Honest and ruthless; I can do that. Lennar and its equity partner want out of this disaster, and they would take the hungry and homeless — if they qualified for a loan. For years, we have stared with wonder, “What fools will buy there?” and live in the warmth of silent defeat like those in the North Korea Towers. We are about to find out because Astoria Central Park West is opening for tours and sales.
I first profiled Astoria Central Park West on April 4, 2009. In that post, I noted, “… Astoria at Central Park West is a clear loser — (for) the ownership entity that developed this property (Lennar has only a small investment). None of these units sold at the peak, and now that we are nearing a long, flat bottom, these units are hitting the market. The early buyers will be knife catchers, but in a couple of years, some of these units will be good buys — at about $300,000 to $350,000.” The properties for sale now are floors 7-10 which should carry a premium to the lower floors. I wonder how many of the 3rd floor units they sold for $519,000? I wonder how those owners feel about the new and lower prices? Perhaps I will ask again when they sell floors 11-15….
With this profile, the grand opening gets much more exposure than it received through the concerted efforts of its marketing department. No other resource reaches thousands of people specifically interested in Irvine real estate, but they do have to give up control of the message. If an extra hundred or more people attend due to this post, do you think they will thank me? I won’t hold my breath.
Irvine Home Address … 401 Rockefeller, Irvine, CA 92612
Resale Home Price … $400,000+?
Income Requirement ……. $83,296
Downpayment Needed … $14,000
3.5% Down FHA Financing
Home Purchase Price … $750,000
Home Purchase Date …. 7/1/2006
Net Gain (Loss) ………. $(374,000)
Percent Change ………. -46.7%
Annual Appreciation … -16.4%
I don’t know what the actual asking prices are on these units as the liquidators sellers have been careful not to publish detailed information that might discourage people from attending. The numbers I have used above are based on their website as well as rumor and speculation, and they could be very wrong.
I heard through various industry sources that Lennar had projected an average price point of around $750,000 for these units. As I have pointed out on numerous occasions with the North Korea Towers (Marquee at Park Place), cashflow valuations support about half of 2006 price levels. The North Korea Towers are likely worse due to the extremely high HOA dues, but then again, prices there have not hit bottom yet. I don’t know what the HOA dues are at Astoria Central Park West, but they will likely be quite high too.
Current bids from all-cash or heavy-cash buyers at the North Korea towers are in the $350,000 to $400,000 range. Of course, none of those transact because lenders are unwilling to take the $500,000+ write-offs necessary to exit the building. Someone yelled fire (probably me), and lenders decided to stay and burn. The asking prices for the Astoria units are starting in the low $400,000s, and I would not be surprised if Lennar seduces some of the bidders from the North Korea Towers who may be enamored with the Park Place, but are tired of waiting for short-sale approval.
All Sizzle, No Meat
The website for Astoria Central Park West is slick and beautiful, but it contains almost no useful information.
If you click on the plans tab, you are shown a floor-by-floor overview of the units, but unit detail is completely absent. It is like looking at a subdivision map without the house floorplans; few care about the arrangement of units, but many would like to know how these units lay out. Putting the overview without the unit detail frustrates a potential buyer looking for information.
The features tab contains the obligatory picture of a barefoot couple lovingly enjoying their shoebox. I appreciate evocative words, but “sophisticated bathrooms?” Bathrooms don’t seem like something that can be sophisticated. Sophisticated: 1 (of a person, ideas, tastes, manners, etc.) altered by education, experience, etc., so as to be worldly-wise; not naive ; 5 of, for, or reflecting educated taste, knowledgeable use, etc. Do sophisticated people in their sophisticated bathrooms have sophisticated bowel movements?–I assume it smells great, right?
If you never noticed all the bare feet in new home ads, you will now (sorry). Some marketing consultant long ago noticed that bare feet suggests the comforts and coziness of home. Doesn’t the couple in the picture look like they have the life all of us want?
The sizzle on the website is real; the photo gallery shows many spectacular pictures of first-rate photography. IMO, they made a mistake by putting the inside unit pictures below the scroll line where most won’t see them, but the photos themselves are marvelous.
The financing tab had an interesting surprise:
Builders often buy-down the interest rate to artificially lower the payments for early years. Personally, I think the practice is egregious differing in no way from the subprime 2/28 programs that proved so disastrous. Lennar and their partner obviously do not care about the long-term viability of ownership of buyers; any who use their advertised financing will not be living there 7 years from now. The the builder bought down the interest rate on an ARM which is taken out at the bottom of the interest rate cycle; this interest rate is going to rise, and it is going to make future payments unaffordable. I suppose these will appreciate so much over the next 7 years that it won’t matter, right? Bubble thinking is not dead.
While we are on the subject of financing, I want to share a recent email I received. The subject was, “WE CAN SAVE YOUR DEAL”
I can honestly say that if an IHB client needed a 60% DTI to complete a deal that I would strongly advise them to pass rather than commit to a lifetime of debt servitude or near-certain foreclosure. As long as these lending practices persist, lenders will continue to lose money, and we will continue to have inflated, unmoving prices.
Astoria Central Park West
From 6 to 9 PM Astoria Central Park West is featuring wine tasting, cocktails, hors d’oeuvres, desserts and gift bags as well as tours of model units. I may see you there, but you won’t notice me in disguise.