SunCal Cos. has announced that it halted sales at its water-view Marblehead Coastal project, where 308 homes and a 640,000-square-foot shopping center are planned.
The sales center located on the 248-acre site has closed. And SunCal’s modified work schedule is limited mainly to building facilities needed for public health and safety and to provide access. SunCal had been facing a lawsuit by the city for halting some of the infrastructure development work. And the developer of the adjacent mall had been pressuring the company to resume work on a bridge linking the retail center to access roads.
But SunCal says home development has paused until the real estate market recovers.
“It was decided because of the way the market is, there’s no sense in keeping (the sales center) open,” said SunCal spokesman David Soyka. “This is the last remaining piece in that coastal area. We’re not going to accelerate anything because we think the value of that land is worth more than it is today.”
Soyka said it’s anybody’s guess when Marblehead development again will kick into high gear — but not until the market “normalizes.”
Other ocean-close real estate news …
- Actor Nick Cage’s Newport home goes for record $35 million
- Newport mansion will now cost you $77 million
- Emerald Bay home listed for $44.5 million
- Newport Beach bayfront mansion listed for $38.5 million
- O.C. beach homes hardest hit by slump in June
- Huntington/Seal Beach ranked O.C.’s top housing market
- … and in Florida, a U.S. record $95 million price for a mansion
Idiots. Far better to sell for near-bubble prices now than non-bubble prices in a “normal” market.
Beachside communities keeping their value? Down, Down Down the values go, NOBODY is immune. When do you think these lots will be back on the market, 2015? lol
Smart developer there. If they do not need the capital, wait it out.
Hooverville,
You are ALWAYS wrong. So if you think this developer is smart then it stands to reason that they are not smart. In fact, they are probably pretty dumb.
No doubt. Look at that piece of land! They know what they have. Watch this development for your recovery. When this starts up again it will be a good sign.
HB-
I agree. What an incredible piece of land!
They are smart to wait. I’m so sorry I’m not one of the owners of this piece of prime real estate.
Too bad they had to destroy the natural landscape before coming to this decision! It’s been a huge eyesore for the last year– and now we get to look at it indefinitely.!
………. calling them smart is ridiculous………
…….. what choice do they have?…………. duh, lets see guys, let’s build up some million dollar homes people won’t be able to get financing for…………
………. but calling them smart is especially ridiculous when they are making comments like this:
“we think the value of that land is worth more than it is today”
say what?, run that by me again…..?
This land was beautiful before. It should have never been touched
Marblehead is a dumb name too
They do need the capital. The company is going broke and it owes millions all over the place.
As the article states they dont have the money to put in the infrastructure. Meaning they can afford to build the streets that lead to the houses they wish to sell. No streets no sales.
They have spread themselves way to thin….wait for them to begin selling off Master communities in the near future.
Bottome line, they bought on margin and overpaid for a lot of land that is now worth far less. They like the banks and all those losing their homes fell for the hype and are now losing their shirts.
SunCal is soooooo smart………
They’ve had two projects repossessed in the last 12 months.
Soon to be three.
Haha, so much for ocean pos in the OC being immune. They will get hit last and hard, and then you can talk about a bottom in the market, Not a moment sooner. Everyone gets hits, everyone. Ocean homes residents just have a little more resources to hold out for the a price that ” it is worth”. It started with the ghettos saying the same thing, and moving up the food chain. Sooner or later beach communities will break and fall hard. Just look at the sales numbers. That is a leading indicator to where prices are heading, and every single time, some idiot in some community that had imploding sales numbers bragged about how they were going to be immune because prices were holding up, and then, bang, the little break, and the flood begun.
The OC’s Biblical housing implosion continues and coming to an ‘ immune’ community near you………………………….
That’s just a another stunning example of how far this has gone…why aren’t the selling homes before they are even built? Why aren’t there lines of people, camping on the street for weeks just at chance for a lottery spot? Remember those ridiculous good ole’ days? Now, people may be camping on the street for entirely different reasons. SunCal can Eat it just like the rest of them.
Soyka said it’s anybody’s guess when Marblehead development again will kick into high gear — but not until the market “normalizes.”
Reality calling David Soyka…helloooo…the market is “normalizing” as we speak…time to find a new job.
Yo libtard: if they pushed it through “no matter what”…now that would bve stupid. Just as the seller that does not NEED to sell today, developers and builders are making those same decisions on a much grander scale. That too much for your little Berkeley mindset?
BW - Looks like the HH has already sold. Last 6-months comps were well over the bank listing. That 2nd listing is a 1 bd condo - the HOA are most likely out of sight so the $200k sounds about right to me, but I bet it goes for closer to $300k than $200k.
hey gilligan……… i think it’s a great idea to buy a home that doesn’t currently exist….. from a developer that may or may not exist…….. on land that has a greater value than it’s worth today……
……… but first let me go deposit $200K in FDIC insured washington mutual……. i’ll be right back…..
……… in the mean time…….. keep up your slow burn on your 280 GRM “investment”……… the banks will be sad if you mail in the keys……..
……….. when people are in a hole…… they don’t NEED to keep digging….. but sometimes they do anyway………..
Another prime example of chasing the market down. How can anyone call them smart when they would receive more by selling now than next year or the year after. Delusional is a more accurate description. As everyone has now come to realize, peak bubble pricing was never an accurate measure of worth.
Hooverville,
you are so smart, you know everything. You are just one of those people that has ALL the answers. Funny, how the people with all the answers really are just covering up for their own ignorance.
Obviously, by the number of your know-it-all posts, you don’t have a job… but you know everything. You bought at the top of the biggest housing bubble in the history of our nation…but you know everything. You probably dropped out of college to take a realtor job because of the stability it offers…but you know everything.
Libtard:
College degree: check
Sold all ENE options at $63: check
Sold 3 properties in 2006: check
R.A.T. drinking the kool-aid: what do you think?
When you come down from the tree stand, we’ll chat.
Mulligan,
You disappoint.
For a short while there I felt you might be slowly acquiescing — that you had some integrity and might be an alright guy.
The best you could do now is to admit you may have gotten carried away in the heat of the argument and didn’t really think about what you posted.
You will find many here willing to accept an apology for a momentary lapse, as none of us is beyond getting carried away.
Please don’t fall into the t roll hole. It’s deep. It’s dark. And you’ll never get out.
pdu: you will notice that the vast majority of the time, I fire the second shot. There have been times when I lead out…but they are rare. Besides, it is quite fitting when the handle is R.A.T. and I have been given another gloss, a little response in kind. pdu: if you are going to crack on me for that, better get busy with rants…which I do not think you will do.
Hooverville,
You are such a liar. You are unemployed and don’t have a pot to piss in. That’s why this blog is your life.
SunCal is toast. And yet Disneyland is still in business and still actively contributing to the community with 20,000 jobs and countless smiles. I honestly wonder if Anaheim City Councilwoman Lorri Galloway has realized yet what a buffoon and fool she was for hitching her wagon to SunCal and taking on Disneyland USA.
So, SunCal is circling the drain and will soon be selling their oceanfront property for pennies on their dollar. Buh-bye SunCal.
Next Up?! It’s those pompous dorks at Nexux Companies who are finishing up the Skyline twin towers; 25 stories of luxury condos overlooking the 55 Freeway without a buyer in sight. They shut down their sales center last fall saying they would reopen it in the spring “when conditions improved”. It’s now late July and the sales center is still closed and the towers are creeping towards completion. Buh-bye Nexus Companies.
Then there’s the Astoria towers of luxury condos overlooking the mothballed Central Park West midrise condos. Astoria still keeps its sales center open with a skeleton crew of botoxed sales hostesses playing Sudoku by themselves in the model home. But really, how long can they keep that charade up? 3 months? 4 months?
Those four high rise towers in Irvine and Costa Mesa will stand as a living monument to just how idiotic the Great OC Housing Bubble of 2001-07 was.
Mulliganville Says:
July 22nd, 2008 at 6:36 pm
Smart developer there. If they do not need the capital, wait it out.
no_vaseline Says:
July 22nd, 2008 at 8:05 pm
SunCal is soooooo smart………
They’ve had two projects repossessed in the last 12 months.
Soon to be three.
It was three projects already in OC. Two in Tustin and one in Santa Ana. If you include the $250mil they left Lehman Bros on the hook for in Bakersfield, then it would be four.
They have left lenders on the hook for over half a billion dollars in just the last few months. They can’t pay their sub-contractors, and have 1000s of liens filed against them. They need capital so badly that the next step will be BK.
Gilligan just proves his ignorance with his comments. Seriously, it is kinda sad, just when you have some hope that he sees reality, he says something that makes him appear to have his head deep in the sand. But, he is new here and to OC, and doesn’t know that this development has been in the works before the 90s bubble crashed. SunCal will go the same way as Lusk, because they went the same route but even worse. They might as well call John Laing homes now before they take over this project from the BK judge’s recommendation.
Looking for the bottom? Add the cost of new construction to the corrected cost of land to find out price scenarios of new housing supply.
Land in high cost areas like San Clemente can comprise 50-70% of the cost of housing. Land is the component of housing that is the most volatile price wise. When the market is soft bad, land prices plummet.
What’s happening now is land is being re-cycled through the system. Developers who own land at 2005-06 prices are selling it off at prices 20-80% below 2005-06 prices. This means builders today, can buy land, build houses and offer them to the consumer at prices 20-40% off of 2005-06 prices and still make a profit.
At this website, http://www.UsHousingMeltdown.org you can separate the cost of construction from the cost of the land to get an idea of where prices are heading.
MULLIGAN HEAD
YOU OWE EVERYONE ON THIS BLOG AN APOLOGY
NO IFS ANDS OR BUTS
SO WE WILL WAIT FOR U TO APOLOGIZE FIRST TO YOUR MOM THAN THE WIZARD OF BLOGGING AND THANTO ALL UR ALTER EGOS LIKE CRYSTALL BALLS ALFALFA AND ALL THE OTHER GOOF BALL NAMES U USE
sounds like more crap we don’t need. just because it’s “by the sea” in san clemente doesn’t matter as much as people think.
Ok: let me be clear. If a seller does not have to sell, they should not in this market. We all agree on this, yes?
Enter developer: if they do not HAVE to sell, why would they? There are so many developers in financial turmoil here today, just because one makes the headlines, do not think they are alone. There is a reason LEN is not moving forward on their urban project in Irvine. The timing is horrible. They then can either sit on the land and wait it out, build and hope for buyers, or sell the property as is.
When I said “smart developer there,” I was referring to the SOLE decision to not try and move that type of property in this type of market. It was not a blanket statement as to the state of their company.
Hwood: you are single-handedly the most immature individual that contributes (what do you really contribute here, capboy?) on this blog.
mav: you have a good head on your shoulders, but you go into attack mode too often.
Graph: you are correct, I do not have all of the history with the developer. Based on your input, I would steer away from them personally…and have my client do the same. That being said, even stupid developers can make a smart decision here and there.
pdu: I still do not truly follow what you were referencing above.
R.A.T.: don’t assume as you know what it does. As I have mentioned previously, I could care less what you think of me. A handle hiding behind a keyboard acts tougher and more omniscient than one does in person.
mulligan…… interactions on this blog should always be all in good fun………..
……. at one time Bear Stearns was trading at $170 a share…..
……. well when Bear was trading at $50 a share it would have been really smart to sell………. even though investors may not have NEEDed to sell……..
…….. the “investors” in OC real estate that have now become “accidental landlords” are in a very similar position……..
…….. when you make an investment mistake, usally the best decision is to move on as quickly as possible…….. do you see the Banks trying to hold on? hell no….. they understand it’s a LOSE / LOSE….. last year did you see the builders holding on? or were they providing heavy discounts to sell?…………
………… I don’t NEED to sell any losing equities…. but sometimes it’s the best move…….
……… 2006 prices might return in 2020…. that is optimistic……. servicing the debt crushes the “investment”……
That confuses me a bit mav as i reference stocks a good bit and am always told “this is RE, not stocks…totally different.” I see your point about moving the property. The wildcard here, obviously, is the oceanfront view location. Why does The Strand in Dana Point command such dollars? Scarcity and location. The front row lots there will go in the $15 million range.
I agree it should be in good fun, with insight and shared ideas. It is simply because I am in the RE profession that I take so much heat here. And I really do not care. But, when I fire back, “I disappoint.” It’s hypocritical at a minimum. If someone stands for something, then stand for it…don’t apply the stance when it is convenient or suits your POV. That is just amateur politics.
I can understand so many are upset they missed on a beach location 5 to 10 years ago. That was the deal of a lifetime. However, anything is possible. If you invest correctly, get a PhD, and work hard, you can get it still. Hoping for an economic collapse such that beach properties are available for 1990’s prices is and will always be just a dream.
We are almost at the corrective median for most locations. I am not a fan of the median, but in this instance, it is a decent indicator of the correction we have experienced. I like ppsf better, but it really fluctuates between the low, high, and middle price points. So, for a 20 year chart, I think the median is just OK. I do believe we will overshoot the correction due to funding constraints. Once lending returns to normal, I believe we will see a quick uptick to the appropriate adjusted median growth line.
jimmy2, It’s been my experience that the lawyers and the doctors are really just upper middle class in todays OC society. It’s the entrepeneurs and small business owners, even franchise owners, that vault ahead of the doctors when it comes to salaries and net worth.
Sure there’s a famous neuro surgeon or two, or a few very highly paid corporate or celebrity attorneys that pull down huge salaries. But the average doctor or lawyer or Indian chief in the OC is living in a tract home in Turtle Ridge. The big guns when it comes to annual salary and worth are the small business owners, and they’ve got the cliffside homes in Laguna Beach.
At least in my experience.
…………. you still don’t get what is happening in the OC………..
………….. home prices are being forced into the affordability zone…… under $500K………… where typical OC incomes can afford…….
………….. it’s started with lower priced homes……. knife catchers bought the condos early, thinking they got a deal……… and it will continue up the spectrum……… until all basic housing in typical neighborhoods is below $500K………
……….. of course this will also impact the higher end……… but everything in the basic Mission Viejo flavored neighborhood will be under $500K……….. that is what incomes can afford in the OC with safe traditional financing…….. 20% down / 30 year fixed…….
Troy, what you say is all true. However, armed with a PhD in physics, math, finance, or economics, it is possible to hit 400K per year.
Jimmy,
You obviously don’t have that Ph.D in Economics and math, otherwise you would begin to realize that the price depreciations along the Coast will be very significant. Just take an objective look at the various data. One doesn’t have to “hope for” an economic collapse. It’s taking place right now and don’t be fooled by the good days in the financial stocks. It’s the perfect short opportunity for several because fundamentals and the outlook of the United States didn’t change in the past days, just the market momentum based on nothing more but human psychology….2001 prices are well within reach for the Coast…
I think the owners of the land got smart. They realize they are sitting on ocean front real estate, a rare commodity indeed. So, if they cancel the project for now, they will get much more later. Ocean locations are in short supply and, in the mid term, are very profitable.
Lots of Phds in econ, math, etc. living right there in the faculty housing at our local schools.
The degree won’t get the top, the hillsides or even near the bottom…..and certainly not the waterfront.
Troy understands, while Jimmy continues to reveal that his whole persona presented here as a big-time CdM-er is either fraudulent or inherited — and soon-to-be in the hands of those Troy speaks of.
# Jimmy2 Says:
“I think the owners of the land got smart. They realize they are sitting on ocean front real estate, a rare commodity indeed. So, if they cancel the project for now, they will get much more later. Ocean locations are in short supply and, in the mid term, are very profitable.”
—————
Nope.
Holding vacant land is costly. Holding valuable vacant land is VERY costly.
Take your interest costs, add you taxes, add everything else involved in maintaining that land and you don’t need a Phd to realize the annual upkeep will exceed the annual growth for years to come.
Nope. We’re watching a desperation play and a meltdown.
If they were desperate, ocean front land can be easily sold. They are smart, not desperate.
Sure they could sell it but they’d have to ask the bank(s) for a short sale.
step 1: scoop up some dirt
setp 2: get envelope
step 3: address envelope to bank
step 4: drop in mail box
step 5: repeat on portfolio of land “investments”
I do not agree Mav. If everything was uner $500K, then the median would be around, what $300? Not happening.
What the hell is this Marblehead garbage? Some kind of Orange County stupidity?
Hell, Santa Monica is taking a beating, how much crack are you people smoking down there?
Failed development, any “Site Mitigation” planned?
Just wait until heavy rains Wash All That Torn-Up Site Dirt … down the slope Into Pacific?
Mulligan,
You perpetuate realtors having a bad name, “agent” that sales time shares.
“Ok: let me be clear. If a seller does not have to sell, they should not in this market. We all agree on this, yes?”
We do NOT all agree on this. First of all, holding on to land that isn’t doing anything and not selling it costs a lot of money every month (servicing the debt and paying taxes). As much as the value of land has fallen so far, it will continue to fall in value and will not come back up to bubble prices in nominal value for a long time (at least a decade). They’d be much better off taking a smaller loss by selling now, than by either selling at a much bigger loss in a couple of years or waiting a decade or so before the value does come back to what they think it’s worth and having spent all the holding costs each month which negates the point of holding on ’til prices come back up.
“Ocean locations are in short supply and, in the mid term, are very profitable.”
It’s true that ocean locations are quite valuable compared to more inland locations. However, there is still a limit to what they are worth, and if you pay too much for an oceanfront property, you can still lose money when selling it.
Let’s say that there is an oceanfront lot that will sell for $15 million on the open market. If one were to pay $20 million for that lot and then try to sell it, that person would still take a loss despite the fact that the lot is quite valuabe.
Again, it doesn’t matter how immensely valuable a certain piece of property is, it still has a limit to what it’s worth, and it can cause one to lose money if one were to purchase such property for more than it’s actually worth. There’s no guarantee that buying ocean property will lead to profit when selling it later on.