A visit to Standard Pacific's The Village on Oak
On Saturday we decided on the spur of the moment to visit The Village on Oak, after our usual grocery shopping at the Torrance Farmers Market and then swinging by Trader Joe's and Whole Foods. If you are not familiar with it, The Village on Oak is a multiunit Standard Pacific condo project in Torrance.
Below is a pseudo-panorama I took of ongoing construction at the site of The Village. (This was taken on August 4.) I don't know how many units in total there will eventually be at this site, for all the projects (Bayberry, Acacia, Laurel, Foundry), but it will be in the many hundreds.
Standard Pacific is having a Mission:Possible blowout sale this weekend, and I wanted to see if there was any evidence that people were biting. Bayberry and Acacia units are for sale - Laurel and The Foundry are not yet available.
Bayberry's units run roughly 1800-2000 square feet, 3 bedrooms, 2+ baths. When we viewed the three model units, I felt a little "cramped." My significant other pointed out that the ceilings were not the high cathedral ceilings we are so used to seeing when we tour new construction in Redondo, and so I initially thought that was the reason for feeling so "confined." I asked the saleslady how many units they were selling, and they have 13 left out of 71.
We visited the Acacia models next. These floorplans range from 1250 to about 1400 square feet. When we visited the first Acacia model, I immediately felt better - not cramped or confined - even with the low ceilings. We attributed it to a better use of space in the Acacia designs, whereas Bayberry felt like there was more wasted space. The Acacia saleslady told us the models were being sold "as is" - I guess that includes all the furniture and decorations they use inside to stage a place. There are 9 units left out of 97.
I think the Acacia models start from around $550,000. These homes are not cheap.
Tonight I looked over some of the paperwork I picked up, and found out that the monthly HOA fee is $298, but then is expected to drop to about $258 when "buildout is complete." The property tax rate is 1.06%.
The only type of financing mentioned in the Mission:Possible brochure I picked up was 30 year fixed rate. In the fine print, the rate is 5 3/8% (5.966% APR) for loans of up to $417,000. For loans greater than that amount, the rate is 5 7/8% (5.904% APR). There is no explicit mention of any other forms of financing. Historically, those interest rates are not bad - but the problem is, there is a lot of bubble built into home prices, and the free 42" plasma TV that comes with the home is not going to make up for that. The incentives are built in to the price, so the reality is that people are paying property tax, and mortgage interest, on that plasma TV and all the other incentive goodies.
A Bayberry financing handout showed 30 year-fixed rate, 5/1 I/O ARM, and 7/1 I/O ARM.
I have never seen the inside of the Centex fusion units, but I confess I like the outward appearance of these Standard Pacific units better. However, this high-density style of living is not something we like, so we would not consider these even with several years of bubble leaked out of the prices.
Were people interested? We noticed 4 or 5 other families walking through the models, so yes, there was interest. I would call it, "a steady trickle" of interest. With 9 out of 97 and 13 out of 71 units left, what has been built so far is mostly sold out, so I doubt there will be much buyer resistance to the remaining units.
posted by bearmaster at 12:29 AM
4 Comments:
By the way, The Village projects are in 90501, which is covered in the regional real estate tracker.
Reading the fine print on the financing terms, the Mission:Possible brochure says "fixed rates as low as" 5 3/8%. Then there is an asterisk, and when you flip to the back side and look at all the Standard Pacific Properties in So Cal, the Torrance properties are not marked with that asterisk. So that "as low as" phrase probably does not apply.
On the Bayberry sheet, the sample 30 year fixed rate loan financing with 10% down shows a first mortgage of $560,000 at 7.5% (APR 7.584%), and a second mortgage of $70,000 at $8.25%. Adding up the mortgage payments, property taxes, and HOA, the total monthly payment is $5,357.82. There's no mention of PMI.
That's an incredible financial burden to take on.
$5,300 or so is quite a burden.
At 50% of income, that implies over a $125k income. Considering how rare that income really is (even in socal), that is about 146 people who either should have gotten into a nice home... or more likely about 76 who will default and 70 will will stick it out. :(
Sometimes I have shadenfreude, sometimes sadness. I'm not sure which in these units. It will be forever until they can sell them again.
Got popcorn?
Neil
Hi Bearmaster,
I stumbled across your blog about a year ago and when I saw that you lived in my area, I've pretty much been a regular reader of your posts.
Anyways, I heard about Standard Pacific's Mission: Possible on the radio and decided that I had to see for myself what kind of incentives they were throwing in. The wife and I hopped in the car Sunday afternoon and visited The Village on Oak.
Only the Bayberry homes had 3 bdrm plans so we just looked at those. We came away feeling the same way you did. The homes were staged nicely, but weren't dumb enough to fall for that and be blind to the fact that the homes just felt cramped to us. We looked at the info sheet and it was $733,000 for Plan 2! I could find a SFR in Torrance of Harbor City for cheaper!
Our income is around $180k/year and at a traditional 33% housing expense to income ratio, this place still would've been out of our price range.
I don't understand, either some people are making WAY to much money out there, or they're out of their minds to make that kind of money and buy a place like this.
Or lastly, they're just taking out stupid loans. But I don't understand how that's possible anymore? I was talking to the sales guy at Standard Pacific and he was saying it's very difficult to get 2nd loans now. You could probably put 10% and have to pay PMI now...
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