bubbleinfo.com

I think the Grand Carmel Valley, err Del Mar, will be the pinnacle of SD RE speculation. 1/4 of a billion for a hotel in the middle of soccer Mom country that needs ~300 full time employees to operate when full (if ever). I don't know how much was borrowed, but an awful lot of expenses need to get paid before the mortgage note. I just checked and it was actually $300 million to build. Did someone think that good schools sell hotel rooms ?

$5,000 deposits! Bwahahahahaha.... Do they seriously think that all the people who put down deposits are going to stick around and actually close on their units? Deposits that are less than 1% of the purchase price... Do these developers have accountants? Do they have any idea how much a 3-year at-the-money call option premium typically costs? I simply can't believe this...

It would be much cheaper for those who put down deposits to simply walk away and then come in fresh at the new lower price...7% lower purchase price (which they are offering to new buyers) is a great deal more than $5K.

They are going to have to give those who put down a deposit the new price also.

Wow... 700 units coming online with around 300 already purchased by speculators (just looking for a quick flip that isn't going to happen) is going to be like and atomic bomb on the downtown condo market.

It will be interesting to see if Vantage Point screws over existing owners by approving lower comps to attract new buyers. If they do welcome to lawsuit land.

Neutron Condo Towers.

shadash what circumstances would determine if they're liable for lowering the value of sold condos? Most condos and developments in UTC and Carmel Valley I'm aware of have had price adjustments (both up and down).

I don't think there are any laws in CA that require a business that have taken a deposit for one price to lower that price for the deposit-payer because they have lowered it to attract new buyers.

However, as jb points out, if forfeiting the deposit costs $5000 and the newer prices are more than $5000 less, you might as well walk away. And if it was me, if the builder didn't offer to lower the price, I'd walk away and buy elsewhere. So the question is, are they willing to risk losing the advance deposit buyers completely in this market rather than reducing the prices?

I'm wondering what will actaully happen to the 289 buyers who already signed the purchase agreement - are they locked into the deal or will they be able to walk away and just forfeit the $5K deposit? Or is there a liquidated damages provision that makes walking away hurt much more? Did the developer breach the agreement by not delivering the units within the proscribed time and therefore possibly letting the buyers off the hook? Lots of possibilities.

This one could end up being a replay of the Harbor Club debacle in the early 90's. Is there anyone who doesn't think that things will be much worse when these units come on line a year from now?

The whole bit is bluster. Builders sell for less than the cost of construction all the time. With all the delays none of those deposits are at risk. The builder hasn't performed. There's no way buyers could complain about price changes. That is long settled law. The "similar" units are not identical and even if they were there's no agreement that prices are market prices or that market prices won't change.

BDiego,

You don't need to be right to sue someone. You don't even need to have a law stating a precedent proving that you're right. All you need to do is submit the paperwork. Which is what tends to happen whenever someone loses $$$. Even if there is no chance in hell that the person suing will win many people will still sue. If nothing else to use it as a delaying tactic or just to be the squeaky wheel, hoping to get paid off to go away.