Sweet Orange

As I wrote previously, construction of the Ivy neighborhood in Irvine’s Woodbury East development was originally planned to be completed a few years ago. The developers delayed the development date in the hope that market conditions would improve.

The developers of the nearby Great Park Neighborhoods also planned to begin construction a few years ago, but they too put their original plans for residential development on hold. However, they are proceeding with construction of educational and commercial buildings.

Back in March 2008 Lennar’s updated their plans for the Great Park Neighborhoods residential construction as follows:

Availability:

• Land sales that would allow developers to start building would begin in 2009
• First vertical development would be in place/sold by December 2010
• All development would be complete by 2015

Type of Units, Number of Units, Pricing:

• Single-family detached-1100 units @ $1,700,000 each
• Condos (LLD)-60 units @ $650,000 each
• Senior housing-600 units @ $400,000 each
• Residential golf course-635 units @ $750,000 each
• Multi-unit (transit-oriented development-TOD)-686 units @ $690,000
• Low to moderate senior housing-200 units, price not specified
• Low to moderate multi-family housing-344 units, price not specified

Of course, a lot of time has gone by since this March 2008 update was made, and I am sure this information will change when the Great Park Neighborhood developers provide a new update.  Currently, the developers are keeping this information close to their vest as they gauge the market trends.

But I have a suggestion: Using the successful sell out the first phase of the Ivy development as an example, start the residential development in the Great Park with small, affordable homes. This is a niche in the Orange County housing market that has been ignored, and, as the quick sell out of the available Ivy homes shows, a pent up demand for this small and, therefore, more affordable housing exists.

Perhaps this is already on the planning board. We will see.

For a quick definition of the Orange County Great Park, see “The Orange County Great Park Revisited.” Also see “Orange County Great Park: Free Summer Events and the Jewel of Orange County Fundraiser,” and “The Orange County Great Park: Cirque du Soleil, Free Concerts Series, and Free Balloon Rides.”

Reference: Housing Availability at the Orange County Great Park

PHOTO IS OF A FORMER EL TORO MARINE BASE HANGAR THAT LENNAR CONVERTED FOR USE IN THE GREAT PARK NEIGHBORHOODS

Note: For updated pricing information, click here. sw 9-29-09

Small Homes Sell: Case in Point, the Ivy neighborhood in Irvine’s Woodbury East Development

In the current housing market, developers have difficulty selling their new constructions. So the quick sell out of the 13 available homes in Ivy, a neighborhood in the Woodbury East development in Irvine, might provide insight on a way forward for the building industry. The Ivy homes sold out within approximately 15 minutes of the July 11th grand opening. The key is that these Irvine Company homes (built by William Lyons Homes) fill a need and desire for smaller and, therefore, more affordable homes.

Developers in Orange County have largely neglected building the homes that fit this smaller model. For example, a few years back John Laing Homes (now bankrupt) built the first Woodbury East homes in the Celadon neighborhood. Only 8 of the larger Celadon homes (1594-1782 square feet) were built, and they remain unsold. When the Caledon homes went on sale in 2007, the asking price was in the mid-$500,000.

Perhaps the building industry is taking note of the Ivy-Caledon example and is including this information in their upcoming business models.

More Ivy development details: Current plans call for the Ivy development to eventually consist of 58 homes that range in size from 1180 square feet to 1503 square feet. Prices will range from $349,990 to $423,990. The next round of sales will be in four to six weeks. In addition to the principal, interest and property taxes, home ownership costs will consists of approximately $3,971 in Mello Roos fees, $134 for the monthly master association fee, and $175 for the monthly sub-association fee. Homes will be ready for move-in some time in 2010.

Additional posts on the Ivy development:

• Ivy. an Irvine Woodbury East Development, Opens with Smaller, More Affordable Housing Options
• Pros and Cons of New Irvine Development: Ivy, a Woodbury East Neighborhood
• Deja Vu in Woodbury East! Phase Two Iof vy Development Sells Out in 15 Minutes–Prices Increased

As I wrote yesterday, Ivy is a new neighborhood in Irvine’s Woodbury East development. Some of the pros associated with this development are the following: Amenities include the Palm Court, which consists of a junior Olympic pool, spa, fitness center, tennis court, basketball court, recreation center, tot lot, BBQ; walking distance to the Woodbury Town Center; close to the Jeffery Open Space Trail, two neighborhood parks, and inclusion in the Irvine school district.

Also, Ivy is near the portion of the Orange County Great Park that is scheduled to see the most development in the next 36 months, and the Ivy development is part of Irvine’s Green Building Program (I don’t have details now on how this show up in the Ivy development. Perhaps this is a post for another time).

In addition, Ivy helps to provide Orange County with a smaller housing option–an option that was neglected in the building-boom years.

On the con side, Ivy is close to the 133 freeway. Various studies report that proximity to a freeway is not the healthiest of living locations, especially for children. Also, there is the pricing question. Smaller usually means more affordable, but, as I mentioned yesterday, the pricing for these homes is unclear. Will the  price be right for the current market? Will these homes be affordable to those making a median Orange County income? And, for that matter, is it the right time for buying? Also, what the homeowners association fee will be is unclear.

The grand opening for the Ivy development is Saturday, July 11. For more details on Ivy development, see one of Erica Chavez’s post on the Irvine Homes blog and one of Jon Lansner’s post on his Lansner on Real Estate site.

PHOTOS OF THE WOODBURY TOWN CENTER AND THE JEFFERY OPEN SPACE TRAIL COURTESY POSTCARD US AND THE IRVINE COMPANY

Update: Apparently, the price was right. For more information, see this post. And for an update on phase two sales, see this post. For phase three information and updated pricing information, click here. sw 10-5-09

I wrote a post recently stating that small homes sell, and the reason they sell is because they are usually more affordable than larger homes. I also wrote that the housing development dynamics in Orange County has lead to a housing market with few of these smaller and, therefore, more affordable options. Well, homebuilder William Lyon Homes is following the “Small is Beautiful” theory with the opening (July 11) of the Ivy tract homes in Irvine. Ivy, which will be the first neighborhood in Irvine’s Woodbury East development, will consist of townhomes with 1180 to 1500 square feet, two  to three bedrooms and two-car garages.

However, a small home (at least small in  comparison to what homebuilders were building in our recent past) is advantageous only if the price tag is likewise small. The exact price of these attached homes in the Ivy development is somewhat of a mystery. Originally, I saw the price listed as starting at $399,000. However, most ads now list the price as starting in the high $300,000s (I guess $399,00 would qualify for that. Barely. But qualifies). However, an ad that I saw today stated the price is in the mid $300,000s. Time will tell what the market says the price for these homes should be.

Tomorrow: some pros and cons of the Ivy development in Irvine’s Woodbury East

Update: The Ivy homes that were available during the July 11 grand opening sold out within an hour. So apparently the market is saying that these homes are priced right. For more details, see this post. SW 7-12-09

For phase three information and updated pricing information, click here. sw 10-5-09

PHOTO OF THE IVY DEVELOPMENT COURTESY PRLog

On July 17 at 6:30 pm, the  Great Park Conservancy is presenting the fourth annual Jewel of Orange County fundraiser, which will include a hosted reception with cocktails, wines and hors d’oeuvres followed by a mesquite grilled dinner. Both will be held in Hangar 244, which is a former El Toro Marine base hangar that has been converted for use during Great Park events.. After dinner, the event moves outside for a concert and dancing. In addition, a silent jewelery auction will be part of the event.

The Great Park Conservancy is a non-profit organization with the goal of supporting the development of the Orange County Great Park as a world-class metropolitan park. Some Great Park project that the Conservancy is currently supporting are the Conservancy Nature Education Garden, Aviation and Heritage Museum, wildlife corridor, Great Park Farm and Food Lab, Great Park Citrus Orchard.

Tickets for this fund raising event are $250 each. Sponsorships and underwriting options are also available.

If the Conservancy event is not in your budget, here are some upcoming free Great Park events that should do the trick for you:

July 11–Growing the Park, Great Park anniversary events. Here is the description from the city of Irvine’s website:

To celebrate the fourth anniversary of the Orange County Great Park, bring your friends and family to Growing the Park, a sprawling festival divided into three activity areas — each representing a different aspect of the park’s past, present and future. From 10 a.m. to 4 p.m. on Saturday, July 11, activities will include a wingwalker show, petting zoo, live music, kite flying, vintage aircraft, food, hands-on activities, and appearances by the LA Galaxy Street Team and the Anaheim Ducks Street Team.

August-September 2009–the second annual free summer concert and dance series. The schedule for these events is now available. The events are free, but parking is $8. For more on these events, see my previous post “At the Orange County Great Park: Cirque du Soleil, Free Summer Concerts and Dances, Free Balloon Rides.”

Ongoing–day and evening rides in the Great Park balloon. Rides on this tethered balloon are dependent on wind and weather conditions, so call the Visitor Center at (866) 829-3829 (toll-free), or check the Great Park website before you go.

In addition, to these free summer events, ticket for the Cirque du Soleil’s January 2010 performances at the Great Park are now on sale.

GRAPHICS COURTESY THE GREAT PARK CONSERVANCY AND THE ORANGE COUNTY GREAT PARK

Related post: At the Orange County Great Park: Cirque du Soleil, Free Summer Concert Series, Free Balloon Rides

Well, it’s over. At least for now, and, with the California budget crisis, I don’t expect to see something similar in a long time. But who knows? A budget crisis like our current one is how this tax credit came into being, and there is no telling what deals will be made to resolve the current budget impasse.

On Thursday at midnight, the state of California stopped taking applications for the $10,000 tax credit that was available to homebuyers who purchased a new home between March 1, 2009 to March 1, 2010. Qualifications also limited this program to buyers who make the home their principal residence and live in the home for two years or more.

This tax credit, which was championed by the building industry, was included in the February California budget bill at the insistence of Senator Roy Ashburn (R-Bakersfield). His vote was needed to pass the stalled and long overdue state budget (Now that we have another stalled and overdue California budget, it’s deja vu all over again!).

The California Franchise Tax Board has accepted approximately, 12,000 applications for this credit. However, only 10,000 of these applicants will be granted the tax credits, which will equal $100 million in total. The tax board expects processing of these applications to continue into August.

If you are hazy on the difference between a tax credit and a tax deduction, here are some definitions:

A tax deduction, such as contributions to a Traditional IRA or 401(k), reduces your adjusted gross income. How much that deduction is worth to you depends on your marginal income tax rate (2008 Federal Tax Brackets).

If you are in the 25% tax bracket, a $1000 tax deduction means you will pay $250 less tax that year. If you are in the 10% bracket, a $1000 tax deduction means you’ll pay $100 less tax that year. If you have a simple tax situation, with little income outside of your regular job, this translates to a larger tax refund.

A tax credit is a dollar for dollar reduction in your income taxes. If you have a $1000 tax credit, you will pay $1000 less tax that year regardless of your tax bracket. A good example is the $1000 child tax credit. If your child applies and you don’t exceed the income limits, you get $1000 for each dependent child you claim on your tax return.
–Bargaineering

Graphic courtesy Wikipedia

This Saturday is the Fourth of July, our birthday. I hope that everyone has a chance to get out and enjoy

the intrinsic beauty of the organism called America
–Aldo Leopold

PHOTO COLLAGE COURESTY The Irvine Ranch Conservancy

Part Three of a three-part series: A Little Story About Our Economy
Part One: The Depression, Keynes, and Manipulating the Money Supply
Part Two: More on Manipulating the Money Supply
Part Three: Solutions?

In yesterday’s post, we saw that standard methods of both the right and left for dealing with an economic crisis have their limits. So what is the answer to our current economic difficulties?

Sticking with the money supply manipulation model and hoping that it will eventually work? Many say: Been there, done that. Didn’t work. These critics also say that the Fed’s attempt to control the money supply leads to economic bubbles and inflation.

Maybe the answer is a return to Keynes, as some say that the current stimulus plan is. However, many criticize this spend-your-way-out-of-the-problem approach as leading to inflation and a huge debt for future generations.

This group that is critical of the Keynes model often calls for tax cuts as the way out. However, criticism of this tactic also exists. For example, the critics of the tax cut model state that George W. Bush cut taxes, but we still had an economic tsunami under his watch.

So what is the answer to our current economic difficulties? As award-winning author and New York Times columnist Tom Friedman suggests, is something entirely new needed?

Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall - when Mother Nature and the market both said: “No more.”—Tom Friedman, “The Inflection Is Near?“

Questions to ponder, posts to write at another time.