Orchard Hills - Capella by Taylor Morrison

[Perspective]

Gulp. Your home you live in isn't an investment. It's a consumable item with a forced-savings feature that might result in a net gain over a long holding period; which will just be converted into another higher-priced house, unless you move to a lower cost locale.

Long-term liquid asset, absolutely not, but it is still the largest financial investment you'll make (in most cases) so it is important to be not only comfortable with the cost but comfortable with the long-term prognosis of what will happen with that asset.

Just cause you can afford it, doesn't always make it a good purchase. All that said, I think long-term, housing is still a good purchase, but I have more questions now then I would have 10 years ago given that we are going to be in a longer term raising rate scenario (vs. the long term declining scenario we were in for a long time). That said, I don't think this rate rising era will be as strong as the previous one.

Most people throw "investment" around when discussing their primary home because they either don't understand how poor the historical return on houses is relative to other options (S&P500 index fund), or they want to justify over-extending themselves (pushing their DTIs to the limit and/or putting all of their non-retirement savings into the downpayment).

 

[Laguna21]

Gulp. Your home you live in isn't an investment. It's a consumable item with a forced-savings feature that might result in a net gain over a long holding period; which will just be converted into another higher-priced house, unless you move to a lower cost locale.

Long-term liquid asset, absolutely not, but it is still the largest financial investment you'll make (in most cases) so it is important to be not only comfortable with the cost but comfortable with the long-term prognosis of what will happen with that asset.

Just cause you can afford it, doesn't always make it a good purchase. All that said, I think long-term, housing is still a good purchase, but I have more questions now then I would have 10 years ago given that we are going to be in a longer term raising rate scenario (vs. the long term declining scenario we were in for a long time). That said, I don't think this rate rising era will be as strong as the previous one.

Most people throw "investment" around when discussing their primary home because they either don't understand how poor the historical return on houses is relative to other options (S&P500 index fund), or they want to justify over-extending themselves (pushing their DTIs to the limit and/or putting all of their non-retirement savings into the downpayment).

Didn't a La Vita home just sell for cash, and appreciate over 400K in less than a year? I don't know about you, but I call that a pretty good turnaround.

And with interest rates being so extraordinarily low, locking it in for 30 years, and paying it off is a pretty damn good investment for the long-term IMO.

Now buying a home, and renting it out? Different story, and would consider areas where rents are sky high and the demand continues like San Francisco, and NYC.

 

[Irvine or Bust]

We visited Orchard Hills yesterday, and went to Capella, La Vita, and Saviero. We also looked at Strada. Definitely prefer the Groves over the non-gated side. La Vita was our favorite, but i also don't think Capella's neighborhood was that bad. Their floor plans are superb, and the homes are beautiful.

I think once OH sells out, there's some nice potential for appreciation on all Groves homes. Having looked at quite a few areas in Irvine, and being new to looking, OH is definitely one of our favorite areas.

@ Laguna21...funny you mentioned the groves, I was there this weekend. Had to check out La Vita and Capella since everyone on this site keeps brining them up. Was that you driving the black on black Maserati? Saw it sitting in the Capella parking lot. If so, nice ride. I like the Capella floorplans. Someone mentioned ugly street design..I don't get what's behind that comment, seems like a normal street to me. In fact, the streets seem to be wider than alot of the newer neighborhoods. I thought both developments are nice. La Vita's price point is pretty high, but theres nothing I've seen so far like it. Plan 4 was my favorite. That deep drive way and the views, pretty awesome. Not to mentione the nice front landsacpe you get from the builder.

 

[Laguna21]

We visited Orchard Hills yesterday, and went to Capella, La Vita, and Saviero. We also looked at Strada. Definitely prefer the Groves over the non-gated side. La Vita was our favorite, but i also don't think Capella's neighborhood was that bad. Their floor plans are superb, and the homes are beautiful.

I think once OH sells out, there's some nice potential for appreciation on all Groves homes. Having looked at quite a few areas in Irvine, and being new to looking, OH is definitely one of our favorite areas.

@ Laguna21...funny you mentioned the groves, I was there this weekend. Had to check out La Vita and Capella since everyone on this site keeps brining them up. Was that you driving the black on black Maserati? Saw it sitting in the Capella parking lot. If so, nice ride. I like the Capella floorplans. Someone mentioned ugly street design..I don't get what's behind that comment, seems like a normal street to me. In fact, the streets seem to be wider than alot of the newer neighborhoods. I thought both developments are nice. La Vita's price point is pretty high, but theres nothing I've seen so far like it. Plan 4 was my favorite. That deep drive way and the views, pretty awesome. Not to mentione the nice front landsacpe you get from the builder.

Haha, I wish! Defo don't drive a black Maserati, but one can dream right?

I agree with regards to the street design on Capella - I think once the Groves sell out, all of the homes in the Groves will fetch a nice price.

La Vita plan 4 was our favorite for sure! The motor court wasn't as big a turn-off as I thought it would.

@Perspective: With regards to your comment about "throwing" the term investment around. Definitely not the case here, I come from a family of real estate investors, and landlords, none of which came from wealth, and all of whom worked extremely hard pinching their pennies, and investing in real estate. A home is an excellent return on investment over a long period of time, and with interest rates being so low, it's a real no-brainer. I've seen it with my own eyes.

 

[woodburyowner]

Someone mentioned ugly street design..I don't get what's behind that comment, seems like a normal street to me. In fact, the streets seem to be wider than alot of the newer neighborhoods.

I also went this past weekend just to get an updated feel of how the neighborhood is.  You didn't notice how crowded Bridle Path was?  It seemed like every possible street parking spot was taken!  To understand the "poor" street design, take a look at the Capella area with Google maps.  Every street is like a main street.  There really are no secondary streets with cul de sacs which would help space out the homes.  There are even some homes that are on motor courts (or something very similar)!  This further reduces the number of street parking available. 

I got to hand it to TMO though.  They really did a good job of packing in all the houses in this small parcel of land. 

 

[Perspective]

Shiller's and others' data suggest otherwise. The historical average return on US houses is just a point or two above the inflation rate. The rate of return on equities is much better. Past performance isn't necessarily indicative of future results though.

 

[Bullsback]

Shiller's and others' data suggest otherwise. The historical average return on US houses is just a point or two above the inflation rate. The rate of return on equities is much better. Past performance isn't necessarily indicative of future results though.

You do need to factor in leverage though as leverage helps give you a far greater return on investment then just the overall increase. Now as you lose that leverage, then the case in point remains, but it is nice to not have your own personal residence leveraged (I sure look forward to the day I don't have to make any mortgage payments and in my current place am getting close to the point where my mella roos will stop too ). 

 

[OC troll]

Someone mentioned ugly street design..I don't get what's behind that comment, seems like a normal street to me. In fact, the streets seem to be wider than alot of the newer neighborhoods.

I also went this past weekend just to get an updated feel of how the neighborhood is.  You didn't notice how crowded Bridle Path was?  It seemed like every possible street parking spot was taken!  To understand the "poor" street design, take a look at the Capella area with Google maps.  Every street is like a main street.  There really are no secondary streets with cul de sacs which would help space out the homes.  There are even some homes that are on motor courts (or something very similar)!  This further reduces the number of street parking available. 

I got to hand it to TMO though.  They really did a good job of packing in all the houses in this small parcel of land.

Just curious, why would you revisit a development knowing how much you dislike it. I don't think the street designs are gonna change anytime soon.

 

[woodburyowner]

Someone mentioned ugly street design..I don't get what's behind that comment, seems like a normal street to me. In fact, the streets seem to be wider than alot of the newer neighborhoods.

I also went this past weekend just to get an updated feel of how the neighborhood is.  You didn't notice how crowded Bridle Path was?  It seemed like every possible street parking spot was taken!  To understand the "poor" street design, take a look at the Capella area with Google maps.  Every street is like a main street.  There really are no secondary streets with cul de sacs which would help space out the homes.  There are even some homes that are on motor courts (or something very similar)!  This further reduces the number of street parking available. 

I got to hand it to TMO though.  They really did a good job of packing in all the houses in this small parcel of land.

Just curious, why would you revisit a development knowing how much you dislike it. I don't think the street designs are gonna change anytime soon.

I haven't been back to Capella in probably 10 months and I wanted to see the newly listed resale property because of the larger lot size.  I've already mentioned what I liked and disliked about the Capella tract and one of the show stopper issues for me was the lot size.  However, the 4500 sq ft lot size with only a single neighbor and the potential lower price drew me back to this tract to at least have a look again.

The street design was poor when I saw it 10 months ago, but it's hard to imagine what it really means until you see the community more built out and people living there.  Going back this past weekend answered this question. 

I would still be interested in this resale property, but the price would have to be at least 100k lower.

 

[Laguna21]

Someone mentioned ugly street design..I don't get what's behind that comment, seems like a normal street to me. In fact, the streets seem to be wider than alot of the newer neighborhoods.

I also went this past weekend just to get an updated feel of how the neighborhood is.  You didn't notice how crowded Bridle Path was?  It seemed like every possible street parking spot was taken!  To understand the "poor" street design, take a look at the Capella area with Google maps.  Every street is like a main street.  There really are no secondary streets with cul de sacs which would help space out the homes.  There are even some homes that are on motor courts (or something very similar)!  This further reduces the number of street parking available. 

I got to hand it to TMO though.  They really did a good job of packing in all the houses in this small parcel of land.

Just curious, why would you revisit a development knowing how much you dislike it. I don't think the street designs are gonna change anytime soon.

I haven't been back to Capella in probably 10 months and I wanted to see the newly listed resale property because of the larger lot size.  I've already mentioned what I liked and disliked about the Capella tract and one of the show stopper issues for me was the lot size.  However, the 4500 sq ft lot size with only a single neighbor and the potential lower price drew me back to this tract to at least have a look again.

The street design was poor when I saw it 10 months ago, but it's hard to imagine what it really means until you see the community more built out and people living there.  Going back this past weekend answered this question. 

I would still be interested in this resale property, but the price would have to be at least 100k lower.

I highly doubt the price will drop any lower. We looked at that one last weekend along with La Vita homes, and for all the upgrades you're getting plus the larger lot, and the yard being complete, & only one neighbor, the price is pretty aggressive already. Especially when you compare the price per square foot on pending and recently sold homes in Capella who's yards aren't complete, and don't have all the upgrades this one has.

If we had our pick of OH, we prefer La Vita above all, but this home appears to be priced well.

Will be interesting to see what the final sale price is or if it gets pulled off the market. Given how the market is right now, if I were that seller, I'd probably take it off the market and wait a few years, and just rent it out - once OH sells out, & the neighborhood looks more developed, prices on the Groves side should fetch a nice price.

 

[AW]

Someone make an offer at $1.4m as final and best offer and see if they'll accept?
I know job relo was mentioned, what if they needed the $ for a house wherever they moved to and maybe the company may cover the difference as relo package?

 

[hello]

Someone make an offer at $1.4m as final and best offer and see if they'll accept?
I know job relo was mentioned, what if they needed the $ for a house wherever they moved to and maybe the company may cover the difference as relo package?

why start at 1.4M?  I would start even lower.  I doubt there are any other offers on the table...

 

[hello]

Someone mentioned ugly street design..I don't get what's behind that comment, seems like a normal street to me. In fact, the streets seem to be wider than alot of the newer neighborhoods.

I also went this past weekend just to get an updated feel of how the neighborhood is.  You didn't notice how crowded Bridle Path was?  It seemed like every possible street parking spot was taken!  To understand the "poor" street design, take a look at the Capella area with Google maps.  Every street is like a main street.  There really are no secondary streets with cul de sacs which would help space out the homes.  There are even some homes that are on motor courts (or something very similar)!  This further reduces the number of street parking available. 

I got to hand it to TMO though.  They really did a good job of packing in all the houses in this small parcel of land.

Just curious, why would you revisit a development knowing how much you dislike it. I don't think the street designs are gonna change anytime soon.

I haven't been back to Capella in probably 10 months and I wanted to see the newly listed resale property because of the larger lot size.  I've already mentioned what I liked and disliked about the Capella tract and one of the show stopper issues for me was the lot size.  However, the 4500 sq ft lot size with only a single neighbor and the potential lower price drew me back to this tract to at least have a look again.

The street design was poor when I saw it 10 months ago, but it's hard to imagine what it really means until you see the community more built out and people living there.  Going back this past weekend answered this question. 

I would still be interested in this resale property, but the price would have to be at least 100k lower.

I highly doubt the price will drop any lower. We looked at that one last weekend along with La Vita homes, and for all the upgrades you're getting plus the larger lot, and the yard being complete, & only one neighbor, the price is pretty aggressive already. Especially when you compare the price per square foot on pending and recently sold homes in Capella who's yards aren't complete, and don't have all the upgrades this one has.

If we had our pick of OH, we prefer La Vita above all, but this home appears to be priced well.

Will be interesting to see what the final sale price is or if it gets pulled off the market. Given how the market is right now, if I were that seller, I'd probably take it off the market and wait a few years, and just rent it out - once OH sells out, & the neighborhood looks more developed, prices on the Groves side should fetch a nice price.

Trust me on this one...  you will be losing money renting this out.  Furthermore, your strategy is betting on future appreciation, which seems bleak at best right now.  You will lose money while renting while risking future depreciation. 

 

[Perspective]

Orchard Hills has two more villages planned. So waiting for it to fully develop so that inventory is low, and presumably prices higher, could take many years.

 

[Laguna21]

Given how Irvine has been trending in recent years, I think OH will continue to appreciate after it's sold out.

Also, have people forgotten about the La Vita home that sold for over 400K in cash above the original sale price? Is that not phenomenal? Isolated incident? Perhaps, but still phenomenal nonetheless.

There's always going to be downturns, and periods of lull, but the next few years could be different. Who knows 100%, otherwise we'd all be rich if we could predict the market fluctuations that easily.

 

[hello]

Given how Irvine has been trending in recent years, I think OH will continue to appreciate after it's sold out.

Also, have people forgotten about the La Vita home that sold for over 400K in cash above the original sale price? Is that not phenomenal? Isolated incident? Perhaps, but still phenomenal nonetheless.

There's always going to be downturns, and periods of lull, but the next few years could be different. Who knows 100%, otherwise we'd all be rich if we could predict the market fluctuations that easily.

You are 100% correct.  No one really knows.  But what is clear is that the couple months have shown a slowdown in the market to the point where we are seeing price drops now.  Therefore your play for appreciation is a foolish thing to do right now, especially in this particular housing track.

 

[Laguna21]

Given how Irvine has been trending in recent years, I think OH will continue to appreciate after it's sold out.

Also, have people forgotten about the La Vita home that sold for over 400K in cash above the original sale price? Is that not phenomenal? Isolated incident? Perhaps, but still phenomenal nonetheless.

There's always going to be downturns, and periods of lull, but the next few years could be different. Who knows 100%, otherwise we'd all be rich if we could predict the market fluctuations that easily.

You are 100% correct.  No one really knows.  But what is clear is that the couple months have shown a slowdown in the market to the point where we are seeing price drops now.  Therefore your play for appreciation is a foolish thing to do right now, especially in this particular housing track.

I didn't say Capella in particular would appreciate, I said the "Groves"

Let me ask you this - where else in the Groves besides Capella have there been price drops?

Sure there are price drops in other areas, but there's also a decline in home purchases in this particular price range.

La Vita seems to be selling at a pace that's unstoppable. So your remark about the recent discounts on homes, while somewhat informed, is not entirely accurate, and really depends on a multitude of factors.

 

[Laguna21]

PS: did a quick google search, and looks like that home on bridle is up for rent. Definitely a more wise decision than trying to sell it in this market now.
http://www.realtor.com/realestateandhomes-detail/135-Bridle-Path_Irvine_CA_92602_M13683-37313

 

[hello]

PS: did a quick google search, and looks like that home on bridle is up for rent. Definitely a more wise decision than trying to sell it in this market now.
http://www.realtor.com/realestateandhomes-detail/135-Bridle-Path_Irvine_CA_92602_M13683-37313

We know the house was purchased for 1.464.  Assuming a rate of about 4% and a 20% down, the PITI on this house will be about $7200 a month.  Its costs the owner 7200 a month to own this house (without adding insurance, maintenance and all other costs of owning a house).  Lets assume a 43% marginal tax rate (fed and state) and the owners will likely save about 1600 a month on mortgage deduction.  This house is listed for 5,500\ a month.  Assuming they get the full amount (which often is not the case), it still leaves them negative.  If you add vacancies, cap ex, maintenance costs, bad tenant issues, realtor fees its gets even worse.  It doesnt makes sense to rent out a house that costs you more to own. 

Your only angle on renting now and selling later is a play on appreciation.  Unfortunately your own comment suggests the market is soft now.  Whats makes you think it will get better any time soon, especially with rates going up and economy being so soft?  Sometimes its better to cut your losses and run.  These people bought at a high and now are forced to sell as the market is softening.  If they were going to stay in the house, it wouldnt have been an issue.  Unfortunately its not the case.
Sorry man you drank the kool-aid.  Your type of thinking is probably what got a lot of people in trouble in the mid 2000's.

In all honesty I dont know how you think its definitely more wise to rent and try to sell later...

 

[hello]

Given how Irvine has been trending in recent years, I think OH will continue to appreciate after it's sold out.

Also, have people forgotten about the La Vita home that sold for over 400K in cash above the original sale price? Is that not phenomenal? Isolated incident? Perhaps, but still phenomenal nonetheless.

There's always going to be downturns, and periods of lull, but the next few years could be different. Who knows 100%, otherwise we'd all be rich if we could predict the market fluctuations that easily.

You are 100% correct.  No one really knows.  But what is clear is that the couple months have shown a slowdown in the market to the point where we are seeing price drops now.  Therefore your play for appreciation is a foolish thing to do right now, especially in this particular housing track.

I didn't say Capella in particular would appreciate, I said the "Groves"

Let me ask you this - where else in the Groves besides Capella have there been price drops?

Sure there are price drops in other areas, but there's also a decline in home purchases in this particular price range.

La Vita seems to be selling at a pace that's unstoppable. So your remark about the recent discounts on homes, while somewhat informed, is not entirely accurate, and really depends on a multitude of factors.

I dont follow any homes there so I cant say if there are other price drops.  However all of the other non-cappella homes in the groves listed on redfin seem like they have been sitting on the MLS for MONTHS. 

Yes, there are price drops in Irvine as well as a big decline in home purchases.  Decreased volume usually precedes price drops.  Something to consider.