New Home versus Old Home

[Mety]

In times like this, I would ask for lots of upgrades including yard/patio landscaping if you're thinking of buying new homes. I think there are more unsold remaining inventories now days.

Is there any way to track unsold inventory and get a feel for it if it is on low end?

The best way is calling them and find out. They'll walk you through everything you want to know pretty well.

One important thing is that you take your RE agent with you on the first day of visit model homes. That way you can get half (or some percentage) of their commission. The commissions are like $20,000 now days. Some agents don't share their commission since it's their right to share or not. I personally wouldn't work with those shady types.

Another good thing about new homes is they're all built with new energy efficiency materials so the utility costs will be cheaper as a result. Not too much, but still a pretty nice stuff on savings perspective. 

 

[Mety]

Andy - consider waiting to buy. We do not know the fall out of the housing market due to covid.

At this time, I will agree with eyephone about waiting.

If you don?t have to buy, you should see how everything pans out.

But I don?t know your situation so only you can make that determination.

Unbelievable! You guys are finally getting along!

 

[andy]

Andy - consider waiting to buy. We do not know the fall out of the housing market due to covid.

At this time, I will agree with eyephone about waiting.

If you don?t have to buy, you should see how everything pans out.

But I don?t know your situation so only you can make that determination.

Thank you, I can wait for sure, by renting a condo/apartment for 6-9 months or so. But considering the cost of rent about 3K/month and paying $18K-$27K, isn't it bit of a gamble? You'd hope that home prices drop more than what you pay in rent? Any thoughts?

 

[andy]

The commissions are like $20,000 now days.

Is 20K true for California Pac homes as well? Will the builder's sales office tell me the commissions if I call them and ask or will they say, "why do you want to know, that is something between us (the builder) and your RE Agent?"

In another forum, I read typical Co-op to be:
pricing at "low $700,000s" - offering broker co-op of $11,000
pricing at "low $1,000,000s" - offering broker co-op of $15,000
pricing at "mid $1,000,000s" - offering broker co-op of $15,000
pricing at "mid $1,000,000s" - offering broker co-op of $20,000
pricing at "low $2,000,000s" - offering broker co-op of $20,000

Thanks.

 

[andy]

Another good thing about new homes is they're all built with new energy efficiency materials so the utility costs will be cheaper as a result. Not too much, but still a pretty nice stuff on savings perspective.

Another good point. I am adding this to the list.

 

[irvinehomeowner]

Andy - consider waiting to buy. We do not know the fall out of the housing market due to covid.

At this time, I will agree with eyephone about waiting.

If you don?t have to buy, you should see how everything pans out.

But I don?t know your situation so only you can make that determination.

Thank you, I can wait for sure, by renting a condo/apartment for 6-9 months or so. But considering the cost of rent about 3K/month and paying $18K-$27K, isn't it bit of a gamble? You'd hope that home prices drop more than what you pay in rent? Any thoughts?

That is the reason many renters choose to buy and in normal times, something I would highly recommend someone to figure out there affordability and decide from there.

The problem right now is the uncertainty of the economy (and thus housing) due to Covid. If your situation is stable, you think you can handle a downturn for the next few years, and can stay in your home for 5+ or even 10+ years... then you may have a case to buy.

I haven't been pricing out real estate recently... have prices dropped to a point where you feel you will get a deal now that won't be there later?

 

[marmott]

Is 20K true for California Pac homes as well? Will the builder's sales office tell me the commissions if I call them and ask or will they say, "why do you want to know, that is something between us (the builder) and your RE Agent?"

Andy, you should talk offline to USCTrojanCPA if you don't already have an agent. He was a great resource for us when we bought our first SFH in Irvine and he is very transparent when it comes to commission sharing. He also helped us buy and sell other properties afterwards with top notch service.

 

[Liar Loan]

I've said it before and I'll say it again, without a significant increase in inventory level we won't see any material price declines in Irvine.

There you go LL... USC is Team Irvine.

Sorry, he said he was on Team Data.

USC's numbers show:  April 2018 > April 2019 > April 2020

Yeah, if you compare April to December you will distort things on a seasonal basis and get the cherry-picked result you are seeking.  Comparing the same month year-over-year shows a decline for two straight years. 

Spring is supposedly the "hot selling season" when new higher home prices are supposed to be set.  Not so much in Irvine.

I haven't been pricing out real estate recently... have prices dropped...?

Thanks for your candid admission.

 

[Cares]

The commissions are like $20,000 now days.

Is 20K true for California Pac homes as well? Will the builder's sales office tell me the commissions if I call them and ask or will they say, "why do you want to know, that is something between us (the builder) and your RE Agent?"

In another forum, I read typical Co-op to be:
pricing at "low $700,000s" - offering broker co-op of $11,000
pricing at "low $1,000,000s" - offering broker co-op of $15,000
pricing at "mid $1,000,000s" - offering broker co-op of $15,000
pricing at "mid $1,000,000s" - offering broker co-op of $20,000
pricing at "low $2,000,000s" - offering broker co-op of $20,000

Thanks.

Co-op amount varies by community in Irvine. It isn't a straight percentage of purchase price but a flat fee like you mentioned of $20,000 which usually falls between 2-3% of purchase price. CalPac mostly falls right round $20k for all their communities in Irvine.

 

[usctrojancpa]

The commissions are like $20,000 now days.

Is 20K true for California Pac homes as well? Will the builder's sales office tell me the commissions if I call them and ask or will they say, "why do you want to know, that is something between us (the builder) and your RE Agent?"

In another forum, I read typical Co-op to be:
pricing at "low $700,000s" - offering broker co-op of $11,000
pricing at "low $1,000,000s" - offering broker co-op of $15,000
pricing at "mid $1,000,000s" - offering broker co-op of $15,000
pricing at "mid $1,000,000s" - offering broker co-op of $20,000
pricing at "low $2,000,000s" - offering broker co-op of $20,000

Thanks.

Here are the broker co-ops for the CalPac communities...

Talisa - $27,500
Montara - $25,000
Celeste - $23,500
Tristania - $24,000

So the broker co-op translates to around 3% of the average sales price of the community. 

 

[irvinehomeowner]

I've said it before and I'll say it again, without a significant increase in inventory level we won't see any material price declines in Irvine.

There you go LL... USC is Team Irvine.

Sorry, he said he was on Team Data.

USC's numbers show:  April 2018 > April 2019 > April 2020

Yeah, if you compare April to December you will distort things on a seasonal basis and get the cherry-picked result you are seeking.  Comparing the same month year-over-year shows a decline for two straight years. 

Good thing you're not in data analysis. Just look at your own graph and the *data* says prices have not been lower than the low in 2018. Why are you not talking about that? You keep dancing around your own graph... it's hilarious.

 

[andy]

Here are the broker co-ops for the CalPac communities...
Talisa - $27,500
Montara - $25,000
Celeste - $23,500
Tristania - $24,000
So the broker co-op translates to around 3% of the average sales price of the community.

USCTrojanCPA- really like your attention to detail and transparency. Thanks!

 

[usctrojancpa]

Here are the broker co-ops for the CalPac communities...
Talisa - $27,500
Montara - $25,000
Celeste - $23,500
Tristania - $24,000
So the broker co-op translates to around 3% of the average sales price of the community.

USCTrojanCPA- really like your attention to detail and transparency. Thanks!

Happy to help, it does pay to have a good memory too.  haha

 

[andy]

Also, attached is a cost comparison schedule

Martin, in the excel sheet you attached, you are using 0.1% the cost of the house for the annual insurance.
Is this reasonable estimate for insurance in Irvine or can it be higher. Does it depend on SFR versus an attached/detached condo?

 

[Dr. CA Real Estate]

Included Appliances and landscaping depends on the specific collection and sometimes even floorpan.

 

[Mety]

You shouldn?t pay more than $500 a year for condos insurance. SFR insurance will be a little bit more in general, but you pay less or no HOA fees so it evens out.

 

[freedomcm]

FWIW, case chiller during the last global pandemic:
Dec 1, 1922 92.76
Dec 1, 1921 89.37
Dec 1, 1920 81.52
Dec 1, 1919 76.34
Dec 1, 1918 79.52
Dec 1, 1917 90.03

 

[irvinehomeowner]

FWIW, case chiller during the last global pandemic:
Dec 1, 1922 92.76
Dec 1, 1921 89.37
Dec 1, 1920 81.52
Dec 1, 1919 76.34
Dec 1, 1918 79.52
Dec 1, 1917 90.03

So based on this, it took about 3+ years for housing to recover after the 1918 flu.

I don't think that it will take that long in today's more connected society... if science is able to create vaccines/treatments... I think the economy will bounce back within a year if not less.

 

[usctrojancpa]

In times like this, I would ask for lots of upgrades including yard/patio landscaping if you're thinking of buying new homes. I think there are more unsold remaining inventories now days.

Is there any way to track unsold inventory and get a feel for it if it is on low end?

The best way is calling them and find out. They'll walk you through everything you want to know pretty well.

One important thing is that you take your RE agent with you on the first day of visit model homes. That way you can get half (or some percentage) of their commission. The commissions are like $20,000 now days. Some agents don't share their commission since it's their right to share or not. I personally wouldn't work with those shady types.

Another good thing about new homes is they're all built with new energy efficiency materials so the utility costs will be cheaper as a result. Not too much, but still a pretty nice stuff on savings perspective. 

Plus builders are putting in solar for SFR homes now.

 

[usctrojancpa]

Andy - consider waiting to buy. We do not know the fall out of the housing market due to covid.

At this time, I will agree with eyephone about waiting.

If you don?t have to buy, you should see how everything pans out.

But I don?t know your situation so only you can make that determination.

Thank you, I can wait for sure, by renting a condo/apartment for 6-9 months or so. But considering the cost of rent about 3K/month and paying $18K-$27K, isn't it bit of a gamble? You'd hope that home prices drop more than what you pay in rent? Any thoughts?

Prices even on the lower end will probably be flattish for the next 6-12 months so focus on finding the right home as market prices won't get away from you.