Sunday, September 23, 2007

Mega-developments

Only recently we became aware of a new 27-unit townhome development on a street on the east side of North Redondo, very close to the Galleria, Ruxton Lane. Below is my tricked-up pseudo-panoramic shot, which I had to doctor a little to get out some weird seams.

The signage says the units start in the high $700,000's, and around 1900 square feet.

Another sign says the amenities come included in the price. Given that they start in the high $700,000's at 1900 sqft, these units run maybe a sliver below current Redondo median price (as I've calculated it), and maybe slightly above median square footage. I am a housing bear, and for now nothing in Redondo strikes me as a terrific deal. If you are looking to buy, bubble talk be damned, and you aren't paying attention to amenities and just want a lower price, there are actually a handful of places in Redondo for sale in the mid-to-high-$700,000's with comparable square footage, in some cases with a seller possibly willing to knock down the price a little more.

On Saturday morning we decided to drive by after we got the bulk of our grocery shopping done. When we got to Ruxton Lane there wasn't another soul around. And then that big storm hit. I couldn't even get out of the car for a while to take any photographs, but we sat there parked on the opposite side of the street and just watched the water pound the new townhomes.

That was when we learned it pays to look at potential property for sale in weather like this. You see these red arrows? The one on the right points to a drainpipe that ascends over the front porch, and we watched water pouring off that front porch roof right on to the path. Now imagine living here and getting soaked each time it rains, hee hee! If I were looking to buy this unit I'd insist the builder fix this, at no extra charge - after all, with what you'll have to pay for housing around here, you're already getting soaked. The arrow on the left shows another drainpipe from the roof that dumps the water on the side.


Now back down to Torrance and the Torrance Farmers Market. It turns out there is another development being built on the same patch of land where the Standard Pacific developments are located, only it's not built by Standard Pacific. It's built by West Millennium Group, and the development is called Parkview Court. It's for seniors (55+), and square footage ranges from 706 to 1255. Prices are supposed to start from about $359,000. Some of the "features" include wide spaces for wheelchairs. Photos I've taken of this construction area in fact include some of this Parkview development.


Now on to San Pedro. According to the Daily Breeze (link expires), the Seaport Homes condominium project is undergoing a change in direction, thanks to the housing market slowdown. The developers now want to lease out the 136 units with a purchase option. However, much optimism abounds that this will only be temporary, and these will eventually be sold. Some of the readers responding to the story weren't so sure, asking how long before the development starts accepting Section 8 (HUD) tenants.

San Pedro condos to be leased rather than sold
Market woes and slow sales cause a major shift in the project's direction. Seaport 
Homes on Western Avenue will rent its 136 units for now.
By Donna Littlejohn
Staff Writer

The sluggish real estate market is taking its toll on one San Pedro condominium 
project that's still under construction. Seaport Homes on Western Avenue will now 
lease out its 136 units rather than sell them.

Billed as luxury condominiums and priced from the $400,000s for the smallest 
one-bedroom homes, Seaport Homes reportedly sold only about 15 percent of the units 
in advance of the scheduled opening in January.

"Mainly the market's not good," Seaport spokeswoman Nancy Bush said. "It's hard for 
people to get a loan, so we thought we'd let people try it out on a lease with a 
purchase option first, to kick the tires, see how they like it."

Open house signs have come down on the property.

Rents will range from $1,500 for a one-bedroom, one-bath to $2,750 for three bedrooms 
and three baths, according to Seaport's Web site, www.seaport-homes.com.

No information was posted about the length of leases or other terms.

Bush said it is anticipated that the units will go up for sale later, after the 
housing market rebounds. Those with leases would have first right of refusal to buy.

Some nearby residents worry the conversion will mean even more traffic for already 
heavily impacted Western Avenue.

"If you look at traffic studies, apartments generate more traffic than condos," said 
Diana Nave of the Northwest San Pedro Neighborhood Council.

Most observers chalk the move up to bad timing for condominiums that are coming 
online during a nationwide housing slump.

"It's a sign of what's happening with real estate right now," said John Greenwood, a 
real estate broker with ERA Golden West Realty in San Pedro. "We had a developer who 
worked with our office, and he did the same thing. He rented them out, and then in 
two or three years he sold them. It's not an unusual thing to happen, but it's a sign 
of the market."

But others say the development didn't live up to its brochures.

"It wouldn't surprise me if people saw it and what they were asking and said, `Wait a 
minute,"' said Dan Dixon, president of the Northwest San Pedro Neighborhood Council.

"It's a monstrosity," Nave said.

The four-story Seaport development, dubbed "The Monster" by critics because of its 
stacked, high-density appearance from the street, is going up on Western Avenue at 
Fitness Drive, just south of the proposed Ponte Vista project. Two underground 
stories will be used as parking.

"I don't think you can quite tell (what they'll look like) until they're finished," 
Bush said. "We've done our best to follow all the requirements."

Even though the neighborhood council approved the development several years ago, 
Dixon said the vote would come out differently if held now that the units are under 
construction. The homes are being "rammed into a very small area," he said.

"It's a foolish development in the wrong place," he said.

The Seaport units are wedged between two existing condominium projects, the 64-unit 
Tennis Club to the west and the 130-unit Casa Verde Estates to the east.

Bob Bisno, who wants to build a 1,950-home project on nearly 62 acres directly to the
north of Seaport, said the Seaport development site is better suited for apartments 
than condominiums.

"Their development looks more like an apartment than condominiums," Bisno said.

John Long, president of the Casa Verde Homeowners Association, said his condominium 
has more than tripled in value since he purchased it in 1997. He said the Seaport 
units next door will look nice when they're finished.

"I'm pretty sure (the new condominiums) will raise the property values," he said.

Some nearby residents, however, continue to worry about the growing density and how 
it will affect traffic, schools and other quality-of-life issues.

In a March 11 letter to the editor to the Daily Breeze, local resident April Sandell 
called Seaport "a poster-child for poor traffic planning and density gone wild."

The only vehicle access to all three developments built in a row is Fitness Drive, a 
narrow, private road off Western where there is no traffic signal.

There could be as many as 400 residents in all three developments when they're 
filled.

There have been discussions with Bisno about building a new access road on the vacant 
parcel in front of Seaport that Bisno owns.

Bisno's plans for Ponte Vista, meanwhile, are still going through city planning 
reviews.

Mark Wells, a blogger who has opposed the Ponte Vista development, fears that what 
happened to Seaport could be repeated at Ponte Vista, a much larger project.

"If Seaport had to go with leases, what makes anyone truly believe that Ponte Vista 
(won't) suffer the same fate … ?" Wells wrote.

That won't happen, Bisno said.

"Our capital structure and partners aren't the same" as Seaport's, Bisno said. "It 
would be irrational for us."

Ponte Vista also will offer a very different product than Seaport, according to Bisno 
spokeswoman Elise Swanson. Ponte Vista, she said, will include a resort-style design 
with lots of open space and park-like amenities.

"I'm a dyed-in-the-wool optimist," Bisno said. "I'm confident that by next summer we 
will have seen the bottom (of the real estate market slump) and we will be on the 
mend."

3 Comments:

Blogger wannabuy said...

from the article:
"I'm a dyed-in-the-wool optimist," Bisno said. "I'm confident that by next summer we
will have seen the bottom (of the real estate market slump) and we will be on the
mend."


I'm an optimist too! And the charts say next summer is too early.

And yes, my answer in November of 2005 (when I started posting in blogs) would have been quite different. Live and learn. No mistakes made, so I'm happy. :)

I now have studied real estate cycles, modeled this one, and compared. It should be very interesting right around thanksgiving.

See you at the dinner on Sunday!
Neil

5:31 PM, September 24, 2007  
Blogger bearmaster said...

It's interesting how this time around things are drawn out over a longer time, isn't it? I'll be an optimist too, when the legs are cut out from current prices! :)

5:51 PM, September 24, 2007  
Blogger deathcat said...

I lived in Seaport homes and it is a horrible place to live. I like the location, but the building is cheaply made, everything is new and breaks and the fire alarm is always sounding off at 6 in the morning. To top it off, the landlady is a horrible person and treats you with disrespect. Beware.

12:32 PM, March 03, 2009  

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