The high-profile 196-acre Marblehead project in coastal Southern California San Clemente is down to four finalists, all home builders, after 11 entities submitted their bids this past Wednesday.

Word is, one of the four bidders--a joint bid by Standard Pacific and Brookfield Residential, and three individual offers from Taylor Morrison Homes, The New Home Company, and Toll Brothers--will win the 300-plus lot site for what informed observers could range from $210 million to $230 million. A winner could emerge as early as Tuesday of next week.

This piece from Bloomberg's Nadja Brandt lays out the basics of the tract, and the 15-year story behind its coming to market.

Lehman Brothers Holdings Inc. is seeking to sell 196 acres (79 hectares) of California coastal land that has approvals for residential development and was the subject of a legal fight.

Bids for the Orange County land known as Marblehead Coastal, which has 308 entitled home lots, are due by Jan. 15, according to Terry Ruckle, a principal at Irvine, California-based Land Advisors Organization, which is brokering the sale for Lehman. He declined to say how much the New York-based company expects to get for Marblehead.

One of the executives whose company is active in the bidding said, "I think the pricing is getting a little silly."

Marblehead is a poster-child for how select tracts may actually sell for more than it should from a real estate valuation standpoint, simply by virtue of the need for builders who compete in the highly constrained coastal California markets to outbid one another.

"The deal may 'pencil,'" said the executive with knowledge of the bidding, "but are you going to make any money?"

Toll Brothers, Brookfield, and Standard Pacific all played big roles in bidding for--and in Toll's case winning--the enormous land parcels in the Shapell and Weyerhaeuserhome building portfolio for $1.6 billion and $2.7 billion respectively.

Toll's victory in the Shapell deal was for about $307,000 per lot, whereas, at $210 million, the per-lot cost for Marblehead would be more on the order of over $600k.

While we feel it's off-base to talk about a "real estate bubble," it's clear that frothiness at a submarket level has driven lot prices above where fundamentals suggest they should be.

Are you seeing land bubbles in your markets, particularly in land-constrained areas at a submarket level?

Learn more about markets featured in this article: Los Angeles, CA.