Two guys built expensive spec houses down the road from me, at exactly the wrong time, and the market has bit them, hard, in doing its freefall.
Both had list prices of around $1.25 mil just five months ago, and both had been on the market for over a year back then.
Finally, just this week, both have deals, and the numbers are down in the very low 900s. The word on the street is that the builders lost money.
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That's one heck of a pricey spec house. I would think they would have sat on the lot until a buyer for a custom home came along.
I can't imagine being in their shoes.
[email protected]
There are spec houses here priced at almost twice what these listed for.
These two that sold, plus the others, were started well before there was an inkling of a housing credit meltdown, and what it could do to the market.
down the street from me they built a 1.5 million spec plus 3 600.000 homes, I would think one would build one then wait till it sells before you start the next one, Also if someones buying something over a million they might want what they want, They have a for sale sign on it meanwhile the guy on the lot next door brings in a manufactured home
Guy here did a $2.5M spec and put it on the market early fall IIRC. I figured he was going to bite that one hard. He sold it in the past month for $2.3M. My question is, does that $200,000 not gotten represent his profit... did he work for free...?
My quess is the guy had well over $500K profit (at 2.5M he'd better had), so the $200K drop, while substantial, did not take food away from his table.
A friend had a $2.8M spec on the market for 1.5 years - few months ago, he received 2 contracts on it - both within 3 days of each other. The guy who wound up buying it came in second and once he was told there was another contract on the table, he offered full asking price... Cash deal, closed in 2 weeks :)
We currently have 2 specs - 1 finished and 1 almost ready for paint... I signed a contract earlier today on the finished one - $770K. Hopefully it won't fall through...
What market are you in Stan?
Sounds like a little is happening out there!
You can click on your name (StanG) in one of the threads, see your profile and ammend it if you want
I'm in SW Chicagoland... Here's the pic of the house:
http://www.standarek.com/photos/76_front.jpg
Edited 12/22/2007 3:15 pm ET by StanG
That house wouldn't happen to be in the Plainfield/Bolingbrook/Joliet area would it. The design (not the brick/stone accents) looks like some of the monster homes that I've driven past.Come & trim myyy Christmas treeee with some Marvin windows, I need seven, please.
Close.... Lemont :)
A maniac near me built a spec a year ago right on the ocean (osterville, Ma) and is asking $15,000,000. Still waiting for offers...
Funny, that house would sit on the market for a real long time around here. Just a different market, thats all. It looks nice, just not what the market is looking for.
What - if anything - is selling in your area?
I'm going to guess: foreclosures. Bob's next test date: 12/10/07
That's probably as good of a guess as I'm boing to get :)
Stan, is the Lamont area still strong enough for you to do more spec ventures, even now?
I recall seeing your work here before, at Breaktime. Still looking good. You are a "paper" GC, correct? No real payroll yourself, and sub about 100 percent?
How do you find the pricing and competitiveness of the subcontractors, right now?
Actually, we're not 100% paper. We (myself and my partner) have couple guys and we do ALL finish work - starting from hardwood installation, tile, trim, and occasional paint (depending on other workload).
Our area, imo, was never too hot, so the drop off is not that substantial. We could obviously build more, but I don't feel comfortable holding that much inventory - in the worst case we will dump our current houses and move into the specs.
Pricing? As always, the good guys are still busy (at least when we need them to work on our project, lol), so no real deals there. Of course we get calls from guys looking for work all the time, so I'm pretty sure we could get the subs to lower their prices if needed, but at this time, I'm still in the "giving" mood :)
The area is so spread out that it is incredibly variable.
Low end townhomes are selling in the marginal areas pretty well.
High end in every local market pretty much stinks.
We have probably 10+ mini-markets that revolve around the school districts. The value product is selling in each of those markets. Not fast, but if you have a $500K house around $600K houses, it will move, and a $1.3K house around 1.7K houses moves. They can be smaller and have fewer features, but gotta scream value!
Renovations are selling also, thank goodness. Thats putting the food on the table right now!
Depends on the builder and how well he managed his money, what he paid for the land, etc.
In Philly area of Pa, a 2.5M spec in the good market would profit 4-500K. Now, not so much. He probably made some money, but like quite a few builders, spent all the profits on new cars, quads, boats, booze, strip clubs, etc. more land before it was in his pockets.
Market is ugly, but gotta plow ahead, come what may.
I couldn't imagine someone with the stones to put up a spec house over 200k right now in my area.
Last house I framed for one builder has been sitting over a year and a half empty with a tag of 260k.
Houses aren't moving here and they are not being built either.
I could see a cuistom being built for that but not a spec, job already been sold before a hole is even dug.
Woods favorite carpenter
FKA- Stilletto
A $2.2 million spec house I framed at the end of the summer just sold for 2.5 million about a week ago. They bought the house and then ordered about another 300K of work from the builder. Gotta have either deep pockets, big stones, or no brains to play in this market.
Built a spec for a client which finished in April. Tore down the house on a $900,000 1/2 acre property and spent $1.4 mil on the new house. It sold in May for $3.4 mil.
The sales are way down but the median price is up. The little POS houses around here that used to sell for $800,000 are languishing on the market in the $650,000 range while the upper end goes ever higher.
We just had a $65mil estate sell. Highest ever in Cali.
Kurt
Do you mean "for a client," as in, "the client was the investor?"
Or did you front the cost of the whole shebang at $2.3 mil?
'Cause if you did, why are you looking for a free deal on cab software? You can probably dial up Thermwood and put $250K worth of CNC router system on your credit card.
For a client. My credit card is maxed.
"The little POS houses around here that used to sell for $800,000 are languishing on the market in the $650,000 range while the upper end goes ever higher."
what a market that must be,i'm not sure of your def. of pos. but if you told me you wanted to spend a 100k here, you could find 75 pretty nice 3 bedroom brick homes here. at 50 k there is probably 200 pos,1920's,need remodeled even though when your done it's still a pos.
someday for vacation i'm coming out there and look at re,to heck with disney it wouldn't be as entertaining. larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
A POS around here is a 2 bedroom 1 bath built in 1948 with machine grooved cedar shingles that are painted to look like asbestos shingles on a postage stamp lot on the shady side of a hill. The kitchen is usually '80s melamine cabinets and the house is heated by a single wall heater in the "hall".
A POS around here is a 2 bedroom 1 bath built in 1948 with machine grooved cedar shingles that are painted to look like asbestos shingles on a postage stamp lot on the shady side of a hill. The kitchen is usually '80s melamine cabinets and the house is heated by a single wall heater in the "hall
Where is HERE ?
Just sold a fixer in Costa Mesa CA for $519,000 - a big drop from what it would have brought a year ago. But still a good deal for the buyer and I'm happy to be out of it.
Here in Utah where I live that would buy a good size McMansion with at least a dozen valleys and a bunch of dormers to leak in a few years. Some of that gen-uwine fake rock on the front too.
Joe H