The 16,500-square-foot hilltop house -- in the community that was the setting for "The Real Housewives of Orange County" television show -- is just one of dozens of unsold mega-mansions across Southern California conceived during the real estate bubble, when builders waged an ill-timed arms race to ever-increasing extravagance.
Comparably deluxe houses now lie vacant in droves along the coasts and hillsides of Southern California, from Manhattan Beach to Irvine. Their owners could afford to keep them on the market for months, sometimes years, hoping to find buyers who would pay their asking prices.
That holding pattern has kept the most expensive segment of the home market from posting the kinds of sharp price drops seen just about everywhere else. But it's now clear that there are too many palatial properties and too few princely buyers.
Two years ago, Larry Igarashi bet he could build a sprawling house in Orange County's foothills that would sell for at least $10 million. These days, you can easily guess how that turned out.
On Saturday he put the eight-bedroom house in the gated Coto de Caza community on the auction block and got a high bid of $6.6 million -- less than he was willing to accept.
Igarashi had gone all-out when he built the "Santa Barbara ranch" house: The master bedroom suite alone is 3,200 square feet, a bit smaller than the 10-car, climate-controlled garage, which measures 4,000 square feet. The driveway is long enough for a firetruck to turn around, and there's a wine storage enclave with room for 1,400 bottles.
Spec home builders were motivated to ramp up square footage to justify higher prices on their projects. But buyers today who are more likely be looking for a long-term home than a place to flip may not want the trouble of maintaining such large houses.
A bigger question also remains: What if the giant spec homes just never sell?
"Sellers there now have to unload, and in order to do so, they must reduce their prices," said Chapman University economist Esmael Adibi.
Spec mansions are now amassed in some areas like rising floodwater behind a dam. A search of homes for sale built since 2007 and priced above $3 million shows 39 such properties in Newport Beach and Newport Coast, 27 in Laguna Beach, 19 in Manhattan Beach, 18 in Irvine and 11 on the Palos Verdes Peninsula.
There are also hundreds of other multimillion-dollar homes for sale in Southern California that were not recently built, but sellers who live in homes they bought before the housing bubble are less likely to be under the same pressure to sell as speculators stuck with vacant properties and construction loans coming due.
As speculators and recent purchasers who must get out of mortgages that exceed their home values slash prices to find buyers, other sellers will have to lower their prices to compete.
In much the same way that foreclosures pulled down market prices for lower-priced homes, stressed sellers could deflate the high end by unloading luxury homes at bargain prices.
But even at cut-rate prices, few multimillion-dollar homes are selling. With so many to choose from, even those with enough money are taking their time.
If you have followed our site since the beginning you have shared our ups, downs, and in-betweens regarding the development of our new home marketing site: spechomes.com.
The past 6-12 months have been difficult for the home building industry, and for us too!
Every day I find stories online exemplifying the challenges that our industry and fellow home builders face, and because I look for it...
I also find hope... I believe that we are beginning to see a solid turn-around in the new home market.
Those of us who have made it this far have an arduous task ahead... changing, adapting, and essentially re-building our industry from the inside out.
People still need shelter - many prefer new homes over resales, but the approach to attract and retain our fellow Americans attention and trust will require a new type of effort.
Without giving the farm away, (I've done that before btw,) I'd like to share with you some of the "re-building" and adapting that we plan to implement here at spechomes.com.
Social media seems to all be the rage online these days, but without falling into wanderlust over the idea, here are some features that you might see upon re-launching:
Wordpress has a fantastic code base nimble, yet strong enough to start any online social platform!
With the help of some of the most talented wordpress plugin developers we aim to deliver to you a multi-user blog network centered around the Spec Home Network.
"Feature your Inventory Homes on SpecHomes.com and drive an overwhelming response from active home buyers on the internet!"
A Featured SpecHomes.com listing will appear in some of the most prominent sections of the site as well as appearing highlighted in our inventory home search results. Your featured listing will get premium visibility and increase the audience for your ready to move spec homes. The more prospects that see your inventory homes, the better chance you have of finding a buyer.
What are the Key Benefits?
High Visibility. Featured Inventory Homes are highlighted in the Search and on other content pages. This increases the chance of your listings getting noticed by active and passive property seekers.
More Click-Through. Your listing will get more detailed views from Real Estate Professionals by being a featured listing on SpecHomes.com!
More Exposure. Call more attention to your inventory house listing, your organization, and your opportunities by going featured, and take advantage of extra spec home web traffic through our online distribution partners.
How Does SpecHomes.com Syndication Work?
"Behind the scenes, we distribute your listings via automated XML feeds to major internet classified and search engine destinations such as:
• Google Base
• Oodle
• Vast
• Backpage
• Propsmart
• Edgeio
• Lycos
• Zillow
• Trulia
• Local.com
• FeedBurner.com
And many more... syndication partners are updated frequently...
We also supply automated notification of new page contents to Yahoo!, Google, & MSN daily.
In order for your spec home inventory to appear as a featured SpecHomes.com listing, you must first submit your data via your easy to use account control panel. Once your spec home ad is live, it will be rotated throughout the site with other featured listings in your local region or area.
"Syndication is a term we use to define the most unique part of our service."
Basically you create your spec home listings once on SpecHomes.com via our easy to use control panel, and we do all the heavy lifting behind the scenes of sending your classified listing information to other high traffic websites. So you can potentially have dozens of websites advertising your inventory all across the internet!
SpecHomes.com is consistently on the first page of search results for nearly 900 keywords, cities, states and search terms related to:
Spec homes, inventory homes, home builder inventory, new home community events, and home builder directory on Google, Yahoo!, MSN, AOL, and many others as well!
These FREE Extra Features make you Local Internet Marketing Experts!
• Create and submit new home community events relative to your new homes and communities for free to our online New Home Community Events Calendar - perfect for extra exposure online!
• Find out what the competition is up to - sign up for free automated email alerts in your area! When another home builder posts a listing in your city, will send you a notification to check out their offerings.
And We Never...
• Sell, Rent, or Share your confidential information!
• Charge you for individual leads. Your listings = Your customers!
We want you to dominate your local marketing area on the internet and we provide you the latest tools available on the internet today to do just that.
CPSC has received about 608 reports from residents in 21 states and the District of Columbia who believe their health symptoms or the corrosion of certain metal components in their homes are related to the presence of drywall produced in China.
State and local authorities have also received similar reports.
Consumers largely report that their homes were built in 2006 to 2007, when an unprecedented increase in new construction occurred in part due to the hurricanes of 2004 and 2005.
Sneaking in as soon as the walls went up during the construction process, this intruder has been concealed by insulation and reported by air conditioning breakdowns and faulty electrical outlets.
Corroded wiring and a distinct sulfur smell in the air are visible and common side effects.
QUESTIONS AND ANSWERS
Q: How can you tell if your home has problem drywall?
The Consumer Product Safety Commission recommends homeowners worried about Chinese drywall check for a persistent rotten egg odor; respiratory or other symptoms alleviated by leaving a building and worsened on return; blackened and corroded metal, including copper, nickel, silver and/or stainless steel; premature failures of central air-conditioning evaporator coils; blinking lights or power failures, arcing or sparking, intermittent operation or failure of appliances such as refrigerators and dishwashers and electronic devices such as televisions, computers and video-game systems.
Q: What are the health symptoms and risks?
The most frequently reported symptoms are irritated and itchy eyes and skin, difficulty in breathing, persistent cough, bloody noses, runny noses, recurrent headaches, sinus infections and asthma attacks. Since many consumers report that their symptoms lessen or go away when they are away from their home, but return upon re-entry, it appears that these symptoms are short-term and related to something within the home.
Q: What are the potential electrical or fire hazards?
Consumers should generally watch for circuit breakers that need resetting frequently without any apparent cause; lights that dim often without any specific causes; bright flashes or showers of sparks anywhere in the electrical system; unusual sounds from electrical system devices; overheating of switch plates, dimmer switches, receptacle outlet covers, cords and plugs; strong fumes from overheating plastic or electrical insulation materials; and any electrical shocks. Multiple symptoms would be a stronger indication of problems.
Q: What should you do if you think your house has problem drywall?
CPSC recommends four steps. First, consult your physician as soon as possible if you are suffering from the health symptoms described as common to the reports of exposure to problem drywall. Second, contact your state and local authorities to report your concerns and receive direction on help or resources. Third, report your concerns to the CPSC at its Web site. Fourth, consider contacting your insurance company and homebuilder to report your concerns.
Multiple symptoms would be a stronger indication of problems.
Read the July 2009 status report on the CPSC's investigation of imported chinese drywall.
Less than three months after new rules for home appraisers kicked in, the real estate industry is in uproar.
Realtors, new home builders, mortgage brokers and the appraisal industry itself all agree the rules are causing problems. Some are backing a bill in Congress to kill them.
The new guidelines bar mortgage brokers from ordering appraisals themselves, forcing them to do so through a mortgage lender. Lenders may order appraisals through in-house staff or appraisers hired by outside firms known as appraisal-management companies. But neither may talk to the appraisers about the value of the property they're evaluating.
Since they went into effect May 1, the rules have created a slew of unintended consequences that critics say are causing delays in closing sales, or undermining sales because botched appraisals are coming in too low.
"This thing is not only preventing the housing market from recovering, it's destroying the housing market," said Marc Savitt, president of the National Association of Mortgage Brokers. "We're eliminating competition, and we all know what happens when you eliminate competition: Prices go up."
If you are wondering... spechomes.com is a team blog about building, buying, and selling new homes.
That being said, there are guidelines one should follow when readying a blog post to be published on our site. The following are a "living" set of principles or guidelines for posting:
Content
Each blog post will be a minimum of 300 words of original new home related content. Every blog post submitted will be subject to any current editorial policies or guidelines.
Currently, home listings are NOT allowed on the spechomes.com team blog.
Links
Each blog post will contain a maximum of 3 external links per published blog post, one of which must link to a page on spechomes.com, (We recommend linking to us with each blog post title as the link.)
Example: "Guidelines for Posting" in the first paragraph of this article
Linking to ActiveRain is NOT permitted.
Tags
Tagging every new home blog post to be published on spechomes.com is encouraged, and should be limited to no more than 3 keyword phrases per post.
Example: new house,home builder,inventory homes
Groups
There are NO restrictions syndicating your content to groups on AR.
Linking to groups on AR is NOT permitted.
Localism
There are NO restrictions syndicating your content to Localism.
According to a recent study conducted by the National Home Builders Association, more than 80% of new home buyers start the home buying process on the Internet.
It seems that those statistics have yet to reach the advertising and marketing departments for a majority of the home building industry. See also, Home Builders Are You Blogging?
One Texas home builder however, seems to be getting the message loud and clear.
Tilson Homes has been building quality new homes on Texas land for over 75 years, and a quick peak at their website might foretell why many more prospective clients will consider them to build their new house in the future.
Here are the top six characteristics on how this home builder website effectively delivers the information that Internet prospects want; and how you can implement similar strategies with your online advertising:
1. The main objective for most house hunters searching the Internet is to gather information that will help them make an informed buying decision.
An online sales counselor should be available 7 days a week during normal business hours to help answer prospective questions that are not covered in your online marketing literature.
2. Customer interactivity does not have to be flashy to be an effective Internet advertising tool on home builders websites.
The ability to create a user account to store home search information will foster repeat visits to your website, and begins to incorporate a sense of customer attentiveness to your prospect's personal needs and wants.
3. It is suggested to formulate multiple access points for the main content of your website. Web marketing studies show that different web users respond to different visual stimuli.
Balancing graphic links with keyword rich text links can increase your website browsers ability to effectively navigate your floor plans and home offerings easier.
4. A common complaint for many home builder websites is that there is not enough information regarding specific product and floor plan offerings.
Stop all heavy handed advertising techniques that impede a home buyers ability to gather information! Give them what they are coming to your website for new home information.
5. Provide live pictures that actually demonstrate the product that you are offering to build.
A home builder only has to build a floor plan for client, to be able to re-use those images to sell to another. Most home buyers don't want to imagine their future home, they want to see it.
6. In case your website design team missed the mark on providing access to the easy to find information that your web clients are looking for...
Create a simple keyword rich, text-based site map navigation page that allows browsers un-tethered access to everything that your home building website offers.
This is the information age. Gone are the days of home builders and real estate professionals being the only segment of the population to posses knowledge regarding new housing and construction.
Just as the home building industry has implemented new technology, and techniques to speed up the construction process itself, the online home buyer has also discovered the power and freedom that well designed web technology brings.
Builders who take initiative with these simple, yet effective website marketing strategies will reap the rewards that transcend their core construction services, they will be sewing the seeds of future new home sales.
The LA Times Hot Property column reports that real estate mogul Mohamed Hadid's latest Beverly Hills offering has had a price drop from $16.5 million to $12.9 million.
The 12,000-square-foot spec home located near Beverly Hills, California at 1446 Donhill Drive has a Balinese design with bamboo, exotic Asian woods and other materials imported from around the world.
This is opulence on a grand scale with heavy doors, floor-to-ceiling glass windows, and three separate master suites among the six bedrooms.
There is a Balinese-styled home theater, wine cellar and a gorgeous infinity pool with unobstructed views.
All of the furnishings are included in the price of this lavish spec house.
Have you read the headlines surrounding the demolition of 16 never lived in, new homes near Victorville, California?
Patrick Thatcher, staff writer for the Daily Press first posted this VIDEO on Youtube.
Guaranty Bank says knocking the homes down is cheaper than finishing them, making some wonder if it could happen here.
The Texas-based bank has decided to have the spec homes destroyed in the desert community because the estimated $1 million cost to complete them was more than it could make selling them.
Four of the luxury homes, priced in the $280,000-350,000 range, were already finished, and the others were in various stages of completion. The estimated cost of the demolition was over $100,000.
"It's incredibly unusual I've not heard of it all in Texas I've seen that maybe once or twice in my whole life," said Harry Savio of the Austin Home Builders Association.
Speculative builders are subject to real estate excise tax on the selling price of the land along with all attachments including buildings, roads, and other structures. The sale of real estate is not subject to the B&O tax or retail sales tax.
A speculative builder is the consumer of all material incorporated into the real estate. A speculative builder may not use a resale certificate to purchase materials used in speculative building. Any construction contractor hired by a speculative builder is a custom prime contractor for tax purposes and not a subcontractor. Hence, any contractor performing construction services for a speculative builder must charge sales tax on the total contract price.
When a speculative builder sells or contracts to sell property upon which there is a building under construction, all construction completed subsequent to the date of such sale or contract constitutes custom prime contracting.
The "retail sale" does not take place until the purchasers have the "right of possession" to the real property being constructed. Typically, the right to possession is transferred on the date of closing the property conveyance. Therefore, retail construction on what was originally a speculative house does not occur until after closing.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
Every day I find stories online exemplifying the challenges that our industry and fellow home builders face, and because I look for it...
A Featured SpecHomes.com listing will appear in some of the most prominent sections of the site as well as appearing highlighted in our inventory home search results. Your featured listing will get premium visibility and increase the audience for your ready to move spec homes. The more prospects that see your inventory homes, the better chance you have of finding a buyer.
The LA Times Hot Property column reports that real estate mogul Mohamed Hadid's latest Beverly Hills offering has had a price drop from $16.5 million to $12.9 million.
Have you read the headlines surrounding the demolition of 16 never lived in, new homes near Victorville, California?
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