Sunday, November 12, 2006

A quick visit to Centex Fusion at Hawthorne

On the spur of the moment we took a quick walk on Saturday afternoon up to the Fusion project. I commented to Bruce as we walked toward the entrance that the sign spinner seemed to lack the pizazz of the more creative ones I had photographed in Westwood. In the photo, with all the construction and traffic clutter, you can barely see her. She is left of center, and if you click to view the full photo, she is approximately an inch up and an inch left of the orange cone you see in the foreground, holding a red and yellow arrow pointing right.

Approaching by foot from the south

There were maybe six potential buyers hanging out in the sales office talking to salesmen. We went to see if there were models we could inconspicuously walk in and look at. There weren't, although one salesman did say that interested parties could be taken out to units under construction. Later we saw one salesman and a couple walking toward some of these units, all wearing hard hats.

Inside the community

I looked around in the sales office and found the infamous Centex coloring book*. I really wanted to get a copy of that coloring book to scan it and post it here, but that would have required that I talk to a salesman and ask for one, and I didn't really think it was fair to occupy a salesman's time when I wasn't there as a truly interested buyer. I was also disappointed that there was little in the way of useful literature available about HOA dues and other expenses.

Centex is having an Affordability Days promotion right now. This is an example of the mortgage terms they are offering - $3,120 a month on a high-end Fusion home. I am no financial wizard. It looks waaaaay too complicated for my taste, and I don't like prepayment penalties at all. Why all the complication? A fixed rate 150 year mortgage would be easier to understand than this gobbledygook! Show me a table of what my payment, principal, and interest are for the next umpteen years, that's what I want to see.

6 - 6.875% / 7.453% APR: Payment fixed for 5 years, based on a purchase price of $723,231 with ZERO DOWN PAYMENT, first five years monthly mortgage payment on the 1st TD fixed ($578,584), interest only at a rate of 3.875% and a note rate of 6.875% APR of 7.453%. The loan allows for buyer to defer 3% of the interest due each year for 5 years and apply it to the principal balance. Monthly payments of $3,120 fixed for the first 5 years – does not include taxes, insurance or HOA dues. After 5 years rate adjusted to fully indexed rate of a 2.25% margin over the monthly Libor Index, currently at 5.542% amortized over the remaining 25 years. Life cap of 11.875% and adjustment caps of 5/1/1. The 1st has a prepayment penalty for 3 yrs, a 1% origination fee. The 2nd TD($144,647) is at 10.375%, APR 10.872 fixed for 25 years, interest only payments for 10 yrs at 1% origination fee and one year prepayment penalty. To qualify for this program buyer must have a FICO score of 720+ on full income documentation.

Is this some kind of joke? Do people really finance their homes with terms like this? Why is this legal still?

When I studied the Centex complex, the units, and then the pictures I took, I decided it wasn't the colors that made the place seem drab to me, it was the architecture. The Centex complex strikes me as very "institutional" looking, with the units looking almost like the city tenements of 80-100 years ago.

Fusion at Hawthorne, south side

If that is true, Centex is not by any means the only builder guilty of building bleak-looking places. Here is a photo of a property on the corner of Manhattan Beach Blvd and Blossom Lane, which Bruce thought had a Fusionesque feel to it.

Fusion Forerunner in Redondo

I had noticed similar "institutional" design condos going up near Blossom and Ripley earlier this year. The condo being built in the photo below sort of reminded me of the jail that Clint Eastwood sprang Gian Maria Volante out of in that old spaghetti western. My own opinion is that this condo looks a bit brighter and perhaps more stylish (thanks to the stonework) than the condos in the previous photos, but institutional-looking nonetheless.

21st Century Nouveau Southwest Jail Cell?

* - The Centex coloring book is a coloring book for kiddies to get them pumped up about moving into a new house where they can color their new room! A gimmick to put yet more pressure on Mom and Dad to take the plunge.

10 Comments:

Blogger bearmaster said...

Sorry most of the photos don't click through. Blogger seemed very messed up while I was posting this.

12:16 PM, November 12, 2006  
Blogger mike said...

i actually just drove by fusion this morning. w/ all of the construction around it didn't really look that appealing. you know, $3000 a month will rent you a really nice place. i still have no idea who's buying all of this crap.

looking at those mortgage terms they buyer's pmt will probably jump to about $6k/mo once the 5 yr neg-am term is up. not to mention the hoa and property taxes. it's reading stuff like this that makes me think that the pain from this is going to last far more than a few years. i would be very nervous buying something like this right now that i'd be upside down in 5 yrs when it resets.

1:31 PM, November 12, 2006  
Blogger Rob Dawg said...

I'll need clarification as to acceptable language before submitting my actual comments. 5lbs of manure in a 5lb sack sells for a premium at the better garden centers. 10lbs in a 5lb sack is a mess that gets all over the place including the stinking out the poor neighbors.

2:07 PM, November 12, 2006  
Blogger bearmaster said...

Robert, LOL!

I was pretty blunt about it before and once labelled these the slums of tomorrow. I guess I was being polite!

What's troubling is these building projects are multiplying like rabbits - which is why I think the bubble will shift down in to these projects. Unlike other Centex projects where there were $100K sales, there has been no sign of such a potential fire sale here. Maybe that will all change in the spring.

The "neighbors" in this place are 1) an MTA greenline car barn, 2) a Federal building to the south, and 3) a senior citizen condo complex to the east.

Being a long-time public transport commuter I think MTA really sucks at times, the senior citizens don't deserve living next to a slum, and as for the Feds, well...

Bruce and I are hoping to pay another visit again when models are ready - and maybe get one of those coloring books to see how the housing bubble is preying on the kiddies' minds...

3:00 PM, November 12, 2006  
Blogger Rob Dawg said...

The HPD will have its own crime code for these projects. Worst example of "defensible space" and "owned space" and percieved density I've seen since Cabrini Greens was dynamited. Those first two are real planning terms with a history of research going back to the 1920s. Percieved density is a newer social construct only slowly gaining acceptance. For an example think of beach living where people tolerate very high densities but are comforted by the ocean. Same goes for mountain communities and the like.

Thanks for laughing. So often the subtext of my comments are lost.

Those rates in the financing bit are obscene. Not because they are high or suicidal or even immoral but because of the way they are worded. "Fixed for five years." GMAFB, that's a variable rate with the first adjustment at year 5. Might as well call ARMs one moth fixed.

I'm planning my next update on the abortion in progress known as Riverpark in Oxnard and I'll see if the Centex people there have any coloring books there although I suspect they may be in Spanish.

5:04 PM, November 12, 2006  
Blogger bearmaster said...

I fixed the photos for this posting on December 9, sorry for the long delay.

5:58 PM, December 09, 2006  
Blogger Kelsey said...

This comment has been removed by a blog administrator.

5:01 PM, May 21, 2007  
Blogger Kelsey said...

I think your opinion of Fusion is completely off. I have searched and searched for a home in Torrance, Redondo, Hermosa, and MB and all we could find in our price range were complete dumps.

At Fusion I can have granite countertops beautiful finishes and more. Plus my ceiling is not going to cave in on me while I am sleeping.

Kelsey

5:02 PM, May 21, 2007  
Blogger bearmaster said...

This comment has been removed by the author.

8:03 PM, May 21, 2007  
Blogger bearmaster said...

Well I'm glad somebody like Centex, but it's still as overpriced as everything else around here. I find it amusing you had to email me twice about it.

8:06 PM, May 21, 2007  

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