Orchard Hills - Strada by Irvine Pacific

[bones]

Will be interesting to see Strada resales in the next year or 2.  Looks like some of you are already in for nearly $1.2M after upgrades and landscaping.  Not sure how much profit is left to be had when all is said and done.

I suppose if you plan to live there 10-15 years then it's worth it.

That's the problem with a lot of these new homes over $1m. Not just orchard hills. Buy for $1m+.  Throw in $150k-250k all in at the design center/landscape/after COE stuff/windows/etc. Have to sell for a big number to get a worthwhile profit.  That's why if you aren't a FCB investor/flipper, you're in it for the long haul unless you have to sell (relocation, divorce, etc). A lot of the resales in PP are relocation sales - the sagewood on fieldwood, one of the springhouses, and maybe that rosemist that just went pending. The sagewood on fieldwood that just closed was a divorce sale (at least that's the rumor).

 

[Perspective]

Will be interesting to see Strada resales in the next year or 2.  Looks like some of you are already in for nearly $1.2M after upgrades and landscaping.  Not sure how much profit is left to be had when all is said and done.

I suppose if you plan to live there 10-15 years then it's worth it.

"Profit"? Is this an investment? I'm not buying a house to make a profit. I certainly hope not to lose money over the long term, and I hope the value/price minimally tracks inflation. But that's about it.

There was a Plan 3 on Cherokee that rented within a day or two asking $5K a couple months ago. If your purchase price is $1,250,000, financing 80% at 4%, then your income qualifying you for this loan will put you in the 40%+ marginal rate range (IRS+FTB). Your net housing cost should be right around $5K. I only reduce the mortgage interest in this calculation, not the property taxes, because the AMT effectively negates their deduct-ability.

 

[OC troll]

Will be interesting to see Strada resales in the next year or 2.  Looks like some of you are already in for nearly $1.2M after upgrades and landscaping.  Not sure how much profit is left to be had when all is said and done.

I suppose if you plan to live there 10-15 years then it's worth it.

I think in the later phases it might be $1.3M all in.

 

[Perspective]

Will be interesting to see Strada resales in the next year or 2.  Looks like some of you are already in for nearly $1.2M after upgrades and landscaping.  Not sure how much profit is left to be had when all is said and done.

I suppose if you plan to live there 10-15 years then it's worth it.

I think in the later phases it might be $1.3M all in.

Phase 15 is released this weekend, and it includes some large lots in a cul-de-sac. So there will be premiums added to the base prices. Same goes for Phase 16. These next two phases include two "X" plans each, that seem to be popular despite facing the "busiest" roads in the neighborhood. Phases 17 and 18 are cul-de-sacs perched above Narrow Path, albeit not nearly as high as some earlier built homes, with two "X" plans in 18.

Long story short, I think the success of sales to date, combined with the lots and "X" plans available in the next few releases suggest pricing might continue increasing. After that, Strada moves on to the other side of the neighborhood to finish ~35% of the remaining homes. We'll see how well these will sell...

 

[aquabliss]

Will be interesting to see Strada resales in the next year or 2.  Looks like some of you are already in for nearly $1.2M after upgrades and landscaping.  Not sure how much profit is left to be had when all is said and done.

I suppose if you plan to live there 10-15 years then it's worth it.

"Profit"? Is this an investment? I'm not buying a house to make a profit. I certainly hope not to lose money over the long term, and I hope the value/price minimally tracks inflation. But that's about it.

Why yes, every home you purchase should be considered an investment whether you occupy it or not.  It's too bad that you only care about breaking even (after inflation) but most of us spend a majority of our incomes on our homes and whole heartedly consider them an investment. 

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

 

[Perspective]

I'd rather consider the home I'm buying a "forced savings account," than an "investment." Maybe this is just semantics, but I won't be disillusioned in five years when my house has "only" increased in value at a 2% annual rate; and I won't be walking-away from my mortgage if the value were to drop 30%.

 

[WTTCHMN]

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

Even at the height of the real estate bubble, I don't think anyone was flipping for $500k profit after only 2 years.

 

[Irvine Dream]

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

Even at the height of the real estate bubble, I don't think anyone was flipping for $500k profit after only 2 years.

I think some of the PP resales likely come close.

 

[bones]

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

Even at the height of the real estate bubble, I don't think anyone was flipping for $500k profit after only 2 years.

I think some of the PP resales likely come close.

They don't.

 

[qwerty]

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

im with perspective on this. do you really profit though? i know we have discussed previously, but you have to rent, time the market, get back in etc. pain in the ass. it can be done but not practical for a lot people.

 

[OHills]

No one ever expected Laguna Altura homes that were selling in the 1.1 million range to appreciate up to 1.8 million within a couple years. Although I don't expect Strada to appreciate as much as Laguna Altura, I still expect significant appreciation in the next 5 years. No where else in Irvine (besides Shady Canyon and Turtle Rock/Ridge) do you get the beautiful and unique topography. Also, Strada's location is within a 7 minute drive to the 5 freeway and even closer to the toll roads making commuting to the major employment centers (LA/Long Beach/North OC) within a reasonable driving distance. I think everyone of my friends and family who have visited Orchard Hills agree that it doesn't feel like typical OC, but rather a scenic and tranquil village in Tuscany.

 

[aquabliss]

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

Even at the height of the real estate bubble, I don't think anyone was flipping for $500k profit after only 2 years.

I'm only included that "after 2 years" part because if I didn't include that then people will post and say that "the gain is taxable unless you've occupied the property for 2 of the last 5 years".  I was trying to avoid that obvious explanation but didn't think I'd have to explain that I didn't mean you will likely profit $500k in 2 years (sigh).

 

[aquabliss]

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

im with perspective on this. do you really profit though? i know we have discussed previously, but you have to rent, time the market, get back in etc. pain in the ass. it can be done but not practical for a lot people.

Depends on place and time.  I have a friend that bought San Remo new and closed in June 2013 for $820k.  She's been in the property for 2 years and comps put her at about $1.15M.  IP even did all the backyard landscaping/irrigation in this and the trees and shrubs are good size. 

Of course all Irvine homes have increased equity from June 2013 until now but most have not increased 50% like hers has.  She could certainly sell and take that tax free "profit" and buy in most other area's of Irvine using her new found equity as a down payment.  Of course all things being equal, if she wanted to move up and stay within Laguna Altura, her equity would be effectively negated by the high prices of other homes within that community.

 

[sky949]

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

im with perspective on this. do you really profit though? i know we have discussed previously, but you have to rent, time the market, get back in etc. pain in the ass. it can be done but not practical for a lot people.

Depends on place and time.  I have a friend that bought San Remo new and closed in June 2013 for $820k.  She's been in the property for 2 years and comps put her at about $1.15M.  IP even did all the backyard landscaping/irrigation in this and the trees and shrubs are good size. 

Of course all Irvine homes have increased equity from June 2013 until now but most have not increased 50% like hers has.  She could certainly sell and take that tax free "profit" and buy in most other area's of Irvine using her new found equity as a down payment.  Of course all things being equal, if she wanted to move up and stay within Laguna Altura, her equity would be effectively negated by the high prices of other homes within that community.

That's the catch -- unless you exit the housing market or downsize or move to an area where the prices are lower (or to a property that has appreciated less than the one you are selling), you will not see that profit as you will have to roll those $'s into the next house which would also have appreciated similarly to the place you are selling. I would consider the timing of the first house that you buy as the critical point -- your overall long term appreciation will depend on whether you got the first house at a down market or not.

 

[WTTCHMN]

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

im with perspective on this. do you really profit though? i know we have discussed previously, but you have to rent, time the market, get back in etc. pain in the ass. it can be done but not practical for a lot people.

Depends on place and time.  I have a friend that bought San Remo new and closed in June 2013 for $820k.  She's been in the property for 2 years and comps put her at about $1.15M.  IP even did all the backyard landscaping/irrigation in this and the trees and shrubs are good size. 

Of course all Irvine homes have increased equity from June 2013 until now but most have not increased 50% like hers has.  She could certainly sell and take that tax free "profit" and buy in most other area's of Irvine using her new found equity as a down payment.  Of course all things being equal, if she wanted to move up and stay within Laguna Altura, her equity would be effectively negated by the high prices of other homes within that community.

That's the catch -- unless you exit the housing market or downsize or move to an area where the prices are lower (or to a property that has appreciated less than the one you are selling), you will not see that profit as you will have to roll those $'s into the next house which would also have appreciated similarly to the place you are selling. I would consider the timing of the first house that you buy as the critical point -- your overall long term appreciation will depend on whether you got the first house at a down market or not.

It can be done but you have to time the market and be willing to rent in between the peaks and troughs (which, as mentioned before, many people are not willing to do).

 

[aquabliss]

My wife has friends who bought a house in Fullerton in 2001, sold in early 2006 for double the original purchase price, then rented for 3 years and bought 2 houses in Woodbury in 2009 which have since increased in price more than 40%.

True story but not a common one.

 

[Perspective]

No one ever expected Laguna Altura homes that were selling in the 1.1 million range to appreciate up to 1.8 million within a couple years. Although I don't expect Strada to appreciate as much as Laguna Altura, I still expect significant appreciation in the next 5 years. No where else in Irvine (besides Shady Canyon and Turtle Rock/Ridge) do you get the beautiful and unique topography. Also, Strada's location is within a 7 minute drive to the 5 freeway and even closer to the toll roads making commuting to the major employment centers (LA/Long Beach/North OC) within a reasonable driving distance. I think everyone of my friends and family who have visited Orchard Hills agree that it doesn't feel like typical OC, but rather a scenic and tranquil village in Tuscany.

You don't have to sell me on Orchard Hills and Strada specifically. I'm sold, for all of the reasons you describe. We're paying a similar price for a home ~15% smaller than a new home in Stonegate just a few miles away. There's a reason.

However, I am certainly not buying because I think my Strada home's value will appreciate dramatically. If it does, cool, but that doesn't make it an "investment" in my mind. Unless of course, I'm willing to sell it after it appreciates greatly...

 

[Perspective]

It's also the best way to profit up to $500k (for married couples) after 2 years without any tax penalty.  No other investment vehicle will give you that kind of tax free gains. 

im with perspective on this. do you really profit though? i know we have discussed previously, but you have to rent, time the market, get back in etc. pain in the ass. it can be done but not practical for a lot people.

Depends on place and time.  I have a friend that bought San Remo new and closed in June 2013 for $820k.  She's been in the property for 2 years and comps put her at about $1.15M.  IP even did all the backyard landscaping/irrigation in this and the trees and shrubs are good size. 

Of course all Irvine homes have increased equity from June 2013 until now but most have not increased 50% like hers has.  She could certainly sell and take that tax free "profit" and buy in most other area's of Irvine using her new found equity as a down payment.  Of course all things being equal, if she wanted to move up and stay within Laguna Altura, her equity would be effectively negated by the high prices of other homes within that community.

It's only "profit" if she can keep it, but the equity will just be converted into another Irvine home to live in that appreciated.

 

[Perspective]

Here's a good example. I'm buying in Strada in 2015. There are two new neighborhoods planned in Orchard Hills. Let's assume I'm interested in a bigger house in OH Neighborhood 3 or 4 that will be available in three years.

Would I be better off financially if my Strada house appreciates 30%+ over three years, or if my Strada house' value remains completely flat over three years?

If my Strada house appreciates 30%, then that new bigger house' price will be 30%+ higher from a higher base. If my Strada house' price remains flat for three years, then that new bigger house' price won't likely be much higher than a similar OH's house' price today.

I'll take the latter. All things being equal (income and non-housing wealth rises as expected), I'll be better off with no appreciation in my Strada house over three years.

Now, if I'm considering downsizing or moving to a low-cost locale, that changes things. The issue is highly contextual and complicated.

Keep in mind too, that NO homeowner truly tracks the expenses related to their house in order to accurately calculate a "profit" at sale. Treat your house like a consumable, and you won't be too excited when its price increases, nor depressed when its price decreases. It's just a savings account that barely beats inflation...

 

[bones]

IMO, the only way this works (if you're staying in the immediate area) is if you sit on the sidelines and rent for a bit, wait for the next dip and either do a lateral move or move up.