

<p> Two $1,114,000 minus $45,000</p>

<p> Three $1,201,000 minus $50,000</p>

<p> Four $1,292,000 minus $55,000</p>

<p> </p>

<p>Is this less expensive than Phase 2 or 1?</p>

<p> </p>

<p> </p>
 
This is exactly the same pricing for Las Colinas that has been in place since January 23, but with the design center credits (and I believe they're also offering a 3% broker participation). The design center credit has increased slightly, IIRC; I think it was previously $45k for Plan 4. The lowest priced Plan 4 on the previous price sheets was lot 278, priced at $1,274,00. It must have sold, with the next-lowest priced Plan 4 being $1.292.
 
Dropped in yesterday. When I first saw these, I absolutely hated them. Given a fresh look (and without the crowd), I found myself liking them quite a bit. They are detached condos, and Richmond American expanded their profit by placing two homes on a single lot. They are partially zero lot line, where your yard abuts the wall of the neighbor's garage.





Here is pricing:





Plan 1


Unit 6 - $801,480


Unit 21 - $812,950





Plan 2


Unit 8 - $839,600


Unit 20 - $812,950





Plan 3


Unit 5 - Sold


Unit 23 - 872,800





Plan 3X (3d floor loft is standard)


Unit 7 - $893,550





Also, Portola Springs master ass'n is $175 / month (wow!) now and reduce to $150/month at build-out, and the Manzanita ass'n dues are $138/mo. Tax rate is approx. 1.8%.





Another interesting tidbit - TIC owns the lots and will not release the lots to the builder for phase release and construction until a certain number of each existing phase is sold. I was also told that although there were plans for certain units to go on certain lots, that is subject to change as the project goes along. I don't know if that is a builder decision or a TIC decision. Does anyone here know?
 
<p>EvalS asked:</p>

<p><em>"I was also told that although there were plans for certain units to go on certain lots, that is subject to change as the project goes along. I don't know if that is a builder decision or a TIC decision. Does anyone here know?"</em></p>

<p>I don't know for sure, but reputable scuttlebut has it that the some of the builders are contemplating bailing out of their later planned phases at PS. TIC wants to maintain certain pricing levels, and it means most of the sales have ground to a halt (at those prices). I doubt TIC would turn anyone away that could actually move units at the price points they demand. Currently, the market is getting in the way of those demands, though. The situaiton is unrealistic and TIC appears to abe ttempting to deny reality, thinking or hoping that an upswing is just around the next bend.</p>

<p>SCHB</p>
 
You are absolutley right about builders wanting to back out of PS! I worked for Richmond until earlier this year and the land costs for Manzanita are very high. Each lot cost 735,000 before building the actual home. Pardee is already jumping ship and Cal Pac wants to rezone and resize lots and sell them to KB. Taylor Woodrow wants to purchase Pardee's lots for more Las Colinas products. There is alot of builders begging for mercy and TIC is not going to budge....
 
Keith,





Good to know you used to work for a builder. There has been a lot of speculation around here regarding building costs per square foot for new construction. I think the guess was around $125 per sq ft. If you know, could you confirm or set us straight? Many thanks in advance.
 
<p>keitht925,</p>

<p>I had the same question as EvaL. In addtion, how can land cost $735K per lot? Does not make sense. Does part of land cost get recaptured at the backend?</p>

<p>Many thanks.</p>
 
I know it is hard to believe but, land cost is that high on the irvine ranch. The 735k price was for the (what is known as the 'take down') of the first phase at Manzanita. TIC is allowing builders a smaller price tag with a much slimmer profit margin than anticipated. Richmond is now probably paying 590k per lot with the market like this. Taylor Woodrow and Pardee have paid about the same for their lots in PS too. Down at Covenant Hills K hov and Pardee spent over 1 mill per cut lot for their products capistrano and encantada. In orange county, builders dont even make a ten percent profit it's actually unheard of. And yes after the lots are purchased, depending on the product types, some homes can cost up to 125 per square feet. Manzanita i believe is at about 85-90 per square foot.
 
Keith - Thanks so much. I know that many of us were interested in the basic costs of new homes.





As I look at Manzanita, it appears that builder cost currently is approx $547K for a Plan 3, but they are asking $872K, by my math, RA is pulling more than a 10% profit on each unit of Manzanita. Aside from costs for the sales agents, what am I missing?





Thanks in advance.





PS to IHB admins - since we're going a bit off topic on an area of general interest (Builder Costs for New Construction), should we create a new topic and copy/paste some of Keith's info into it?
 
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