REAL ESTATE : Even Good Design and Strong Sales May Not Be Enough in Today’s Market
Not even good design and mass-market popularity are enough to guarantee home sales in this recession.
Two projects featured in a Times story 16 months ago about so-called infill developments in Orange County--new projects built in already developed areas--are noteworthy once again.
At that time, they were cited as examples of how infill could be creative. Both projects won major awards for their design, and one--Metropolitan in Irvine--was the county’s best-selling condo development.
This time they are in the news for quite different reasons. Sales at Metropolitan have slowed, and on Sunday the developer offered the last 54 units in phases one and two at an auction. The complex, situated among the high-rise office towers that make up the Irvine Business Complex just east of John Wayne Airport, was hurt by pressure from new, low-priced development in Aliso Viejo and Irvine’s Westpark II neighborhood and from the Irvine Co.’s decision to turn hundreds of apartments into for-sale condominiums.
Susan Stevens, president of Susan Stevens Auction & Marketing Services in Laguna Hills, said 42 of the units sold Sunday, with prices averaging 80% of the condos’ earlier asking prices. Minimum bids ranged from $89,000 for a 934-square-foot, one-bedroom, one-bath unit to $138,000 for an upgraded two-bedroom, two-bath model with 1,326 square feet of space.
The condos were initially priced from $140,000 to $270,000.
“It wasn’t a distress sale,” Stevens said. “The builder just needed to sell a larger number of units than had been selling by conventional methods.”
The other featured project, 28th Street Marina, a waterfront condo development on the Balboa Peninsula in Newport Beach, failed to sell well from the start. The units were initially priced from $500,000 to $1 million.
Builder John Newcomb said that 15 of the 34 units have been sold since the project opened in February, 1992. He said he recently listed the condos with a broker after taking the project off the market for an entire year.
Earlier this month the developer’s lender, Continental Bank, filed a foreclosure notice against the property. The document shows that the builder, Marina Partners, is in default on the $17.5-million balance owing on a $20.5-million construction and land acquisition loan.
Newcomb and the bank still are talking, however. Newcomb called the foreclosure notice “a normal part of the loan renegotiation process these days.” A bank spokesman said a decision on whether to press the foreclosure or redesign the loan terms could come within a few weeks.
