Beacon Park
- Thread starter The I-R-V
- Start date
NEW -> Contingent Buyer Assistance Program
I think the buyer pool in the mid-$1Ms is so thin. At $1.5M with $10K in mello roos, your household income needs to be above $300K to finance 80% for 30 years at 4%. I don't know what percentage of prospective Irvine buyers meet that qualification, but it probably places you in the top 3% of earning households nationwide.
Maybe if you're already an Irvine homeowner, you can parlay hundreds of thousands of equity in your current house to move-up on a lower household income. That probably places you well above your 40s. Is this really the time of your life to take on that much more debt and $10K in mello roos?
I know Irvine has bucked these stats for the last few years, but there is a ceiling. The Ability to Repay rules have made the ceiling less elastic too. Even if a $250K household has 20% to put down on a $1.5M Beacon Park house, the interest-only and/or negative amortization loans are not available to allow them to over-extend themselves.
Got it. For some reason, I thought he was going a different direction with his comment. Four projects in the $1.5M+ range after design center? Maybe 5 if you include largest Larkspur?
And no double mello? I'm disappointed in you - had my shot for today all ready!
I think in this current market, where prices are stagnating and uncertainty exists around rates (which could further impact pricing), you don't have a lot of incentive to jump in (if you are move up buyer) unless you find the perfect home (and from talking to sales people...it seems like a much greater percentage of buyers in the new SFR class are looking for their "perfect" home and less willing to buy the first plan they like in their price range on whatever "blah" lot exists). Exception is if you are a relocate buyer or looking to be a first time homeowner (hence why you are still seeing the smaller product still sell..as those cater to the first time home buyer). I do think with the top end of the market starting to stall, you'll see a trickle down effect, but the market is working a little different then years past since the lower end has benefited from the younger generation who sat of the housing and were negatively impacted by the recession finally stepping into the market (with a long term view...having started a family or close to starting a family).
Only SFR to totally blow out at the higher price margins is Strada, which is the lowest price SFR in the most premium non Hidden Canyon neighborhood (if you polled 10 people and asked them to pick, if price were equal, I hypothesize OH would win).
As I continue to ramble...if you really look at it, the ceiling seems to be on that true SFR $1M number (~2300-3000 sqft). The stuff that has gotten above that has largely sold slower, while the stuff close to that delta has done pretty well (CV sold its stuff pretty quick and consistent and Richmond has sold its product in Stonegate like hotcakes being the lowest price SFR on the block...especially when they first released).
In my opinion even a household with a 300K income should not be buying a 1.5M dollar house in beacon park. Even with a 20% down, the PITI + HOA here will be near 8,500 a month. After mortgage tax savings, the house may cost about 7200 a month. However this doesnt take into consideration maintenance costs nor costs to furnish, landscape, etc. We all know a house will cost more than we expect... Plus the mortgage deductions will get smaller and smaller every year...
With a 300K yearly income, a household will likely net about 15K a month take home after taxes. SO that house will eat up half of your take home. If you want to put in for retirement, college savings, a vacation here or there, a new car, dinners, piano lessions for little baby, etc, etc I cant imagine there will be much left for savings... Perhaps I am too conservative, but I wouldnt feel comfortable knowing I didnt have much room for error...
Agreed. There are a lot of things you want to accomplish at every income level, and paying half of your net income on a house every month isn't a wise plan.
I think the PITIA would be just under $8K in this scenario, and the effective payment closer to $6,600. The property tax and mello roos won't effectively be deductible due to the AMT, and the mortgage interest is only deductible on the first $1M of mortgage indebtedness. But still, that income puts you in a 35% marginal IRS rate and 9.3% FTB rate. So the tax adjustment is pretty big - nearly $1,400 in this context, at least to start!
I was just counting w2 man.
Pbr/nbr will come back. It's oil, the black blood of Allah
Perspective
Well-known member
bones said:
I think the buyer pool in the mid-$1Ms is so thin. At $1.5M with $10K in mello roos, your household income needs to be above $300K to finance 80% for 30 years at 4%. I don't know what percentage of prospective Irvine buyers meet that qualification, but it probably places you in the top 3% of earning households nationwide.
Maybe if you're already an Irvine homeowner, you can parlay hundreds of thousands of equity in your current house to move-up on a lower household income. That probably places you well above your 40s. Is this really the time of your life to take on that much more debt and $10K in mello roos?
I know Irvine has bucked these stats for the last few years, but there is a ceiling. The Ability to Repay rules have made the ceiling less elastic too. Even if a $250K household has 20% to put down on a $1.5M Beacon Park house, the interest-only and/or negative amortization loans are not available to allow them to over-extend themselves.
Perspective said:
Got it. For some reason, I thought he was going a different direction with his comment. Four projects in the $1.5M+ range after design center? Maybe 5 if you include largest Larkspur?
And no double mello? I'm disappointed in you - had my shot for today all ready!
I think you a spot on. That said, while people might quality at those amounts, I'm sure plenty would want to make more than that if they were going to buy that size house. If I were going to 1.5 (I'd want to make at least 400-500K and be putting at least 30% down and still have significant reserves for landscaping / other options). I certainly wouldn't be comfortable at 1.5 with those mella's at 300K. Then again, I'm conservative, but 5 times gross income seems on the high side (especially when you factor in the mella). I suppose it is doable and I'd be interested in what the average Irvine resident's income to house ratio is, but you aren't going to being saving near as much for retirement, kids college, etc, with a ratio of 5 to 1.Perspective said:
I think in this current market, where prices are stagnating and uncertainty exists around rates (which could further impact pricing), you don't have a lot of incentive to jump in (if you are move up buyer) unless you find the perfect home (and from talking to sales people...it seems like a much greater percentage of buyers in the new SFR class are looking for their "perfect" home and less willing to buy the first plan they like in their price range on whatever "blah" lot exists). Exception is if you are a relocate buyer or looking to be a first time homeowner (hence why you are still seeing the smaller product still sell..as those cater to the first time home buyer). I do think with the top end of the market starting to stall, you'll see a trickle down effect, but the market is working a little different then years past since the lower end has benefited from the younger generation who sat of the housing and were negatively impacted by the recession finally stepping into the market (with a long term view...having started a family or close to starting a family).
Only SFR to totally blow out at the higher price margins is Strada, which is the lowest price SFR in the most premium non Hidden Canyon neighborhood (if you polled 10 people and asked them to pick, if price were equal, I hypothesize OH would win).
As I continue to ramble...if you really look at it, the ceiling seems to be on that true SFR $1M number (~2300-3000 sqft). The stuff that has gotten above that has largely sold slower, while the stuff close to that delta has done pretty well (CV sold its stuff pretty quick and consistent and Richmond has sold its product in Stonegate like hotcakes being the lowest price SFR on the block...especially when they first released).
irvinerealtor
Well-known member
A question to the 5P builders that lurk here on the blog:
How many people do you think we usually have in the shower at one time?
Those master bathroom shower sizes are out of control.
-IR2
How many people do you think we usually have in the shower at one time?
Those master bathroom shower sizes are out of control.
-IR2
Perspective said:
In my opinion even a household with a 300K income should not be buying a 1.5M dollar house in beacon park. Even with a 20% down, the PITI + HOA here will be near 8,500 a month. After mortgage tax savings, the house may cost about 7200 a month. However this doesnt take into consideration maintenance costs nor costs to furnish, landscape, etc. We all know a house will cost more than we expect... Plus the mortgage deductions will get smaller and smaller every year...
With a 300K yearly income, a household will likely net about 15K a month take home after taxes. SO that house will eat up half of your take home. If you want to put in for retirement, college savings, a vacation here or there, a new car, dinners, piano lessions for little baby, etc, etc I cant imagine there will be much left for savings... Perhaps I am too conservative, but I wouldnt feel comfortable knowing I didnt have much room for error...
Perspective
Well-known member
hello said:
Agreed. There are a lot of things you want to accomplish at every income level, and paying half of your net income on a house every month isn't a wise plan.
I think the PITIA would be just under $8K in this scenario, and the effective payment closer to $6,600. The property tax and mello roos won't effectively be deductible due to the AMT, and the mortgage interest is only deductible on the first $1M of mortgage indebtedness. But still, that income puts you in a 35% marginal IRS rate and 9.3% FTB rate. So the tax adjustment is pretty big - nearly $1,400 in this context, at least to start!
ChasingRainbows
Member
Would be interesting to know what percentage of your income goes to PITI (including HOA) for those living in new communities.
qwerty
Well-known member
ps9 said:qwerty said:our gross monthly payment (PITI + HOA) was 8% of average monthly gross wages for 2014. that is why i go to bed happy every night. but i cant afford irvine
Nice, PBR was probably higher right?
I was just counting w2 man.
Pbr/nbr will come back. It's oil, the black blood of Allah
just visited ellwood and i agree with most folks that the rooftop is a interesting idea. Anyone had concerns about possible greenhouse effect from all the windows? Overall, despite high MR, it seems great bang for your buck. Right now deciding between Laurel cypress village, strada OH and ellwood beacon park.
it is hard to get a feel for the community as everything around is construction, but given this price, i'm leaning for ellwood.
it is hard to get a feel for the community as everything around is construction, but given this price, i'm leaning for ellwood.
