Wednesday, November 14, 2007

Daily Breeze: Are housing projects crowding Torrance?

One of the issues I've been harping about on this blog for the past 2 years is the building of the high-density, sardine-can style housing we've seen in places like Centex Fusion, Village on Oak, and 360 at South Bay. People's perceptions of what makes good value in housing will change as social mood changes.

The November 14 Daily Breeze story by Nick Green appears to be a definite example of these changes happening. The story is about the increased gridlock that Village on Oak has brought to the Carson-Crenshaw area of Torrance. It was blatantly obvious to me 2 years ago when there was nothing but a hole in the ground on Oak Street that traffic would get unbearably dense, but somehow the politicians who approved the project just didn't see it that way. Now at least one politician regrets his approval on the project.

The sad thing is that of the 3 major high-density projects I've looked at, either in visiting or passing by - Centex Fusion, Standard Pacific's Village on Oak, and William Lyon's 360 at South Bay - the Village on Oak strikes me as the nicest looking - the least bad of the the three.

You can see some old photos of Village on Oak (and Parkview) under construction by querying this blog with "Oak".

The link may expire, so the story is reproduced here.

Today is Wednesday, November 14, 2007
Originally published Tuesday, November 13, 2007
Updated Wednesday, November 14, 2007
Are housing projects crowding Torrance?
Locals fear that high-density residential units may bring even more traffic congestion to an already busy area.
By Nick Green
Staff Writer

An imposing 3 1/2 story edifice containing 59 pastel-colored condominiums aimed at 
seniors called Parkview Court is rising on just 1.15 acres in Torrance at the corner 
of Oak and Jefferson streets.

Immediately next door on Jefferson, a crane looms over the wood frames of what city 
officials describe as one of the densest developments in the city in the past decade. 
Named The Foundry Lofts, the project will boast 86 four-story condominiums on just 
1.9 acres.

And next door on Oak, residents already are moving into the largest of the trio of 
housing developments that occupies a 13-acre site.

The Village on Oak is a 198-unit town house project that also has a second phase of 
33 town houses that will be built next year on the present site of the Rolling Hills 
Prep Gym.

The 376 homes jammed into just over more than 16 acres of former industrial land 
opposite Wilson Park is unusually dense by Torrance standards, generating calls to 
the city from startled residents as construction progresses.

Todd Hayes, co-president of the Old Torrance Neighborhood Association, describes the 
development as the “poster child” for precisely the type of housing subdivisions many 
residents don’t want to see.

“I think, like most people, it just seems like a big development behemoth,” he said.

“It may be it got out of control,” he added. “What started as a ‘let’s clean up the 
neighborhood’ idea morphed into what we’ve been railing against ever since.”

The first 276 homes were approved in 2003, years before political sentiment turned 
against rezoning industrial and commercial land for housing. The remainder were added 
two years later when the scope of the project was enlarged.

Four years ago, city officials were eager to embrace transforming an eyesore of heavy 
manufacturing plants into tidy suburbia.

“This area is really ripe for transition,” Councilwoman Hope Witkowsky said when the 
City Council approved the project in October 2003. “I think this sleepy little area 
lends itself to this kind of project.”

Except that critics point out there’s nothing “sleepy” about the neighborhood. The 
park and its array of recreational facilities across Jefferson is one of Torrance’s 
busiest, home to the annual Independence Day celebration that leaves vehicles parked 
on streets for blocks in every direction.

In addition, thousands of shoppers come to the farmers market on Tuesdays and 
Saturdays, jamming surrounding streets with cars, especially on weekends.

Across Oak Street is Torrance First Presbyterian Church, a so-called megachurch that 
is one of the South Bay’s largest, where more than 5,000 worshippers attend Sunday 
services.

And the almost 400 homes are being plopped down into an area with limited vehicle 
access.

Jefferson dead-ends at Wilson Park, although it’s possible to weave through the 
park’s parking lot to reach Plaza del Amo.

There is no traffic signal where Oak intersects with busy Carson Street, a major 
commuter artery that makes left turns from Oak virtually impossible.

And the signal at Jefferson and Crenshaw Boulevard, a few yards from another traffic 
light where Plaza del Amo meets Crenshaw, is a notoriously familiar bottleneck to 
Torrance motorists.

“You’ve just created a nightmare — and they’re still building,” said Councilman Bill 
Sutherland, who was elected last year on a platform of stopping what he perceived as 
rampant residential construction.

“There’s only two ways in and out (of the area),” he added. “That’s going to be the 
biggest downfall.”

So dense are The Foundry Lofts, the crane is needed to move materials around because 
of the lack of space on the building site. That’s a common sight in densely populated 
Europe, but not so in the U.S.

The development of 86 one-and-two bedroom condominiums is “more urban, something 
you’d see in the city,” conceded an employee with developer Standard Pacific, who 
asked not to be identified in accordance with company policy.

While those 86 units are crammed onto a lot of under two acres, the entire tract 
averages out to 23.5 units to the acre.

“It isn’t as dense as people think it is,” said former Torrance Councilman Don Lee, 
who served as a consultant on the project and was elected to the Torrance school 
board last week.

Still, for some, the trio of housing developments is too much for suburban Torrance.

“It’s not too dense for everywhere; it’s too dense for Torrance,” Sutherland said. 
“We want single-family homes.”

Of course, not everyone can afford a single-family home in a city where the median 
price of one is north of more than $675,000, according to Altos Research, which 
provides analyses of real estate markets.

“The density and the three-story height is the reason we can offer prices in the 
$300,000 range,” said John Mavar, project manager for West Millennium Homes’ Parkview 
Court.

About one-third of the one-bedroom homes for seniors that start at $319,000 are 
already reserved, he said.

Prices are not yet set for The Foundry Lofts and sales won’t start until next year.

Prices of the town homes at The Village on Oak start at $547,000. “Price was a big 
selling point,” said Greg Wong, 35, a graphic designer who recently moved into a 
two-bedroom condo in the subdivision. “It didn’t really click it was going to be so 
dense.”

Wong, who grew up in Rolling Hills, said he likes his new home, but is already 
experiencing problems critics say will only get worse as more residents move in.

Traffic congestion on Saturday and Sunday morning is severe.

It’s a good thing he customarily turns right onto Carson Street to head to the 
freeway because turning left is “ugly,” Wong said.

And guest parking is extremely limited.

With six homes sharing a common driveway inside the development, neighborly relations 
are a must, he said.

“I’ve met almost everybody,” Wong said. “You have to get along with everybody. It’s 
almost mandatory.”

Wong’s neighbor, Mike Martinet, 60, moved with his wife to the development from an 
older condo they owned in the Hollywood Riviera section of Torrance.

He, too, simply accepts the density as an inescapable reality.

“Everything is dense, but it’s well-planned,” he said. “It’s the wave of the future. 
There is no land left, especially in densely populated areas like the South Bay.”

Still, he also wonders what the traffic will be like in the area once the development 
is fully occupied.

But some residents — especially in the senior project — will undoubtedly be like the 
75-year-old mother of Torrance resident Esther Kimm.

“It’s very convenient for my mom because her church is right next door and the 
farmers market is right there,” Kimm said. “She doesn’t have a car and those are the 
two places she goes to the most.”

Sean Doyle, project manager of The Village on Oak, said many of the buyers are from 
the South Bay, where smaller, new homes are difficult to find. Mavar agreed.

“I’m finding most (buyers) are local residents who have been watching the 
construction as it progressed,” he said. “I’m specifically looking at empty nesters 
downsizing.”

Former Councilman Mike Mauno originally voted against approving the residential 
development, but not because of its density. He didn’t like the proximity to 
industrial uses.

By the time that was removed in 2005 and the 86 units of The Foundry Lofts and the 
second phase of The Village on Oak was added, he voted in favor of it.

“There’s a big need for senior units,” he said. “Many parents, like my father, now 
are empty nesters and they have these three- and four-bedroom homes and they’d like 
to stay in the area.”

Like Mauno, Mayor Frank Scotto also changed his vote on the project — but in the 
opposite direction.

In 2003, he voted in favor of the residential development. Two years later, as the 
project grew — and the mayoral campaign neared — he switched his vote to a no.

“It’s one of those ones you wish you had back or wish you could do over again,” he 
said. “(Initially,) it seemed like it was a good project. The second time around it 
was obvious it was too large. … The end result is, it’s going to create an enormous 
amount of traffic.”

nick.green@dailybreeze.com
USER COMMENTS ( 5 of 38 total | view all )

"This is ridiculous"
I always avoid driving on Crenshaw between Sepulveda and Carson on Farmer's Market 
days because of the gridlock. Once these condos on Jefferson and Oak are at capacity, 
you can expect the gridlock to be a daily occurence. It seems to me as an East 
Torrance resident, that certain parts of Torrance are excessively over-developed. My 
parents live in the Southwood area and their neighborhood succesfully prevented 
condos from going up behind the Union Bank buliding. It seems like the city council 
values some residents of Torrance more than others.
posted: Wednesday, November 14th at 17:11 PM

"TORRANCE CITY COUNCIL SUCKS"
WHAT A BUNCH OF LOOSERS ALL OF YOU ARE, SHAME ON ALL OF YOU, YOUR TURNING TORRANCE 
INTO ANOTHER GHETTO, HOPE ALL TORRANCE POLITICIANS BURN FOREVER IN THE BOTTOMLESS 
PIT.

- SHIRLEY
posted: Wednesday, November 14th at 16:40 PM

"Passing Blame"
So easy to blame the past officials. Lets stand up and be counted. Lets vote on a new 
General Plan that reflects the wishes of the voters in the last election. We have new 
people in office..lets see if they follow through with campaign promises..and the 
clock is ticking.....Frankie
- Frankie Lane
posted: Wednesday, November 14th at 16:35 PM

"love all the comments"
torrance is looking pretty shabby and a cramped sardine can.. i agree with the word 
disgrace
posted: Wednesday, November 14th at 15:52 PM

"How are the schools affected?"
What about the impact this over development is going to have on Torrance schools! Our 
schools where not zone to hold so many people. They are old and in need of repair 
already. Just think of the impact the over population will have on the old school 
buildings. The traffic around Wilson park is already insane on weekends - sometimes 
it takes 30 minutes to get down Crenshaw from Torrance Blvd. to Lomita Blvd. on a 
Saturday. This overpopulation will ruin Torrance's appeal and the property values 
will go down...way down.
- Torrance Mom
posted: Wednesday, November 14th at 15:37 PM

Tuesday, August 22, 2006

From the South Bay bubble scrapbook

I just recently got a new camera and we've been playing with it. I've been wanting to post more bubble photos here and now I've finally got a decent camera for the job.

My significant other has even managed to stitch together two movies (OK, movie is stretching it a bit) of the Centex Fusion at South Bay construction site. They're actually made from very long JPG files but you can view them as panoramas in QuickTime, if you just move your computer mouse to the left or right.

If you want to view these movies, I recommend you right click on the links below and save them, then open them up with your QuickTime. If you try viewing it in the browser, it takes longer to download and you don't get as big a picture.

The first movie (right click for .mov file) starts with a view of Bruce's bike, but beyond it, looking north on Aviation Blvd, you can see the big Fusion sign. Start scrolling to the right and you can see some flags and a little of the construction. Keep scrolling and you'll be looking east at the Federal Building, then you'll be sort of looking east along Marine toward the north end of the Northrop Grumman facility, which is just across the street from the end of the Metro Green Line. Continue scrolling and you are looking south along Aviation Blvd toward the interection at Marine Ave. Continue scrolling, and you're now looking west, towards the gas station, ball field, and another Northrop Grumman facility. Then it wraps around looking north again.

The second movie (right click for .mov file) starts a bit closer to the Fusion construction site, sort of looking northwest. The site is immediately south of the MTA Green Line car barn. Due north, you can see a Marriott hotel. Keep scrolling and you'll pan across the construction site. Oh boy, lots of sardine can housing!

OK, on to some photos.

The Westwood sign twirlers are busy, as you can see. I think they are out there every Friday. My supervisor did in fact confirm for me that UCLA is trying to sell these former student housing condos quickly, before some other big condo project nearby hits the local market.

And now for Playa Vista. Blog readers know that up to now the Playa Vista market has been on steroids and still doing very well relative to the rest of the westside and south bay. I took these pictures off the express 3 Santa Monica bus last Friday evening, coming home from work. The area is starting to look like one loooong stretch of condos interspersed with business parks - nothing but construction as far as the eye can see....

On to Torrance. Every Saturday we religiously haul our Red Ryder wagon to the Torrance Farmer's Market at Crenshaw and Jefferson, at the north end of Charles Wilson Park. Standard Pacific Homes is building an enormous project on Oak Street just north of the park. As best as I can tell, this megaproject consists of: the Village on Oak - Laurel, the Village on Oak - Acacia, and the Village on Oak - Bayberry. I just can't wait for all that to be built so I can fight my way in to the Farmer's Market every Saturday morning.

These shots are from driving south on Oak Street toward the park. The construction site is on the east side of the street.

These photos are from Jefferson Street, which runs east-west along the north side of the park. In the second picture we're actually standing in the Farmer's Market parking at the north end of the park.

That's all for the moment. I really need to quit now since I get up at 4 AM.

Sunday, September 16, 2007

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.

Sunday, November 26, 2006

More for the South Bay bubble scrapbook - Village on Oak

The Saturday after Thanksgiving was an extremely light day for shopping, as far as I could tell - hardly any traffic! That included the Torrance Farmers' Market at Charles Wilson Park. And we were running a bit later than usual. Anyway I thought I'd snap the progress of the multi-unit condo project called The Village on Oak. I've blogged about it before.

According to Standard Pacific Homes, there are three projects being built there. The Village on Laurel looks like it will be done last. Acacia and Bayberry are in progress.

I wish these home builders would offer a little more about the design and architecture of these places on their websites. I am not an architecture expert by any means. Standard Pacific Homes says nothing about style on its website. From the back, these townhomes vaguely remind me of the council houses of Great Britain because of the way they are packed together, though they have more style to them - what do you call it - pseudo Cape Cod? Colonial? Even though I sort of like the earthy tones of Fusion, within limits, I definitely prefer the style here.

We drove in past the entrance sign toward this structure here and encountered a security guard sitting in a car who said "Sorry, we're not open until 10!" I asked if it was OK if I took a few pictures and he said sure. This structure is the entrance to a community swimming pool.

I think the building here is part of Acacia. Prices are apparently from the mid-$500,000's. Too bad the lighting is so bad.

This looks like a Bayberry structure. Prices are from the high-$600,000's.

Here are some views of construction, from the Farmers' Market:

I pray it will never happen, but if I were faced with a choice of having to live at Fusion or in Village on Oak, I would pick Village, even though this location would add another 45 minutes to my already terrible work commute. It's big saving grace for me would be its proximity to the Farmers' Market, where we get probably 2/3rds of our food. If parents were faced with this choice, I would think the Torrance school district would be more desirable compared to the Hawthorne district.

Standard Pacific Homes also has some high density projects going on in Playa Vista and Marina Del Rey. I think I've caught a glimpse of some new houses overlooking some bluffs, visible from Lincoln Boulevard. Maybe that is the SP high end home project in Westchester.

It'll be interesting to see how the market holds up for the high-density housing, and how it holds up for the more upscale homes.

My poor significant other, who is normally a pure Libertarian, looked at the links for some of these Standard Pacific projects and then started ranting and raving about "market failure" and how the free market has no vision for what lies ahead. I have to agree with him. There is nothing green about these houses. The project in Marina Del Rey looks like the residents will be living in office suites, not homes. No solar power.

Our consumption problems have lead to energy supply problems and geopolitical problems and the average American home consumer seems relatively unconcerned.

Tuesday, February 05, 2008

Los Angeles County South Bay Beach Cities Real Estate $$$ Transacted for January 2008

I am so sorry to be late coming out with January dollar volume numbers. I spent the weekend leafletting 2 precincts in 90045 for Ron Paul, and Monday evening leafletting my own precinct in 90278. Then today, I was hit by a car while crossing a street in Westwood, by UCLA. I am OK, but with a stiff left leg that has a big bruise on the outer lower leg, below the knee, and a scraped-up right elbow. I need to go to bed and get some rest.

Anyway, back to the numbers. Quite a few graphs are showing bounces off of December bottoms. The bubble has burst, and seasonality trends that would normally show that bounce around February are now being affected. The stock market has not been happy lately either. It is not clear how much further the decline in the financial markets may go. In any event, people are in somewhat glum moods at the moment, but that may change as spring rolls around...

The zip codes that remained pretty much even from January 2007, in terms of dollar volume, are 90016 (West Adams), 90035 (Fairfax), and 90245 (El Segundo). Zip codes where dollar volume was up substantially from a year ago are 90007 (South Central), 90034 (Palms), 90064 (Rancho Park), 90094 (Playa Vista - remains on steroids), 90291 (Venice), 90402 (Santa Monica), 90501 (Torrance - Village on Oak and Parkview Court), 90504 (Torrance), and 90505 (Torrance). Every place else was down in dollar volume.

Some of these higher dollar volume areas look weird. For example, Venice in January 2007 shows 19 transactions averaging $1,058,000. January 2008 shows 11 transactions averaging $2,362,000. So in some areas showing a bounce, there are still high-end buyers pushing up the numbers. Or, there could be something else going on, which I don't have insider knowledge of.


YOY comparisons

Remember, the YOY numbers are not taken on the raw numbers, they are taken on the doubly smooth 3 month moving average. They lag the raw data somewhat.

Realtors fat and happy... 90094 163.7% Playa Vista Not to shabby, considering... 90254 8.6% Hermosa Beach 90501 4.4% Torrance 90045 2.8% Westchester Slip sliding away... 90293 -4.2% Playa del Rey 90064 -5.9% Rancho Park/Cheviot Hills 90401-90405 -20.8% Santa Monica combined 90036 -21.3% Park La Brea 90266 -22.3% Manhattan Beach beach cities -23.4% 4 Beach Cities combined 90245 -24.1% El Segundo 90291 -25.0% Venice 90008 -26.2% Baldwin Hills / Leimart Park 90277 -27.6% Redondo Beach (south) 90232 -28.8% Culver City Sliding over a cliff... 90066 -31.2% Mar Vista 90277-90278 -33.2% Redondo Beach combined 90034 -34.2% Palms 90278 -37.4% Redondo Beach (north) 90501-90505 -37.4% Torrance Combined 90292 -37.4% Marina del Rey 90505 -38.2% Torrance SW county -39.3% Southwest L.A. County 90504 -40.3% Torrance 90275 -44.2% Palos Verdes Estates 90717 -46.1% Lomita 90503 -46.2% Torrance 90019 -47.0% Country Club Park/Mid City 90732 -47.1% San Pedro/Rancho PV Over the cliff, Thelma and Louise-style... 90230 -51.0% Culver City 90007 -52.4% South Central 90035 -53.4% West Fairfax 90301 -54.6% Inglewood 90304 -55.4% Lennox 90056 -56.6% Ladera Heights 90043 -57.6% Hyde Park, Windsor Hills 90250 -62.0% Hawthorne 90746 -66.6% Carson 90047 -67.3% South Central 90301-90305 -68.0% Inglewood/Lennox combined 90062 -68.2% South Central 90016 -68.7% West Adams 90018 -68.9% Jefferson Park 90260 -69.5% Lawndale 90302 -70.2% Inglewood 90745 -71.5% Carson 90044 -72.3% Athens 90305 -73.7% Inglewood 90502 -74.5% Torrance 90249 -76.5% Gardena 90303 -77.5% Inglewood 90037 -79.9% South Central 90744 -288.0% Wilmington

Relative Strength

This is a longer-term view of the strength of dollar volume, for this month with 4.9 being the strongest (suffering the least amount of chronic pain) and -0.6 being the weakest (suffering the most chronic pain). Think of it is as the area above 0 on the YOY graph with the area below 0 of the YOY graph subtracted out.

90094         4.9 Playa Vista
90305         2.9 Inglewood
90044         1.8 Athens
90034         1.8 Palms
90746         1.6 Carson
90292         1.5 Marina del Rey
90047         1.1 South Central
90062         1.1 South Central
90301-90305   1.1 Inglewood/Lennox combined
90304         1.0 Lennox
90502         1.0 Torrance
90007         1.0 South Central
90018         0.9 Jefferson Park
90745         0.9 Carson
90303         0.9 Inglewood
90016         0.8 West Adams
90301         0.8 Inglewood
90302         0.8 Inglewood
90250         0.8 Hawthorne
90293         0.7 Playa del Rey
90732         0.7 San Pedro/Rancho PV
90037         0.7 South Central
90501         0.7 Torrance
90043         0.7 Hyde Park, Windsor Hills
90019         0.7 Country Club Park/Mid City
90008         0.6 Baldwin Hills / Leimart Park
SW county     0.6 Southwest L.A. County
90064         0.6 Rancho Park/Cheviot Hills
90503         0.5 Torrance
90230         0.5 Culver City
90249         0.5 Gardena
90254         0.5 Hermosa Beach
90291         0.5 Venice
90260         0.5 Lawndale
90045         0.5 Westchester
90036         0.4 Park La Brea
90501-90505   0.4 Torrance Combined
90278         0.4 Redondo Beach (north)
90232         0.4 Culver City
90245         0.4 El Segundo
90066         0.3 Mar Vista
90277-90278   0.3 Redondo Beach combined
90505         0.3 Torrance
90401-90405   0.2 Santa Monica combined
90036         0.2 West Fairfax
beach cities  0.2 4 Beach Cities combined
90056         0.2 Ladera Heights
90266         0.2 Manhattan Beach
90717         0.2 Lomita
90277         0.2 Redondo Beach (south)
90504         0.1 Torrance
90275         0.0 Palos Verdes Estates
90744        -0.6 Wilmington

Sunday, February 15, 2009

Beach Cities - a repeated warning

First of all, I hope you are a regular reader of Mr. Mortgage. I consider him one of the top reliable authorities on the state of the real estate market here in California. He is in the process of relocating his website so make sure you are on his email list if you aren't already. When his new website is up I will update the link I maintain in the sidebar.

Second, I have added a new link to the sidebar Mike Morgan: Behind Enemy Lines. I strongly suggest that you bookmark it and check it frequently. Mike Morgan is a Florida realtor. I consider the information he publishes as high quality as that of Mr. Mortgage or that of Karl Denninger of Market Ticker.

Change in how homebuyers perceive value

One opinion I have stated on this blog repeatedly (I am a bit of a nag about it) is that psychologically, what a homebuyer perceives as being valuable and worthwhile in a property changes between housing boom and housing bust. The amenities and features of a property that a homebuyer thought nothing of paying for in 2005 or 2006 can turn into liabilities during a downturn. Few upscale condo buyers were put off paying $200 a month or more in HOA fees while condo values were zooming up 20% or more a year. Maybe living in the McMansion with the running-water fountain in the front yard, the new kitchen granite countertops, and the energy wasted with all those tiny incandescent bulbs lighting the fortress was no big deal - the home was appreciating 20% a year, the 401k was doing OK, and the owner "felt" rich, so why not!?! In a downturn a market participant's idea of what constitutes good value will change. This change in perception can and will add further pressure to prices. Price levels are ultimately driven by psychology.

Social Unrest and the potential impact on property values

Read Mike Morgan's recent post on Turbo Tax Cheat Timmy in which he states that the United States "could see riots" this summer, and his post Obama Deal with Family A, B, and C in which he opines that what is going down in Washington right this minute is a "recipe for violence."

Another opinion I have stated a number of times in this blog is that an incredible backlash could accrue against those living ostentatious, consumptive, affluent lifestyles and now there are industry experts out there saying the same thing. IF such a backlash does erupt and manifest itself as violence in the area, then by logical extension that backlash will eventually reach out and adversely impact the beach cities. I cannot reach any other conclusion.

My September 10, 2007 post Stage being set for social unrest may be worth reviewing. If we are truly headed on this path toward civil unrest, then I sure as heck don't want to snap up a bubbleminium at 40% off the peak price this spring thinking I got a "bargain." Ideally I would want to be as far away as possible from such properties and continue looking like just another poor slob sitting on the bus on my way to work.


On a lighter note, today I took these photos of the Foundry in Torrance. I moved the camera from west to east. On the far left of the second picture you can see the Parkview Court project, and in the background of the last photo you can see the back of the Village on Oak project. I am glad I periodically rant and rave about social armageddon coming our way, because it continually forces me to reconsider what these sparkling new construction projects are really worth.

Saturday, December 15, 2007

more on the Ruxton Lane Developments

I managed to stop by the 27-unit development on Ruxton Lane today before the open house and snuck in to one unit. Although the realtor was not in sight, he had left a music player on amidst cases of sodas and party food, and we glanced around one new unit to the tunes of Led Zeppelin.

We did a more thorough look of the unit next door. For the money, I think this is a far better, more practical layout than the Bayberry plan in the Village on Oak, which as far as I know is sold out. But the prices are still astronomical.

I did accomplish what I set out to do - get a price sheet. Square footage ranges from 1903 to 2144, and asking prices range from $749,000 to $810,000. Out of 27 properties, it looks like three were pre-sold at 1720. I've added all the properties in to my database.

As we were leaving, we greeted the realtor as he was hauling in some bags of ice.

There is a 192-unit relatively new pack-em-in senior condo development just up the street from these condos. This pseudo-panoramic photo is of the senior condos, on the north end of Ruxton. Apparently Ruxton has been the target of a revitalization project, and the site of the senior condos was once a plastics factory. I don't know anything about the prices. I don't have anything to say about them except that they look as institutional as Fusion or most of the other pack-em-in style housing projects in the area.

Saturday, February 21, 2009

Standard Pacific's Foundry Open House

We went and took a model tour of The Foundry at 10 AM today and I thought I'd share my impressions.

First of all, between these units and whatever is planned at 360 South Bay, the Foundry stands an infinitely better chance of succeeding. Standard Pacific's Foundry is targeted to a demographic in a way very similar to the way West Millenium's Parkview Court was targeted - to older (maybe wealthy) retired Asians who would view the close proximity to the local Korean Presbyterian church, Wilson Park, and the Farmers Market as hugely desirable amenities. In addition, open house is coming at the best time of the year, on the eve of spring buying season. I don't like condo marketing brochures that use the word "cool" and unfortunately, The Foundry's marketing brochure contains it, but in spite of that, there is a demographic in place that may enable the project to succeed in spite of itself. 360 at South Bay, on the other hand, has been trying to pass itself off as Manhattan Beach property or El Segundo property (along with ridiculously steep prices) when in fact it is in Hawthorne - this is a disaster brewing unless the builder greatly overhauls its plans.

Anyway, back to the 10 AM Foundry open house. There was a modest group of people right there at opening time, mainly of Asian background, ready to take the tour. I observed a mix of some young adult singles, some young couples with small children, some older people.

My significant other said that when you walk around outside the units in the hallways it "feels like a hotel." We checked the lighting fixtures and were relieved to see that at least there were compact florescent bulbs in them. (Someday maybe I'll tell you the story about how we had to persuade our condo association to use them in order to cut our electric bill - this was back in the early 90's.)

There are eight plans: A, A with mezzanine, B, B with mezzanine, C, C with mezzanine, D, and D with mezzanine. The mezzanine units have high ceilings and a tight spiral staircase leading up to a loft. The realtor thought there were 7 A-mezzanine, 1 C-mezzanine, and 2 D-mezzanine units (I don't recall B-mezzanine). The C and D-based plans have office space. In some of the units (I think it was model C), the office can be closed off with sliding glass shoji-screen style doors. I don't recall if the offices in model D could be closed off that way. Model D units come with 2 decks, the remaining have one deck.

The mezzanine units generally have more light, but the lofts above didn't particularly impress me. The extra light was probably due to the higher ceilings and extra window space. Generally I tend to be rather suspicious of high ceilings due to the potential for wasting energy on heating up space I don't really use.

Overall, these are efficiency units, which are not necessarily bad if you are an older retired lady, gent, or maybe an older retired couple living alone. I've lived in a few apartments not much smaller than that of plan A. There isn't a lot of space in the living room for, say, working out, and the place doesn't come with a gym room (though there is a lap pool). I do like how in the master bathrooms the toilets are separated off from the rest of the bathroom behind a closed door. All homes have 2 bedrooms and 2 baths and come with Whirlpool appliances. And some of the units do get views of the courtyard or the Farmers Market area or even Palos Verdes - something besides the roof on top of Parkview Court.

The other day I griped about $200 a month HOA fees as being steep. Well, expect to pay $317 to $363 a month to do the gardening around this place, maintain the elevators, change the occasional lightbulb, sweep the hallways (there's LOTS of hallway space here, virtually all of it not in front of your unit!), and maybe clean the pool.

The realtor giving us the tour did mention tax credits but also mentioned that there are some caveats to the credit - that you have to live in the place a certain amount of time, etc, to avoid having to pay back the credit. And Standard Pacific has gone out of its way to discourage speculation - a buyer must sign contracts agreeing to live in the unit at least two years initially. They are encouraging the building of a community, she said.

What blew my mind is that she also mentioned how Village on Oak, a juxtaposed Standard Pacific project, is planning to build the Laurel division in 2010 and 2011. Yes, Standard Pacific is still planning to build more units!

The Foundry signage outside says "From the high $400,000's" but the pricing information given to me, hot off the press, was as follows.

Feature      A      A       B       B       C       C        D       D 
w/mezz w/mezz w/mezz w/mezz
Sqft 1096 1243 1290 1462 1469+ 1619 1517 1681
Price $379K $432K $412.5K $472.6K $445.1K $490.9K $465.1K $542.3K

So they shaved a tiny bit off the low-end asking price.

I sensed substantial interest from my fellow tourists. One lady sounded disappointed that nobody would be allowed to move in until after May 1.

Overall, I left feeling slightly underwhelmed. Though I doubt there will be bidding wars, the units will probably sell over time. (We noticed when we left an hour later that the crowd of tourists had thinned out substantially after that initial 10 AM rush. When we toured Village on Oak Acacia and Bayberry a few years back, there was a more consistent trickle.) The major problem is price. You know how I feel about price levels here in So Cal so I won't go there. Then there is the steep HOA fee for stuff that doesn't affect you. Then there is the density. There are 86 attached homes. When I am renting a relatively cheap apartment I can accept living like an ant in an anthill, but I wouldn't want to be on the dock for something in the neighborhood of half a megabuck for that privilege, even though we go to that Farmers Market across the street every Saturday morning. But not everyone feels that way. To each his own.

Dogmation