Posted by: The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

15 responses to “Spec Builder Spectacularly Miscalculated Market”

  1. biliruben

    Youch!

    I think I’ll be calling all such misadventures “Youches” from now on.

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  2. Ray Pepper

    At least he hasn’t gone into foreclosure *************yet,********

    Your key phrase. Check back in October. He will not bring funds to close these.

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  3. patient

    There’s still about $400k between the lot prices and the current asking prices. Taken into account the kind of homes you can get for $400k in areas where lots are almost for free ( most of Texas for example ) I’m not sure these would sell for a loss if he gets current asking. Is the pure construction cost for a home like the one pictured in the post really above $400k?

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  4. Kary L. Krismer

    A few months ago I saw a builder on the news complaining that he’d been a good customer, but that his bank wasn’t giving him financing to build more houses. My thought was they were doing him a huge favor.

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  5. Ray Pepper

    look across the street at the lovely home with 6 or 7 cars not to mention homes worth 250k.

    Good God.

    The buzzards are circling!

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  6. softwarengineer

    IMAGINE THE WINTER UTILITY BILLS [SUMMER A/C TOO?] ALONE ON THOSE THREE

    The property tax is estimated at about $700/mo each too.

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  7. geon

    Right. Pay $700K , or more, for a house surrounded by 250-400K houses. I see it all the time. LOL. No central air? :(

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  8. seattlerenter

    Funny I just drove by those today on the way to spectacularly overpriced garage sale in a newer division right by there. The people had to be hurting for cash based on what they were asking for garage sale junk. The overpriced mindset is still alive and well. Oh and the homes in question are placed in a very strange location and the feel of it is extremely cramped with these out of place homes.

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  9. Ray Pepper

    zoom in closer at the house with the 7 cars. look at the one in front . no doors, no tail gate. Who gives me 5-1 they have more then 1 dog at that house?

    I hate barking dogs. Who bets Tracy Flannigan lives there?

    http://www.youtube.com/watch?v=6Asc9Ip2ph4&feature=related

    (I love taking a few days off)

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  10. gameboy

    I have brother-in-law who is a general contractor and he built pretty expensive homes for $120 to $180 sqft.

    Looking at these homes and based on his descriptions, I am guessing he probably spent about $140/sqft. That would mean that about 3500 sqft each, you are looking at $490k for construction.

    Perhaps, he was able to squeeze some extra savings due to building three at once, which means that he is probably selling them pretty much at cost. Which probably explains why the house has been sitting empty so long and he is not willing to negotiate further.

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  11. Scotsman

    Sorry, but for that much money I’m not walking up steps to the front door, and having the garage doors greet people who drive up. That’s what second floor apartments are for.

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  12. shawn

    I feel sorry for this guy because nearly every single person in the world, especially the press, was telling him it was the right thing to do with zero chance for failure. Really, there were just a few of us nuts that were saying this thing was going to blow up. This guy was in the stampede running off the cliff and all he could see is everyone else moving along, seemed to make sense, just follow that one in front of you. Opps, off the cliff.

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  13. EconE

    RE: shawn @ 13

    By the time he bought the lots in 2007, the warning bells had already been rung. LOUDLY.

    It is what it is.

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  14. ElPolloLoco

    By Ray Pepper @ 6:

    look across the street at the lovely home with 6 or 7 cars

    Funniest thing I’ve seen all day. What a moran.

    Never mind Cletus across the street — you’d have to buy all three houses and live in the middle one to have any privacy. He basically built a row of expensive townhomes.

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