[quote author="frebay" date=1218639091]was at crystal cove and seapoint over the weekend and talked to the sales office. they said they will not lower the price or offer incentives. is this true?
also sea point told me they have a huge waiting list for ocean view lots that are coming up.</blockquote>
I suspect it relates to <a href="http://www.irvinehousingblog.com/forums/viewthread/1314/#58802">this blast from the past</a> from Bkshopr:
<blockquote>Branding is important. It is to the best interest for the company to keep the existing customers who bought the brands to know that the products that they currently own is not a depreciating asset. Women have used this excuse for buying Cartier jewelry for years. This is the strategy for Cartier, LV, Hermes, and Tiffany. These companies would shred and destroy their products than to minimize their losses by having sale in keeping up its top brand image. One sale can ruined a company image that took a hundred years to build.
Another example is high class call girl that started her career in the New York penthouse but during the tough time resorted to the street alley tricks and she will never recover to her her glorious days. VOC is another example and I do not say much more.
TIC?s strategy is no different and aligns with the branding strategy. Buyers will get desperate eventually. I do not expect to see dramatic price decrease by 2011-2012 for TIC products. For those who will be seeking $250/sf or even $350/sf you will be extremely disappointed for having waited to get a bargain in OH or LCX.
Just like all of you I am guessing but I have the knowledge of previous decade of pricing strategies and data to draw from. Just like many other companies of good brands preservation of image during the tough time is more prudent than minimizing the losses and destroying the confidence their loyal patrons.
TIC should really thank me for polishing its brand.
Hope this will make sense for you. ?The virtue of patience=gold? =Confucius= Awgee </blockquote>
Or <a href="http://www.irvinehousingblog.com/forums/viewthread/626/#8916">this older post</a>:
<blockquote>Branding is really important to TIC. From a psychological point of view lowering prices immediately and repeatedly could hurt the image of the brand. I would like to use retail as an example. The high end and very exclusive handbags are Hermes, Louis Vuitton and Channel. The companies will shred the remaining inventories before considering a ?sale?. Consumer will travel thousand of miles across the continents to acquire these bags at regular price. I have seen a rare 5% invitation sale and the women were balling over the saving.
Consumers purchase goods from the higher end store such as Saks and Neiman because they know the items purchased there will not lose value next week due to sales. I remembered the BK Robinson May trashed its brand and lost its dedicated clienteles. At any given time there were sale and additional savings before noontime and newspaper coupons to save even more. This tactic may be effective for the immediate situation but could harm the brand in the long run.
Cosmetic is another product that never goes on sale. Companies will offer incredible gifts and free tote bags instead. Preservation of brand is really important for the long run for reputable companies.
IMO TIC will offer gift incentives and attractive upgrades for individual buyers who have good negotiation skills. The policy is not published and is discretionary for some buyers who feel that they are getting something that no one else got. The feeling of ?special? and ?exclusive? in finding a good deal is one of the techniques in offering a product without depreciating the value of a brand.
What took place in the Inland Empire is a good example but an unfortunate one. All builders slashed prices and existing home owners did not have the faith believing in the homes holding value when price of new homes dropped so quickly and willingly. IMO some were still capable in paying the adjusted mortgage but just lost faith in the ?Empire? brand.
Land price in Irvine has always been much higher than other part of inland OC and even the postage stamp lot for the condo is valued way more than the big detached lots else where in flat land OC. That is why condos in Irvine cost more than a single family in Costa Mesa.
The early suburbs of OC were designed to lure home shoppers away from Los Angeles. The newly opened Disneyland in 1956 was the main draw and attracted folks who desired single story living, more elbow room between neighbors and a homogenous neighborhood that all houses blended together. The idea of a cal de sac was first employed and shoppers thought that was the neatest thing where Timmy could skateboard in a circle all day long and mom never had to worry about cars passing through the neighborhood running over Timmy. The kidney shape pool was a big draw also. Many LA homes except for the big estates could not fit a pool due to the detached garage that occupied a big portion of a backyard so home owners flocked to OC for bigger lots.
Many communities like Stanton, Cypress, Garden Grove, Buena Park, Anaheim, Fountain Valley, Westminster and Costa Mesa were designed with minimal community amenities no landscape parkway, no community pools, no pocket parks, no monument walls, and repetition of street patterns and endless cal de sacs. Affordability was the target. These communities except for just a few matured quickly into suburbia ghettos. Good community design hold real estates value and pride of home ownership like Irvine. Santa Ana on the other hand was never developed as affordable community but during the urban renewal during the 50?s and 60?s all the politicians in Downtown encouraged zoning for high density affordable apartments and allowed many destruction of old mansions to made way for a progressive urban city. The aftermath is clear and it was a mistake.
60x100 sf lot is similar to Stan Pac?s Mille Fleur and Laing?s Juliet balcony lot sizes. Both are in Woodbury. As I recalled they are about 1.3 millions. These lots plotted at about 7 units per acre if plotted efficiently. That is about $642,800 per lot. FAR (floor Area Ratio should be at least 60%) footage proposed on this lot size should also be 3,600 sf . $178/sf is the land cost. $120/sf is the construction cost of this move up McMansion. Most site improvements such as storm drain and utilities are included on delivered TIC lots so the cost is minimized at $12/sf. Overhead is about $20/ and the grand total is $330/sf or 1.188 million at cost. With a selling price of 1.3 million the profit per house is net $112,000. That is 7.1 million dollars pure profit for a total of 80 homes (1.3 million selling price x 80 homes =104 million). 7.1 millions pure profit / 104 millions sales revenue = 6.8 percents profit.
Irvine 123 you are right. Unless TIC reduces price dramatically the equation will not reach $300/sf when it is already at $330/SF AT COST!.
Another way is to pump up the house sf on the same 6,000sf lot to 5,000sf then the value ratio will drop to $280/sf. We actually see this scenario a lot.
TIC owns all the land free and clear. I see all kind of construction activities in its apartment, office, retail, and hotel groups. 3 high rises are being built at the Spectrum and the most expensive destination resort is about to finish at Pelican, A landmark tower designed by I.M. Pei is starting in Downtown San Diego. I believe the energy is shifted from residential to other active TIC entities. I think TIC immediately will release its best land parcels at the best locations. Buyers know there is only a limited inventory of jewel locations left with topography and view potential. They will have to seriously make quick decision regarding the last remaining crown jewel sites. Laguna Crossing, gateway to Laguna Beach, and only 3 minutes from the Spectrum and Orchard Hills with immediate city lights, distant ocean and Catalina view. TIC will entice the buyers by offering the best locations during the buyers market hoping to spin the pendulum back to the seller control. This psychology may work. From what I heard, the products at Laguna Crossing will be amazing. Homes at 2,100 sf with 3 parking spaces will include 5 bedrooms and even a granny studio over a detached garage at the back of the property with its separate outside stairs. That is a lot to pack carefully into a 2,100 sf house.
Meanwhile waiting for the sluggish market to pass I think there are many TIC communities are being secretly designed under the radar and using this down time to process legal matters and entitlements. As the market turn around the full arsenal will be ready to accept the buyers? hard earned cash and all the flippers will be coming out of their Bin Laden style caves.</blockquote>
