Having Davis annexed with several hundred lots and associated water/sewer taps is on its face a great benefit to Davis. Increased tax revenue to the Town, and eventually more community benefit. I've watched as the first hundred lots sold for approx $100K each, mostly to investors in faraway states. For the small size of the lots I felt all along that the price point was about 30% higher than the comps support. What a phenomenon! Then 8 months went by with only one closing....could this be reality setting in? Well, a couple of weeks ago I received a promo email saying that now Tuscan Ridge was slashing its prices by 25-30%. A week or two later I received another email saying Tuscan Ridge's owner, North American Land Co, had merged with Waterfront Group, who would now be marketing the lots.
But what about the people who just bought? Dozens of these lots are now back out on the market with asking prices from $125-175K! But not a bite occurs....Meanwhile Tuscan Ridge is 'on sale' at up to 30% off. Ouch!
I have little sympathy for "investors" who are basically speculators, ie "flippers." But people who are buying property to use for themselves should have some protection from this hype-and-dump approach. They at least should be offered a guaranty or insurance option that would protect them from the developer's discounting (ie dumping) within a certain time period. And perhaps North American Land Co offered buyers some protection against developer discounting on out-phases. There are several dozen angry people out there who bought to flip in Tuscan Ridge and are now watching the developer incentives and discounts turning their hopes to losses.
My point here is not to bust on North American Land (now Waterfront Group), but to use their example to make a point. Buyers need to be offered protection against subsequent developer discounting. It may be an optional price insurance policy or better yet, a built-in feature of the sale contract. If you are an early buyer in a CV area development, ask what protection you have if developer starts discounting comparable lots or homes in later phases of the same project.
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As of July 23 there seem to be several Tuscan resales on the market for 49-59K. I believe there have been zero resales so far, and not one house has started construction. In my opinion average Tuscan lots were and are worth 40-50K in phases where there are no questions of water/sewer access.
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