Thursday, January 17, 2008

A Cadillac Price for a Chevy Home

With the pricing Bob has mentioned for units at Ponte Vista, it appears that he can't build a development for under $550 a square foot.

The average square foot price of houses that sold in the R.P.V. area of Eastview over the last quarter was $457.30 per square foot. That was also the average price of homes one year ago and again in mid 2004 and 2005.

You probably know that most of these homes were single-family homes on R1 sized lots, which is the majority of housing in that part of The Hill.

For Bob to consider that he wishes to charge what he wants for 1,950 condominiums seems to me and many others that he is seeking Cadillac prices but offering Chevrolets. If the units he wants to build are of such type and quality to command those high prices, I would suspect that the prices would be too much for many "first time home buyers" to pay.

There have been a number of comments that have come from sources that seem to know what they are talking about that suggest very strongly that Bob could price his units at up to $375 per square foot and still come out with a handsome profit, not that we should really care if Bob makes a profit or not.

I was always under the impression that if you bought in bulk, the price would be lower per unit.
Where have I gone wrong in considering that the costs for building Ponte Vista with 1,950 units would be lower, for example only, than the costs of building 1,950 SFRs on R1 lots.

I have toured the exterior area of the apartment complex Bob is modeling Ponte Vista on. I have toured the inside of several units of condominiums at Playa Vista. The interiors appeared to have upgraded appliances and furnishings, but the exteriors of Newport Bluffs are all similar in style, color, and adornments. Is it wrong to consider that common exteriors would be less expensive to build than dissimilar exteriors that are found at Playa Vista? Is it wrong to consider that even purchasing upgraded appliances in bulk numbers would be more costly than purchasing individual items?

Many of us still can't see why and how Bob is considering that he should charge anywhere near $550 per square foot for units of condominiums.

Even if he is allowed to only build per R1 zoning, I think it is possible to imagine he would still get a break on purchasing prices because he would be buying in bulk numbers for items, services, and things at Ponte Vista.

I could imagine that IF he could only build with R1 zoning, he probably would have to consider $550 per square foot for each unit, because he paid so darn much for the property in the first place.

If folks really want to buy units at Ponte Vista and are charged anywhere near $550 per square foot, when so many supposedly knowledgeable persons strongly suggest that Bob could make a profit at $375 per square foot, then we must agree that the adage, "buyer beware" would apply for condominiums at Ponte Vista.

If there really are supporters who are willing to pay, possibly, a $175 per square foot premium, plus HOA dues and fees for a unit at Ponte Vista, maybe they should speak out louder and more often about their wish to have this weapon of mass development built.

Could it be that those supporters feel that $375 per square foot should be the real pricing?
Or could it be that the more folks learn and know about the proposed development, the less they like it?

1 comment:

Jim said...

As sucessful and wealthy as Bob appears to be, I don't think he is as smart as he thinks he is.

Who would pay $400,000 plus for a 800 sq ft condo in San Pedro? Nobody would. Very few people in town are for 1950 condos. The only people for it are for it for financial gain.

Bob never had a clue about the people he was going to be dealing with in this comunity. Maybe he should have spent a little less on the land, and a little more on research on the area he wanted to cram a oversized, overpriced development into.

With the real estate market crashing, condos tend to lose more value than single family houses. I could care less if Bob makes profit or not, but even with a slow market and lower prices, he could still make a profit with a QUALITY,low density R-1 project that everyone would welcome.