Villa Rosa open

NEW -> Contingent Buyer Assistance Program
My spouse and I stopped by yesterday (Saturday) morning around 11am. The sales lady said that Villa Rosa will probably open its next phase in two sections. More specifically, they will release 5 homes first, then the last 7 in that same phase will be released later (I'm assuming after the first 5 homes are sold). She also said although she doesn't know the pricing of the new release coming up in Jan. 12, she does not expect it to be that much lower than the current phase. (I have to assume that she already knows what the prices are of the new phase and so is speaking from knowledge.) I also asked what other projects Lennar has coming up in the pipeline (other than the cpw), and she said that they will be working on the homes outlining the Great Park in an year to year and a half.
 
That is totally lame. A release of "5" houses? If Lennar doesn't have enough confidence in the market to release even 12 homes at once, I don't know how they can possibly be bullish on the market. Actions speak so much louder than words... the whole thing reaks of an expectation that the later phases will be even less... and that they want to insulate as many sales at higher prices as possible... to avoid any "reduction-price-matching" on homes that have not closed. Totally Lame.



Of course, I'm a little chagrin because I've been interested in these homes... but need them to be a little bit cheaper...(5-10%)
 
GrewUpinIrvine,



just for your information, ever since mid early to mid 2006, many builders have been releasing homes in smaller quantities. They breakup one phase and call them phase A, and B, ie. phase 5a, 5b. Five homes / release has been very typical. Smaller releases give builder less inventories on the book, and less required working capital. Also create the consumer perception of better demand ( reflected in less inventory). I don't think you should be alarmed by that in any way. Focus on price. As far as I know, Villas Rose has been releasing 5 to 6 homes a time during the last six releases.



One of the plan threes just sold not too long ago was under $1.1 million. Also, at least some of the releases in the previous phases (on winding way), have a large backyard - around 30 ft. You just don't get that in Lantana of VOC (15 feet to 25 feet, with mostly under 20 ft). Also, Lennar's home includes a lot of options - is. beverage cooler, upgraded granite ( not just two nasty color), upgraded appliances, etc. That being said, even with all the upgrades and larger yards, Villa Rose is still (and will always) more expensive than Lantana of VOC.



I like their plan 3 the most. Plan 1 is bad design.
 
For everyone's information: It appears that Lennar has "pushed back" the release of the next phase another week or so... and it is expected that the prices will remain much the same.
 
I've seen several comments that $250/sq. foot is a reasonable cost for a home in Irvine. I've even seen some posts suggesting a lower value. Wow. Presently I am "obsessing" over one of the villa rosa homes... It appears that these homes sold for 390ish/sq. foot in the initial phases (at the height of the bubble) but that they are currently running at $340ish/sq. foot.



My questions are simple:



1. What does IHB think would be a "realistic" cost per sq. foot of these homes? Given (a) availability of buyers/credit and (b) builder/seller flexibility.

2. What time line would IHB place on that "realistic cost?" Given that about 3 phases remain and that I'd expect to deal with the builder, and not a "short sale."



Thanks in advance!
 
<p>In a perfect world, maybe price might be $250/sq. ft. But I think there will be individuals who place value in not the square footage but rather into such things as: schools, safety, short commute, etc.</p>

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<em>1. What does IHB think would be a "realistic" cost per sq. foot of these homes? Given (a) availability of buyers/credit and (b) builder/seller flexibility.</em>





The builders have certainly not capitulated to the realities of the market. That is why their sales are so dismal. If they continue their pattern, they will slowly reduce prices and have anemic sales volumes until they go belly up.





<em>2. What time line would IHB place on that "realistic cost?" Given that about 3 phases remain and that I'd expect to deal with the builder, and not a "short sale."</em>





This depends entirely upon when the builders give up holding the line on prices and start dropping to reach the market. They are not behaving as they did in the early 90s when they cut prices to move inventory. They haven't laid off staff yet like they did in the early 90s either. It is a business plan which will lead them to bankruptcy. At some point when the reality of the housing market becomes apparent, the builders will start having fire sales to generate some decent sales numbers. I would think this would happen this year, but maybe not.
 
IR - Thanks for the response! Do you mean to suggest that a "realistic price" will be a function of volume/days on market? I've been trying to gauge just how much "languishing" exists in certain SFR developments. Take Lantara/Alexandria/Westborne in Voc... way over-priced earlier... followed by a decent price reduction by Lennar, followed by "sold out." (and at prices well above IHB standards) How does that "boil-out?" Did Lennar find the right pricing? Did they offer incentives others did not? Is there an endless supply of FBs'? I'm not sure... I look at William-Lyons and other builders in the same development, and they are all still trying to sell inventory. I don't know enough about the home builder industry to explain it. I realize that Voc isn't Woodbury, or Portola... but there have to be certain common denominators... especially dealing with new SFR's in the same city.



So I ask the question of what is a realistic price target for price/sq. foot on a new SFR in Irvine... realizing that (1) if I want to live in Woodbury and (2) if I want to buy an SFR, then I'll (3) have to keep in mind the remaining number of options contracts (new SFR's yet to be built) within Woodbury... to arrive at a realistic nexus of price and availability. Of course, this assumes that I must purchase new...
 
In Woodbury (or other Irvine Company communities), I don't believe builder has the margin to drop price without getting a land discount from Irvine company. IR is right on most communities where builder already purchased the land. VOC is a perfect example.



There has been many discussions around irvine company's ability to maintain price in Irvine. We will just have to wait and see when and if Irvine company is willing to sell their land at a large discount. My bet is that Irvine company won't cut their land price by too much and too quickly, and therefore you won't see $250 sq ft on a single family new home in Irvine Company's community anytime soon.
 
<em>"We will just have to wait and see when and if Irvine company is willing to sell their land at a large discount."</em>





This is the key question. The Irvine Company is clearly desperate to keep prices high because of the multiplier effect on their land value. Ultimately, sales volume will fall to zero as the market is imploding. They may or may not feel pressure to generate revenue from this land. They have plenty of cashflow generating properties to keep them going. I suspect they will start to feel some major political pressures to deliver housing units. They are already in lawsuits over providing affordable housing, so lawsuits over the provision of housing in general won't be very far behind. Also, the concept of selling their land at a discount is rather misleading. It is only discounted from the artificially inflated peak values. If the bubble had never occurred, the Irvine Company would be selling units profitably at a different price point. Basically, they are the last holdouts to accept the reality of a housing bubble and where the market is really going. Personally, I think they are making a mistake by not selling at today's prices. It is better to sell units at today's still-inflated prices rather than stubbornly hold out for prices they will never get. By the time they accept reality, they will have missed the opportunity to sell to a number of knife catchers.
 
After receiving an e-mail, I discovered that Phase 5 of Lennar's Villa Rosa is finally being released this weekend... and to my overwhelming disappointment, at the same prices as the last phase. Moreover, there are no incentives... other than a paltry 6K for using their lender...I am so disappointed. For a public company that has drastically under performed in the last 2-3 years, I was hoping for a little more price movement...



Phase 5 Pricing:



Model 1 from 993K

Model 2 from 1.078 M

Model 3 from 1.115 M



In Phase 4 homes were comparably priced:



Model 1 from 998K

Model 2 from 1.082M

Model 3 from (I'm not exactly certain).



Phase 6 will not be released until July 2008. Leaving the Last "build-out" phase for sometime in 2009?
 
<p>GrewupinIrinve, According to my records, in Phase 4, lot 76, 78, 79 (all plan three) were released at the following price before any additional buyer upgrades: $1.11M, $1.10M, and $1.12, the homes are 3161 sq ft, and the lot sizes for these three lots are: 5425, 5220, 5153. The closing prices are likley to be a bit higher due to upgrades. This is about $350 /sq ft. </p>

<p>That seems to be the going rate right now for single family houses at woodbury. Once the ten homes are closed at Villa Rose, there would be around 30 comps within 6 months period all equal to right around $350+ before landscape, window treatment, etc. There is good chance comps will drop lower, but i have no idea when the houses in woodbury will drop $300 or $250, or maybe free. </p>
 
grewupinIrvine, I will put you on the "I pay you to live in my house" interest list! ^_-



I don't have the details. But This is what I know: During the initial phases, the plan 3 were released at $1.28 million before buyer upgrades. The villas rose houses are on: DustyRose Street - 10 homes, and Elicpes street. 10 homes facing the water basin, and Sanctuary - 5 homes (behind the homes on Dusty Rose). I know they discounted quite a bit for the homes on Sanctuary as it is a busy internal street. The homes on Dustry Rose sold out very fast as it is a private cul-de-sac street. You should drive around those streets, and write down the house number and floor plan. Then go to zillow, you will know the exact close prices. I believe the lowest price plan three on those mentioned streets were sold around $1.15 million before upgrades.
 
<p>My friends bought a plan 2 on Sanctuary. $1.24M, after upgrades, although everything except flooring was included in price, so they were at $1.2M or so before flooring. They closed in September 2006 I believe. There were no incentives outside of a small credit for using in-house lending. The in-house rates were very good though. I think they got a 30-year fixed jumbo @ 6.50% or maybe 6.75%. The loan has a 10-year pay option feature so it essentially re-amortizes at the 10-year mark to a 20-year fixed.</p>

<p>It's amazing that list prices have only dropped 10% since the peak. That's just $120K on a plan 2. The smaller place my friend's owned in West Irvine, on my street, has fallen around $150K since they moved. I can't believe it's possible that Lennar will be able to move those plan 2's for $1.1M... If they can, my friends have actually saved money by buying a larger home at near peak bubble pricing!</p>
 
I just noticed that Villa Rose just closed their first house in the phases on "winding way". I would be interested in finding out the final closing prices.
 
GUI - A realistic price is whatever you or another buyer is willing to pay. Period. There is not magical price per sq. ft. or anything else.



For me, the realistic price today is $300,000 because of my surity of what the next few years will bring in terms of future prices. But, for someone else a realistic price is ...
 
All that I can say is that Villa Rosa's inability to come down a little more, say 5-6%, was enough to make me decide against seriously considering a purchase at this time... although I do want to buy... and I really like both Woodbury and that model 2B.
 
Villa Rose sold 2 of the 5 releases today: 2 plan 2.. There are 1 plan 1 left, 1 plan 2 left and 1 plan three left. The plan three is priced at $1.15 without incentive. I asked them if they are willing to consider any offers. They told me prices are firm, and no "offers" will be considered at this time.
 
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