Lincoln BackLogs
A reader sent in an article from the Sacramento Business Journal:
The small city of Lincoln has become the stage for a battle between homebuilders for the dwindling number of homebuyers in the Sacramento region. Five years ago, few builders would look at the city. Today, it has an oversupply of subdivisions -- more than any other city in the six counties...From the Tri-Valley Herald:
Today in Lincoln, 16 homebuilders hold 36 subdivisions with more than 2,000 lots -- more new-home communities than any other submarket in the region, said Greg Paquin, owner of The Gregory Group, a Folsom firm that studies the market...
Now Lincoln's builders are pulling out the stops. Their incentives for homebuyers average $24,016 -- more than any submarket but West Sacramento, which averages $31,000 for its 21 projects, Paquin said. Elk Grove's average incentive is $12,851. Besides gifts, builders also have lowered prices, sometimes dramatically. JTS Communities has this year offered homes for $500,000 that had been priced at $650,000 to more than $700,000, said Ian Craig, general counsel for JTS.
From the Wall Street Journal:With older homes in established neighborhoods sitting on the market for upwards of a year, new home builders don't see the lines of buyers waiting for a lottery to purchase homes. So they're getting creative.
Pulte Homes, with subdivisions in Brentwood, Oakley, Mountain House and Tracy, is offering $99,000 in incentives -- from a free pool to no payments for six months to free upgrades -- to entice buyers. They're even offering each home buyer a vacation for two with a destination of choice for closing before Christmas this year...
Ryland Homes is offering 40 percent off mortgage payments for the first year (to commemorate it's 40th anniversary), while another developer had been offering a free Mercedes-Benz with the purchase of a home.
Home builders have a new trick to try to sell you a new home: They will help you get rid of your old one. Faced with falling sales, some builders are helping would-be buyers spruce up their current home by bringing in professionals who advise them on what furniture to get rid of and tell them whether they should rip off the wallpaper... For instance, Pulte Homes Inc. recently started pairing its customers with professional "stagers" who sweep in and do things like remove window coverings and touch up the paint, and covering up to $2,000 of the cost of the service. The program is available in about a dozen markets, including Detroit, Indianapolis, Sacramento, Calif., Tampa, Fla., and Washington, D.C.Hat tip - Northern New Jersey Real Estate Bubble blog
12 comments:
Pulte Homes, with subdivisions in Brentwood, Oakley, Mountain House and Tracy, is offering $99,000 in incentives -- from a free pool to no payments for six months to free upgrades -- to entice buyers.
Do the builders not know that we can see right through this scheme? In an age of pending depreciation, only a fool would think of $100,000 in incentives as being a reasonable offer. So what if your house shows perfectly on the inside? You won't be getting back what you paid for it for a decade or so, regardless of how many square feet of granite countertops you boast.
Now, if you had told those same salesfolk to cut the crap and just give you the money off the price of the house, maybe you would be starting to see a realistic negotiation (and even then I am not so sure, depending on the up front asking price--$700,000 to live in Lincoln?? C'mon! Have they even started work on the bypass yet??).
Until the sellers get the clue that we aren't interested in paying for their marked-up extras and incentives at 7% interest over 30/40/50 years, I guess we will just have to keep sitting back and laughing at their bogus attempts to come to terms.
Hahahaha! Sure makes for some good readin' & entertainment.
PEOPLE JUST HAVE TO BE RIGHT ON THE HOUSING BUBBLE!
I have been investing, financing and brokering in real estate for almost 20 years. From practical hands-on experience in every aspect of real estate my goal here is to be the “Calm in the Eye of the Storm”. Remember that “they” said Warren Buffet was a genius before the Internet Stock craze and after, but apparently not during it. Read more: http://millionairenowbook.blogspot.com/2006/09/people-just-have-to-be-right-on.html
Oh, geez. Larry has been here too, I see...
The bus journal article is old - 9/1
JTS sold 10 homes in their 1st 10 days of the promotion - spectacular!
I'm sure they don't care what you think.
Anonymous said...
"The bus journal article is old - 9/1
JTS sold 10 homes in their 1st 10 days of the promotion - spectacular!
I'm sure they don't care what you think.
Monday, September 18, 2006 9:14:37 PM"
Super! Ten buyers that are no longer in the market for an existing home and may even need to now list their old ones.
In Lincoln, on lot 14 plan 165, JTS is selling a 3400 sq/ft house for $142/sqft plus the builder will make the payments until May '07.
That's pretty tough competition for 1800+ resale homes 10 miles away in Roseville/Rocklin that are mostly listed upwards from $240 sq/ft. Throw in a dozen other builders cranking out homes in the brand new developments of West Roseville, Fiddyment Farms, Crocker Ranch, and Whitney Ranch and I am certain that prices MUST scream up from here. Perfect time to start flipping right?
Keep up the "spectacular" sales builders!
Anonymous said...
The bus journal article is old - 9/1
JTS sold 10 homes in their 1st 10 days of the promotion - spectacular!
I'm sure they don't care what you think.
I am sure they don't care what any of us think. They are too busy choosing who they are going to layoff in the next round.
Re: "Lincoln Logs"
As Abe Lincoln said, "There's a sucker born every minute"...or wait, maybe that was PT Barnum or someone else of that ilk...
There has been so much Hype in the Sacramento Region one has to walk around in hip boots...
Some guy is selling his 6000 square foot stucco box in El Dorado Hills for 1.25 million which features about the smallest postage size lot known to mankind and the biggest conglomerate of stucco crap on the planet and you can look into the neighbor's bathroom shower...kinky...
While downtown Sacramento, developers on the government dole are peddling high-rise condos for a million bucks that feed into a new Target store at K Street Mall...sweet...maybe Saca can get you one of those no downpayment interest only loans for that condo..
And now Lincoln Logs will sell you out by the Yuba County Pottery Barn a real nice stucco number, and throw in, a pool, a new Kia, Subzero appliances, a trip to Manteca, phony grass and plastic flowers, dinner at Denny's, and a genuine house slave...
Dear Anon 9:14,
I predict the JTS homes will go to auction in January or February. If they sold 10 homes, eight have already cancelled. I saw some "sold" signs the first two weekends. Guess what, all but ONE sign flipped back to "available" in the next 3 weeks. None of the deals are sticking...because it does not make sense to pay $175/sf (even if it is down from $250/sf) for a home that rents for $.65/sf/mon. Do the math. The Mello Roos bonds, taxes, insurance, & maintence eat up $.30/sf, or ONE_HALF the rent. JTS and the "liquidation" is still a huge joke. Houses that were supposedly "sold" weeks ago, are now being shown to new greater fools.
Have you been to the JTS Estates at Lincoln Crossing lately. There are 150 homes which have TEN people living in them after 18 months. That is not success, that is suck-cess-pool.
JTS DOES CARE WHAT WE THINK BECAUSE THEY ARE LOSING THEIR SHIRTS. Three weeks ago, their adds said, "come to a million dollar neighborhood and buy a home for $500,000." But when you get there, surprise, there are no million dollar homes. The homes they offered, were marked up $100,000 before they offered the 'huge" $200,000 off, for an effective 14% discount. Based on their advertising, buyers THOUGHT they got a deal with 50% off and mentioned that when they showed up. Have you noticed how they got they stopped using that promotion. More suck-cess incorporated.
Yes only the biggest GF would touch a JTS home today. It is tainted goods on the way to the bottom of the market. They sold 100 homes to investers in Lincoln and made losers of every one of them. If you buy a JTS home now, and 40 go to auction in February, you will be the F'd B, just like the 100 that exist out there already. Even if JTS can reduce prices 50% to dump inventory without an auction, many of the 100 FB Flippers will let their homes go foreclosure and the values will continue dropping. And if the flippers keep them, it is going to be Rental City for years to come. Wait until the 6 college students move into the 6/bd 4/ba home next door to you. Ooh, that will be fun at 2 AM on a Saturday night. And good luck with all the cars parked on the street. A neighborhood made in heaven......
JTS made their bed of 100 F'Bs. Now they will have to lie down with them and take their lumps too. It is very poetic justice, unless you are an owner there who lost $200,000 in equity in the last few months.
Anon said: "In Lincoln, on lot 14 plan 165, JTS is selling a 3400 sq/ft house for $142/sqft plus the builder will make the payments until May '07."
Note, lot 14 is a "2400" sf home for $507,000. This is $209/sf and it is STILL way over priced. JTS is a joke for value. KB is selling 3200 sf homes for less than $500,000 in the same neighborhood.
Hey, I don't get this: A BIGTIME Bay Area builder of super high end, pretty much custom homes (Greenbriar Homes)is building dozens of GIGANTIC split level (3 story) homes right across from JTS's developement in Catta Verdera. They are on 1-2 acre lots.
They claim to have sold 2 of these 6000+ sq/ft. monsters in the first release already- these homes are listed at $1,300,000 What gives? thats 200/sq ft. and seems to be selling like hotckaes?
We had a deposit on a JTS home at Lincoln Crossing. It was a 3600+/- sqft model home (had the upgrades, cherry, granite, tile, etc, etc) for $585K. That worked out to $165sqft - not bad, not great. The JTS homes are very nice, but still overpriced in today's market (heck, almost everything in Sacramento is overpriced, but we all knew that a couple of years ago). Plus, after I looked at the number of investor owned homes in the JTS development, I decided to keep looking.
Someone mentioned KB Homes offering value - we looked at KB - that's not value - it's just low price. Value = $ / benefit.
We are originally from Sacramento and decided to move back after living in the Bay Area for 10 years. Well, most of Sacramento isn't much to look at and Elk Grove and the South are out of the question. We chose Lincoln b/c it's away from the crowded areas and still has a small town feel (plus, the Clubhouse is a big draw for us). It's close enough to Rocklin and Roseville w/o the $200sqft+ prices (and that's for existing homes). Plus, if you are looking to swoop in and get some great prices, its a good time in Lincoln. Sure, prices may continue to go lower, but if you make the right deal, you (like I) can find the home you want to live in at a good price.
After dropping the JTS home, we went to Centex (Claremont development). Centex offers much more value for the dollar (this is true dollar value, not just low prices like KB) and the homes are nice. Got a 3900+ sqft home for almost $100K less than the JTS one and the Centex home has more upgrades and a better floor plan. Centex let us use their incentives to knock down the purchase price. Very good of them.
In the end, Lincoln may not be the hotbed of real estate investment, but for people like us who are moving back, its a great time to be there.
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