San Francisco CA here.
I have another question, is there anyone else out here in the Bay Area that I could compare pricing with? Stevens Creek is saying +5k over MSRP and that Dodge just exercised their right to raise the MSRP by 1.4k.
Sounds like pure B.S. to me. Salesmen are weasels. You need to get facts and call him on it. I can tell you that if you have facts on your side and threaten the dealership's reputation you will probably win. There is nothing more important to a dealership than a "good reputation", and if you catch them in an outright lie and call them on it, they will almost always capitulate.
I had a friend do this successfully when buying a car. He had another friend who was a dealer look up what they paid at auction for the car he wanted. He began haggling and was able to catch the salesman lying about their cost (the guy inflated it by several $1000 no less), he called him on it and was able to then negotiate from cost up w/o any more B.S.
It sounds like they're doubling their hold back and taking you for a ride on top of that.
MSRP is about 8% profit already--about $3500. Add another $5k and that takes it to over 20% profit. That is just ludicrous these days. He should be thankful just to get the 3% from invoice. Especially where you ordered it--no salesman had to work to make the sale, and they don't have to use up any lot space since you'll presumably pick it up the day it's delivered.. they aren't really doing anything to even earn it, IMO. Furthermore, if you finance it, there's profit built into that already as well.