I visited La Casella again today, at lunch. Gotta feed the obsession every now and then, ya know. I liked the models a lot more than I liked them the first time through, for some reason. Even Residence 1 with the casita – that could be my home gym!
I engaged the sales person in questions and she was very friendly and attentive. I was quite surprised by much of what she said, though. So surprised, in fact, that I expected my BS meter to be ringing in alarm. It was not, however. Was she just that good at smooth-talking? Or have I lost my ability to smell BS? Or could what she told me have possibly been, in fact, true????
1. Lennar has “paid the bank” for every La Casella unit sold thus far. In other words, they have sold every unit at a loss after taking into account the cost of land and construction costs.
2. During their most recent phase release, every single unit (8) sold out in one day.
3. Lennar has only purchased less than half of the land shown in their plans for final build-out at La Casella. The sales person said it was very likely the remaining units would not be built (by Lennar, anyway. She said Lennar would sell the plans and models to some other company who would take over the development). She said that they are in a “pissing contest” with TIC over final sales cost of the land, and TIC is not willing to come down enough to make it worthwhile for Lennar.
I asked, if by some chance TIC does reduce land prices, what would happen to the units’ asking prices? She said there was no way the prices would be reduced, as evidenced by the quick sell-out of the most recent phase release. She said Lennar would need to maintain or raise prices just to make up for all the losses incurred so far.
I then probed about who exactly has been buying these units. She said many single people have been buying them, with average incomes of 175k to 200k. She also told me that I needed to “change my lens” with respect to monthly carrying costs, and that if I wanted to own in Irvine, or anywhere in SoCal, then I needed to accept the fact that I would be paying 60-75% of my take-home pay on mortgage and HOA. I suggested that in fact most people were not using 30 year, fixed-rate mortgages, but she disagreed and said that most of the La Casella buyers had in fact used the standard, fixed mortgages, and were just paying big monthly payments.
So, your thoughts? Anyone care to comment? Clearly, La Casella is slightly less expensive than other options in Woodbury. But still. Sold out in one day? A loss on every unit? Mostly 30 year fixed mortgages? What is up with this story???