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More Avenue One Price Drops - UPDATE #1

Originally posted December 27, 2007

Address: 1124 Scholarship, Irvine, CA 92612
Plan: 1A 725 sq ft - 1/1
MLS: P609516 DOM: 46
Sale History: none
Current Price: $334,990

See our previous posts on Avenue One. This brand new home is for sale by the builder, K Hovnanian. The builder listed a similar property in October 2006 for $396,990 which translates to about a 15% drop in asking price in the past 14 months.

Here are the private remarks on the property:

BROKERS AND REALTORS, DOUBLE YOUR COMMISSION TO 6% ON SELECT UNITS. Contracts must be written by 12-31-07 and COE by 1-31-08. MOVE-IN-READY. $10,000 Deposit required. Agents must bring Buyers to the Sales Office and register them during their very first visit to Avenue One. Our Sales Office ( 2100 Scholarship ) is open Mo. 1p.m. - 5p.m. and Tue. - Sun. 9a.m. - 5p.m. Please call a Sales Consultant at 949-975-8545 and ask about our current specials , incentives and upcoming events.

The builder has priced this well below other units with the same plan. It's putting this seller (a RE Broker who has the highest asking price for this plan) in a tough spot:

Address: 1138 Scholarship, Irvine, CA 92612
Plan: 1A 725 sq ft - 1/1
MLS: P584759 DOM: 123
Sale History: About $409k on 8/2006?
Current Price: $420,000

These 725 sq ft units can bring in a rent of $1400-$1600/month. What's the unit worth to you?

UPDATE #1 - February 13, 2008

Recently, I noticed that several units in this complex were labeled as 'Sold' in MLS. What's interesting is the price listed in MLS as the Sold Price. These units were all sold by the builder:

• 1164 Scholarship - Plan 1B - 1/1 - 602 sq ft
  - Sold for $323,990 on 1/10/2008
• 1124 Scholarship - Plan 1A - 1/1 - 725 sq ft
  - Sold for $253,492 on 1/30/2008
• 1327 Scholarship - Plan 1A - 1/1 - 725 sq ft
  - Sold for $280,591 on 1/29/2008
• 1434 Scholarship - Plan 2AL - 2/2 - 1213 sq ft
  - Sold for $445,042 on 1/25/2008

And here's what is pending from the builder:

• 2138 Scholarship - Plan 2A - 2/2 - 1037 sq ft
  - $474,990
• 2434 Scholarship - Plan 2AL - 2/2 - 1213 sq ft
  - $556,990
• 1446 Scholarship - Plan 3AL - 2?/2 - 1538 sq ft
  - $674,990

The Sold prices are significantly lower than anything we've seen in this tract. I haven't been able to confirm this information with the Title info. If anyone can confirm, please post. As I've mentioned on other Avenue One posts, the builder is going to sell these units one way or another.

The 1124 Scholarship unit is the one that started the this post on Dec 27, 2007. If it can be rented for $1600/month, then it is at just under the 160 multiple.

WOT 2-16-2008

Hell in a Bucket