Low enrollment at West Creek Elementary delays school opening for at least a year.

West Creek Elementary School, which is connected to Lennar’s West Creek and West Hills developments in Valencia, will not open this year as planned. The school is expected to open in 2010 instead.

Saugus Union School District officials have elected to delay the opening of the West Creek Elementary School due to low enrollment numbers, and will instead use the facility for meeting rooms and staff development until there is enough student population to justify opening the new school.

The district requires at least 300-400 enrolled students to open a new school, since each new school requires administrative staff as well as teaching staff. The current enrollment at West Creek Elementary is apparently only about 50 students. Enrollment is expected to remain low for West Creek Elementary until Lennar’s West Creek and West Hills developments sell more homes. The adjacent Tesoro del Valle development is served by the Tesoro del Valle Elementary School, so it’s likely that the current West Creek and West Hills students will attend this school as well until their school is built.

Lennar’s West Creek and West Hills developments have largely been put on hold until the real estate market starts to improve. Estimates are that they may start building some of their projects again within the next 1-3 years, with some homes likely delayed for 5 years or more.

Lennar recently stopped production of the Patina homes in West Creek Valencia, after selling off the few remaining homes at a discount. Local sales representatives state that it will be at least another year before the Patina homes begin construction again, and the next reincarnation of the Patina homes may not include the solar power and other energy efficient features that the current homeowners enjoy.

That leaves only the Castillo homes available for purchase in West Hills, as well as the few remaining Esperto condos and townhomes in West Creek. Other homes and townhomes were put on hold already, including the larger Mosaic homes (Mosaic and Patina floorplans were reincarnated as Brookville and Heirloom at RiverVillage near Saugus), the Toscana homes (only the models were ever built) and the Artisan, Artenati, and Claridad condos and townhomes. The larger Vintage and Classics homes in RiverVillage were also put on hold, with the models being sold off recently after only a few of these homes were built.

Lennar is negotiating with creditors to buy back Newhall Ranch land at a discount from its bankrupt Landsource venture.

Lennar and its Landsource venture are apparently working on a deal with Landsource’s creditors to buy back the Newhall Ranch property just west of Valencia in the Santa Clarita Valley. This deal would create a new company comprised of Lennar and several hundred of its creditors, who would contribute substantial equity to this new venture.

Much of Lennar’s interest in the Landsource venture was sold to CalPERS in February 2007 for $707 million, which included the Newhall Ranch property and others. Landsource then filed for bankruptcy protection later that same year. The current negotiations with the creditors of Landsource would buy back this land at a discount, placing it into a new holding company. Hmmm… sounds like “flipping” to me, but then this deal would make Landsource’s creditors part owners of this new venture as well, thus creating a way for them to recover some of their losses.

The Newhall Ranch development as planned would include 20,885 homes on 12,000 acres, with 9 square miles of land reserved as “natural areas”. The development is planned to be built in stages, or “villages”, through 2025. However, with Lennar’s recent slowdowns on construction of its current developments in Valencia’s West Hills, West Creek and RiverVillage, it’s unclear if the Newhall Ranch development will start construction as originally scheduled or be delayed at least a few more years.

Many Santa Clarita residents have been asking whether the Newhall Ranch development will be built, or if it has been permanently mothballed. The four villages of the Newhall Ranch development (Landmark Village, Mission Village, Homestead Village and Portrero Village) were originally scheduled to be built over a period of about 15 years, with Landmark Village being the first area to be developed and the final development to be completed in 2025. These current negotiations with Lennar and Landsource’s creditors would appear to be placing the Newhall Ranch development back on the calendar. Only time will tell when the actual start date will be though, so don’t hold your breath!

New “required use” rule would prevent home builders from offering incentives or discounts to buyers that use the builder’s designated lenders.

Home builders have been providing “incentives” for homebuyers for a long time now, with buyers typically getting allowances for rate buy-downs, flooring and other upgrades as part of their new home purchase package, as long as the buyers use the builder’s designated in-house lender. These incentives are not always small change, with some amounting to $30,000 or more, especially for move-in-ready (or inventory) homes.

The new Real Estate Settlement and Procedures Act (RESPA) “required use” ruling would prevent builders for offering these incentives if they are tied to the buyer’s use of specific service providers. The effective date of the ruling from RESPA regarding the “required use” of certain lenders and other service providers in order to obtain buyer incentives for rate buy-downs and upgrades has been delayed for 90 days, with a new effective date of April 16, 2009.

The National Association of Home Builders (NAHB) has filed a lawsuit regarding this rule change, which resulted in the 90-day delay, and will be using the extra time to get their “legal ducks in a row” to dispute the ruling. The RESPA states that it has always been against the law for a settlement services provider to require the use of its affiliates, and the recent ruling expands this definition to include builders. The builders contend that they are not settlement service providers, and thus the new rule should not apply to them.

HUD spokesman Brian Sullivan says, “We were getting complaints from consumers who, after they got their house and their new granite counter tops or their new framed-in sun room – or whatever the incentive was – and they started to do the arithmetic saw that the loan they were put in was appreciatively more expensive than they could otherwise qualify for and so it wasn’t a true discount.”

The bottom line with these incentive programs is that you need to do some comparison shopping, just like you would do for any large purchase, whether it’s a car, a tv or a new home loan. If the builder’s lender offers rates and fees that cost you more than the incentives you’re getting from the builder, then get your loan elsewhere! You’ll need to do the math here… if you have a qualified Realtor helping you out with your new-home purchase, she can help you figure out what works best for your needs.

Builder incentives and their tie-ins to the builder’s in-house lenders are part of the minefield that homebuyers will need to navigate as part of the new home buying process. If you’re looking to buy new construction, be sure to bring a qualified Realtor with you to your very first visit to any new home development. This first-visit rule is strictly enforced by most builders, so if you don’t have your Realtor in tow on your very first visit, then you’re on your own to get the best deal and to make sure that the builder isn’t taking advantage of you. Remember that the nice saleslady who greets you in the sales office has only one job and one responsibility: To sell homes for the builder. You, the buyer, are not her client nor her responsibility.

Santa Clarita Realtor Linda Slocum specializes in new home sales. You can reach her at 661.670.0349 or at Linda@SantaClaritaRealEstateBlog.com

Builders cut home sizes and building costs in hopes of selling more homes and increasing their bottom line.

KB Home has announced plans to introduce smaller homes with simplified designs in an effort to attract first-time homebuyers and to increase their sagging bottom line. Gone are the McMansions of a few years ago, to be replaced by homes with smaller square footage and less wasted space.

KB will also be standardizing a lot of features, much as Lennar has already done in the Santa Clarita area. If you visit any of the Lennar homes in the West Hills, West Creek or RiverVillage developments in Valencia, you’ll notice similar cabinets, countertops and flooring in all price levels. The Lennar homes are virtually move-in ready, with designer paint on the walls and refrigerators included (earlier models included washer and dryer as well). KB has been known for the exact opposite… everything was NOT included, with items such as fireplaces and separate tub and shower in the master bath treated as extras, and no designer touches whatsoever without paying an extra fee to their design center.

Builders can save a lot of money by bulk-ordering a lot of the components used in building a home, such as windows, cabinets, countertops and more. This process can be even more effective by ordering only standard-sized windows, for example, so all homes use the same windows and no extra fees are paid for custom sizes.  Buyers will still be able to visit the KB design center to customize their new homes… the design center will still provide thousands of options for carpet, floor tile and more, and will remain a large profit center for the builder.

What the smaller homes will be lacking will primarily be the formal living spaces, to be replaced by “flex” space instead. With flex space, the main features of the house, such as kitchens, stairways and plumbing, remain the same, but certain areas can be either added or altered to be used as bedrooms, lofts or dens without adding significant cost to the home. As KB’s president and chief executive Jeffrey Mezger said, “You can’t sit and wait for the market to come back to you. You have to retool your product.”

I don’t know why builders continue to include the formal living spaces in many homes anyways… these are areas that most homeowners don’t use very often, and many would prefer to have usable square footage instead of rooms that just collect dust. Could it be that the change in the real estate market has also brought about a builder’s reality check in the way that people really use their homes? While some families do use formal dining rooms once or twice a year, the use of formal living rooms have gone the way of the dinosaur for the most part, at least in the Southern California area.

It’s funny that the home-buying public tends to be brainwashed into thinking that they must have a formal dining room that will accomodate their existing oversized dining room table, even though they haven’t used that table in the last 10 years. Quite an expensive room, and a waste of square footage in many cases, just to house a special table! It’s not uncommon to see single-guy homes where they’ve converted the formal living spaces into screening rooms and home gyms, or to see formal living or dining rooms converted into playrooms in homes with small children.

The upside to this standardization is that in many cases new home buyers will start out with nicer flooring, countertops and other features than they would if they were required to pay extra in the builder’s design center for these upgrades. The downside is that while the homes are generally nicer overall, they all look pretty much the same. Generic homes will be replacing McMansions, and hopefully consumers will begin to have more control over their discretionary spending as well.

LandSource and certain subsidiaries, including Newhall Land and Lennar, have filed for Chapter 11 bankruptcy protection.

Newhall Land (Lennar) announced over the weekend that they have filed Chapter 11 bankruptcy, which really comes as no surprise.

Does this mean that all of their current and proposed Santa Clarita new home projects, including West Creek and West Hills in Valencia, RiverVillage and Newhall Ranch will be permanently mothballed? Likely not.

The Chapter 11 filing creates the means for Newhall Land to restructure its debt so they can move forward. LandSource, the parent of Newhall Land, has apparently secured a new line of credit from Barclay’s Bank for $135 million.

We’ve been watching Lennar’s struggles in the Santa Clarita real estate market as they halted the sales of the Mosaic and Patina projects in Valencia’s West Hills as well as the Artisan and Claridad projects in Valencia’s West Creek in November of 2007. They opted to consolidate their efforts into the Artenati and Patina developments at West Creek, the Castillo development at West Hills, and the RiverVillage project instead of continuing with the projects that had lower sales at that time.

Lennar sold a 62% share in the Newhall Ranch development at the beginning of 2007 to MacFarlane Partners, with California Public Employees’ Retirement System (CALPers) as one of its biggest investors. Lennar retained a minority interest in the Newhall Ranch project as well as the rights to collect management fees. Lennar also posted its first quarterly loss in 10 years at the same time, largely due to property value write-downs.

Buyers have been benefitting from the price reductions and buyer incentives that Lennar has been offering in recent months, including interest rates "fixed for life" in their current promotions at 5.25% on standing inventory. On the back end, buyers have been enjoying builder-paid closing costs as well as prepaid HOA dues and other incentives. With these incentives as well as the the interest rate buy-downs, many buyers are finding that they need little out-of-pocket funds to buy a new home, so Lennar’s strategy is clearly working. They are definitely selling homes in the West Creek, West Hills and RiverVillage developments, and their standing inventory in the Santa Clarita area is close to zero.

Reminder: If you are considering buying a new home from Lennar, be sure to have a qualified Realtor accompany you on your first visit to the sales office. There are often unpublished incentives that will only be available if you ask for them. Don’t have a Realtor? Contact Santa Clarita Realtor Linda Slocum at 661.670.0349 or send her an email.

Lennar's Santa Clarita developments in West Creek, West Hills and RiverVillage offering new incentives.

Get out your Secret Decorder Ring again, folks… Lennar’s offering new incentives for Santa Clarita home buyers, but you’ll need to know the secret before they’ll give them to you!

New incentives from Lennar include 1% off the list price of homes as well as interest rate buy-downs and other incentives, including paying for closing costs and upgrades in many situations. They are offering 5.25% "for life" for qualified buyers on certain homes as well, which could very well allow some home buyers to afford the home they want instead of the home they’d have to settle for otherwise.

These incentives are offered on homes at Valencia West Creek and West Hills as well as the RiverVillage (River Village) development. Feeling a little unsure about jumping back into the Santa Clarita real estate market? With these added incentives, including interest rate buy-downs, it may be worth a second look!

Whats the catch? None, really, other than jumping through a few extra hoops to get these deals. You won’t get them by walking into your nearest sales office, nor will you get them if you’ve already registered as a potential buyer with Lennar. Well… scratch that and rewind a bit… they may give you some of these new incentives as an already-registered buyer if you go about it correctly.

Now for the fine print… your Realtor needs to register you at the Lennar sales office on your very first visit (don’t go there alone, even "just to look"), and your Realtor needs to jump through a few extra hoops before meeting you there. Shhhhh… I know the secret…. call me at 661.670.0349 or email me (Santa Clarita Realtor Linda Slocum) and I’ll make sure that you get all available incentives and discounts.

Looking for a deal on a new home? Today's the day!

With home sales lagging in recent months, Santa Clarita’s new home builders are looking to move a bunch of homes on Memorial Day by adding a menu of new incentives.

If you haven’t considered Lennar’s RiverVillage (River Village) yet, you may want to take a second look. Lennar has added two new developments, Classic and Vintage, with larger, more open floor plans and solar power. These homes will have up to 4,381 square feet, and one model features a fully detached "casita" that is perfect for a home office, art studio, or guest room.

This is the best weekend to buy the new Classic and Vintage homes, since Lennar is offering introductory pricing and incentives that will only be available for a very short time. You can read more about Lennar’s RiverVillage Classic and Vintage homes here.

Lennar is also offering financial incentives in the form of interest rate reductions and more in their Valencia West Creek and West Hills developments. These are smaller homes than the Heritage, Classic and Vintage homes in RiverVillage, but many prefer the Valencia location. Also available in West Creek and West Hills are reasonably priced townhomes.

If you are interested in Lennar’s new homes, DO NOT go there alone on your first visit. You must bring a qualified Realtor with you in order to maximize your options and incentives.

While Lennar’s sales reps are trained to sell their product, they are working for the builder and not for you. Therefore, their incentive is to maximize their profit while getting homes sold. A qualified Realtor will know what to ask for in the form of upgrades and incentives, and will be able to help you maximize these to get the best home for your money.

Need Realtor representation for your new home? Call Linda Slocum at 661.670.0349 or email her today!

RiverVillage in Valencia to Feature Classic and Vintage Luxury Solar Homes

Lennar has announced the upcoming pre-sale of their new Classic and Vintage homes in the RiverVillage (River Village) development in the Valencia area of Santa Clarita.

The Classic and Vintage homes at RiverVillage will be part of Lennar’s SolarPLUS series of homes, with solar power and additional energy efficient features. These homes will have similar features to the current Patina at West Creek solar homes, but with larger floorplans.

Classic homes will have 3,684-4,381 square feet, and Vintage homes will have 3,387-3,800 square feet. Pricing has not been announced yet, and likely will not be announced until the day they start pre-sales in mid-to late May.

Current pricing of the Heirloom homes at RiverVillage ranges from $772,000 to $777,000 for the 3,512 square foot model and from $742,000 to $747,000 for the 3,396 square foot model, so expect the new Classic and Vintage homes to be priced in a similar manner.

The Classic and Vintage homes at Valencia RiverVillage will be similar to all other Lennar homes in this area, with certain features included and not subject to change. This helps to create a higher quality product overall for the home buyer, and also keeps Lennar’s costs down since they are able to purchase materials in bulk. Included features will be granite kitchen counters, GE appliances, Merillat/Quality cabinets and upgraded flooring as well as the energy efficient features that are part of the SolarPLUS program.

SolarPLUS features include Sun Power SunTile roof tiles that blend into the existing roof line, improved insulation, energy efficient windows, tankless water heaters, energy efficient lighting, online performance monitoring, and more.

It’s really pretty cool to see the electric meter running backwards on these homes, which happens when your solar panels are producing more electricity than you’re currently using. Current residents of the Patina development in West Creek have reported electric bills as low as $15 a month!

Don’t Go There Alone, or You’ll Miss Out on the Best Deals!

As always, Lennar requires all buyers to be accompanied by their Realtor on their very first visit to the RiverVillage models. Santa Clarita Realtor Linda Slocum specializes in assisting new home buyers in getting the best deal possible, and is available to help you get your best new home deal as well! Linda’s services cost you nothing and can gain you a lot of advantages in builder incentives, and in making your new home buying experience a pleasant experience and a smooth transaction.

Be sure to read our Tips for Buying New Construction, and then either call Linda at 661.670.0349 or email her to set up an appointment to see these RiverVillage homes, or any other new construction that you may be interested in.

Miscommunication between Lennar's offices prompts temporary removal of SOLARplus offerings at Patina at West Creek Valencia.

I’ve got to admit that Lennar has my head spinning on this one… As it turns out, Lennar Valencia’s announcement that the SOLARplus Patina homes would be discontinued after Phase 1 was the result of a miscommunication between Lennar Headquarters and the Valencia Sales Team.

So, the bottom line is that Lennar WILL be producing SOLARplus homes in Valencia at the Patina development in West Creek Valencia. (Yes, that sound you just heard is me breathing a huge sigh of relief!)

Sorry for the head-spinning effect of all of these announcements, folks… there’s been a lot of confusion at the local Lennar sales office lately. Apparently some communications from Lennar’s corporate offices were either not clear or were misinterpreted, and that misinformation was relayed to the local sales team. I certainly wouldn’t have wanted to be in their shoes this week!

Lennar about-faces on its SOLARplus homes, cancelling all but one phase and then reinstating them a few days later.

Lennar has changed its mind yet again about its developments in West Creek Valencia, cancelling [Edit: and then later reinstating] all future builds of its SOLARplus homes in the area.

Lennar’s Patina homes in West Creek Valencia have been marketed as SOLARplus homes since late December, with all sorts of solar demos and gizmos put into place to hype this new technology. This would have been [Edit: will be] one of the first solar developments in Southern California. Lennar started building their solar homes in the San Francisco, Sacramento and Fresno areas in 2007.

Apparently Lennar has bucketloads of standing inventory in other areas, including Las Vegas and Arizona, so they’re cutting costs across the board to save their overall bottom line. Standing inventory in West Creek and West Hills in Valencia is very low (almost none), as compared to 100’s of homes in these other areas.

[Edit: Lennar apparently had some miscommunication between corporate and their local offices, and the SOLARplus package is being offered to all Patina phases after all.]