Hi,

I recently viewed the Harbor Lofts and liked them due to the its location as it serves as a reasonable compromise area for my girlfriend and I who work in completely opposite areas of southern california.

The loft representatives have indicated that they are not selling any units at the moment because the developer is re-assessing the pricing structure.  I believe that the 2brm/2bath units will be listed at approximately $320k ultimately.  I think this is still overpriced.  I’m looking at something more in the line with $230k - $250k.  I’ve done some research as to the already sold units (9 out of 129 units) and the lowest sales price I saw for a 2/2 was $330k.

So my question is whether anyone else here thinks that newly built units can/will dip to this price due to the mounting downward pressure on these builders.  Also, what are the chances the builder will sell below the actual cost of construction?

I’d appreciate any information, insight, comments you can provide.

jwlam - 23 June 2008 07:08 PM

Hi,

I recently viewed the Harbor Lofts and liked them due to the its location as it serves as a reasonable compromise area for my girlfriend and I who work in completely opposite areas of southern california.

The loft representatives have indicated that they are not selling any units at the moment because the developer is re-assessing the pricing structure.  I believe that the 2brm/2bath units will be listed at approximately $320k ultimately.  I think this is still overpriced.  I’m looking at something more in the line with $230k - $250k.  I’ve done some research as to the already sold units (9 out of 129 units) and the lowest sales price I saw for a 2/2 was $330k.

So my question is whether anyone else here thinks that newly built units can/will dip to this price due to the mounting downward pressure on these builders.  Also, what are the chances the builder will sell below the actual cost of construction?

I’d appreciate any information, insight, comments you can provide.

Harbor loft by Lees Homes is a podium structure offering retail at street level and buried parking behind the retail facade. The cost for the concrete podium is very expensive and the entire structure must be completed at one time and could not be done in phases as concrete is very unrelenting in allowing future structural integration without compromising structural integrity.

During the boom time the builder presold most of the units that is sitting on the top of the concrete podium structure so there is no carrying cost for the concrete podium.

It is the opposite now in the market place. Builders would not invest or borrow the money up front to build the podium structure with just a few units sold. The cost and the interest inccured by building podium structure is so costly that the builder will be paying for all the mortgage to the lender for the un-sold units.

It is all in the waiting game for you as the builder will need to meet the magic number of pre sold units inorder to starting construction of the podium structure.

Another scenario with the standing inventory the builder would convert the complex to leasing (fancy word or renting) like the built monstroucities at the Anaheim Triangle to cut the loss of bleeding.

bkshopr -

Maybe I’m not understanding. but the Harbor Lofts are totally complete, aside from the finishing inside each unit.  There are people living there already.  Of the 129 units completed, only 9 have been sold at this point.  The grand opening was in February 2008.

Does this change your analysis?  Thanks for your assistance.

bkshopr - 23 June 2008 07:29 PM

jwlam - 23 June 2008 07:08 PM

Hi,

I recently viewed the Harbor Lofts and liked them due to the its location as it serves as a reasonable compromise area for my girlfriend and I who work in completely opposite areas of southern california.

The loft representatives have indicated that they are not selling any units at the moment because the developer is re-assessing the pricing structure. I believe that the 2brm/2bath units will be listed at approximately $320k ultimately. I think this is still overpriced. I’m looking at something more in the line with $230k - $250k. I’ve done some research as to the already sold units (9 out of 129 units) and the lowest sales price I saw for a 2/2 was $330k.

So my question is whether anyone else here thinks that newly built units can/will dip to this price due to the mounting downward pressure on these builders. Also, what are the chances the builder will sell below the actual cost of construction?

I’d appreciate any information, insight, comments you can provide.

Harbor loft by Lees Homes is a podium structure offering retail at street level and buried parking behind the retail facade. The cost for the concrete podium is very expensive and the entire structure must be completed at one time and could not be done in phases as concrete is very unrelenting in allowing future structural integration without compromising structural integrity.

During the boom time the builder pre most of the units that is sitting on the top of the concrete podium structure so there is no carrying cost for the concrete podium.

It is the opposite now in the market place. Builders would not invest or borrow the money up front to build the podium structure with just a few units sold. The cost and the interest incurred by building podium structure is so costly that the builder will be paying for all the mortgage to the lender for the un-sold units.

It is all in the waiting game for you as the builder will need to meet the magic number of pre sold units inorder to starting construction of the podium structure.

Another scenario with the standing inventory the builder would convert the complex to leasing (fancy word or renting) like the built monstrosities at the Anaheim Triangle to cut the loss of bleeding.

Relationship always look good in the beginning but I would caution you to look ahead in the future regarding the financial obligation and responsibilities of owning the property together. I see this scenario a lot and vultures love out of relationship home sale because the emotion and time constraint never work in the sellers favor.

bkshopr - I agree with your position that purchasing with girlfriend may not the best decision.  However, I will be purchasing the property personally and she will not be on title.

jwlam - 23 June 2008 07:34 PM

bkshopr -

Maybe I’m not understanding. but the Harbor Lofts are totally complete, aside from the finishing inside each unit.  There are people living there already.  Of the 129 units completed, only 9 have been sold at this point.  The grand opening was in February 2008.

Does this change your analysis?  Thanks for your assistance.

There were a high number of exodus for buyers committed to the transactions of the first podium structure. There were sufficient promise at the beginning to warrant this project but having the bubble burst after the construction started was a detriment to the builder. Luckily the city who sold the property to Lee revised the land cost to compensate Lee Homes. City of Anaheim does not want to see an unfinished building because of bad press for their grand vision of revitalization.

Are you comfortable in making a purchase in a project when a majority of the buyers pulled out?

I think the buyers went somewhere else to buy a much more home for the same amount of money.

I was not impressed with the floor plans.

Personally, I like the units.  Why the previous purchasers backed out before the construction was likely due to the fact that they were going to buy them for $400k and lending would have fallen through anyway.  As I said before, I’d like to buy these somewhere in the low $200ks. Is this a easonable price to ask for a project like this or will these things drop to mid $100ks?

jwlam - 23 June 2008 08:11 PM

Personally, I like the units.  Why the previous purchasers backed out before the construction was likely due to the fact that they were going to buy them for $400k and lending would have fallen through anyway.  As I said before, I’d like to buy these somewhere in the low $200ks. Is this a easonable price to ask for a project like this or will these things drop to mid $100ks?

200’s is a good deal. You can still rent it out with positive cash flow. It will perform under GRM ratio. When you and your girlfriends decide to have children then you have to move. This unit will not be bad to keep since it is so cheap $$ to begin with.

For first time buyers everything looks good. I remembered when I bought my first home. I have seen too much and extremely critical.

Does the base price includes interior walls? Or are they still consider extras?

The only walls that are considered extras are the walls that seal off portions of the loft into separate individual rooms.  All other walls are included in the purchase price.

Are there any updates on this place, I know a few months ago they had some kind of firesale to “kick off” opening of the place even though they have been open for awhile. I drive by this place everyday on the way home from work and place seems deserted still. Does anyone know what they are going for and if anyone is buying?

jwlam, don’t listen to bkshopr, he or she is some sort of feng shui consultant (it’s like being an acupunturist or chiropractor or soothsayer, but less profitable).  The floor plans aren’t for everyone but they are forward thinking and appeal to those looking for something beyond the conforming, spanish colonial IAC style.  Lee homes is a good, east coast builder.

That said, the prices here will drop as it isn’t in the highly publicized, platinum trianlge, it is an attached product and the floor plans are targeted at the younger demographic.  Rental here is questionable as well due to lack of comps and a neighborhood area that has few non-municipal jobs.

As the OP is asking, will one be able to make an offer of 200k, or is that a waste of time, as they will want something more unreasonable.

Any new news on this place?

I haven’t heard anything new.  I was in contact with the sales lady previously but have stopped showing interest over the last couple of months.  I am just waiting to see what their next move is at this point.  I think conversion to rental units might be their next move.  Their recent August price cuts are nowhere near enough.  You could probably get a 2/2 - 1086 sqft unit in the 290-300k range, but i’m waiting for another 30% cut.

that is ashame.  these units are unique and will prob be standardized by a rental corp.

I always wondered what happens when prop like this is converted to apts, essentially ensuring it will never be an ownership property.  What happens to anyone who did close?

why does going rental “ensure” that it will never go condo?

is that just an irvinite thing?  condos have to be ‘new’?  think of all the condos that are converted apartments in Irvine, all the ones with carports along the 405…

In most of the country, condos were not purpose built, but were conversions

So i was driving by this place and being that no one lives here, i guess they ready to bite the bullet and are having an auction to try and drive sales. 54 units starting at $165,000, but that is just the start price and it says there is an unpublished reserve minimum that the seller has that is definitely above the starting price. Any guess on what that minimum is going to be and if these units will be sold? I wouldn’t mind picking one up below $200,000.

Here is more info
http://www.bidkw.com/documents/Harbor_Lofts_Brochure_11.11.09.pdf

don’t forget the $400/mo HOA.  and how much the HOA will go up when all the people using the DAP, FHA loans, and gov’t purchase money kickbacks start defaulting.

These homes have a very limited audience. Resale would be tough in the future. The bedrooms have no walls and absolutely no privacy. I know the 20-30 something buyers like that warehouse open plan or may be a bachelor pad to score his conquests or some cultural “appreciation”. This is no family home and the younger folks have no money. When the bachelors get marry and start a family their wife wants out of these voyeuristic plans.

Not only these plans target a limited audience but also have a very short life span livability.

When will builders learn not to design by template. What worked in Hollywood/ LA proper does not works in OC suburbs. This is a very expensive lesson to learn.

Consult with me for $25 could have saved Lee Homes $25 Mil.

kperez - 20 November 2009 06:57 PM

So i was driving by this place and being that no one lives here, i guess they ready to bite the bullet and are having an auction to try and drive sales. 54 units starting at $165,000, but that is just the start price and it says there is an unpublished reserve minimum that the seller has that is definitely above the starting price. Any guess on what that minimum is going to be and if these units will be sold? I wouldn’t mind picking one up below $200,000.

Here is more info
http://www.bidkw.com/documents/Harbor_Lofts_Brochure_11.11.09.pdf

I never understood why auctions bother with setting a “starting” price but still have a “hidden reserve” price…seems like a waste of people’s time when they win with a bid that’s under the reserve price.  Wouldn’t something like this turn off potential bidders?  For example, on Ebay (the only kind of auction I’ve personally done) I never bother bidding on an item with a reserve price, I only bid on items with no hidden reserve price.  Or are they assuming people are naive enough to be attracted by the low starting price and that draws a bigger crowd of suckers?

fumbling - 20 November 2009 11:44 PM

Or are they assuming people are naive enough to be attracted by the low starting price and that draws a bigger crowd of suckers?

That’s it exactly.  And it works.