Woodbury - La Casella

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<strong>Village:</strong> <a href="http://www.irvineranch.com/villages/woodbury/" target="_blank">Woodbury</a>


<strong>Tract:</strong> <a href="http://www.lennar.com/findhome/community.aspx?COMID=2174&DIVID=OCHLEN" target="_blank">La Casella</a> (?? attached townhomes) in the City of Irvine


<strong>Builder:</strong> <a href="http://www.lennar.com/" target="_blank">Lennar</a>


<strong>Schools:</strong> Irvine School District (<a target="_blank" href="http://www.iusd.org">IUSD</a>): Northwood Elementary/El Camino Real Elementary, Sierra Vista Middle, Irvine High


<strong>Tax Rate:</strong> The anticipated total effective tax rate is approximately 1.6%, which is inclusive of all Community Facilities District (CFD) rates.


<strong>HOA Dues:</strong> $135 for Master Association and $265 for Sub Association


<strong>


Plans:</strong>


Residence 1 - 3bd/3.5ba - 1514 sq. ft.


Residence 2 - 3bd/3ba - 2045 sq. ft.


Residence 3 - 4bd/4ba - 2464 to 2498 sq. ft.





<strong><u>PRICING</u>


</strong><strong>


Phase 1 (9/30/2006)


</strong>Residence 1 - From $735,000


Residence 2 - From $835,000


Residence 3 - From $890,000


<strong>


Phase ? (Picked up 1/15/2007)</strong>


Residence 1 - Temp Sold Out (~$690,000)


Residence 2 - From $775,000


Residence 3 - Temp Sold Out (~$840,000)

<p><strong>Phase 3 (Early May 2007)</strong>


Residence 1 - $746,000 (up $61,000)


Residence 2 - $812,000 (up $37,000)


Residence 3 - $877,000 (up $40,000)</p>



<p><strong>Phase ? (6/17/2007)</strong>


Residence 1 - $710,000


Residence 2 - $785,000


Residence 3 - $845,000</p>



<p> </p>
 
I thought these townhomes were pretty nice. It's interesting how they put a Casita in the smallest plan.





Apparently they released 8 homes a couple days ago and they were all picked up. The Plan 1s started at around $690k and the Plan 3s started at around $840k. Right now they only have a Plan 2 available (from a prior phase it seems).
 
<p>So let me get this straight. For a 3/3 <em>condo </em>I get the privilege of paying every month:</p>

<p>$1033 in taxes</p>

<p>$400 in HOA</p>

<p>$4000 mortgage carrying cost (interest only at 6.25%)</p>

<p>For a grand total of $5433.</p>

<p>Or, for just about half that, I can rent and have the pick of several <em>single family homes</em> in Turtle Ridge. Half the distance to the ocean and close to UCI.</p>

<p>Gee, tough call.</p>
 
<p>If it is your primary residence, the $4000 Interest only mortgage is tax deductible. Say you are at the 25% tax bracket. You will save $1,000 per month from income tax. Plus, the tax deduction will lower your tax bracket by lowering your adjusted gross income. </p>

<p>Rent will go up every year, but a fixed mortgage will never increase. Maybe the numbers still doesn't work for you in this purchase, but I hope the tax deduction will encourage you to eventually buy a home. :)</p>
 
<p>That HOA looks a bit steep. </p>

<p>A condo has more common area than a single family home but $400 a month to maintain ... fountains? A few chaparral plants in the front yard?</p>
 
<p>Numbers,</p>

<p>You are right, there is more to the story than just the "basic" numbers (no pun intended) I listed once you start going into details. Besides tax savings (maybe not that much, since many who can afford 5K / month will be AMT) there is also maintainence, depreciation, transaction costs, flexibility, pride of ownership, etc, etc on both sides of the equation. Keep in mind it will take about 24 years for the rent payment to catch up if inflation runs at 3%. And all that time you can be investing the difference. I have run the numbers through several rent vs buy calculators and it's really hard to make a compelling case to buy right now. Even though I really do want to .</p>
 
Not everything is so black & white people. I recently purchased one of the plan 1's with 10% down & after negotiating with the Homebuilder, my payment came out only 20% higher than my payment at my apartment. This of course after tax benefits. Either way if you want to own a home & don't think you can afford it, try your hand at negotiating with these builders & factor in your tax deductions. In the end you may find you are closer to the payments you are looking for.
 
<p>I can afford to buy now. It's just a matter of what I expect to get for the money.</p>

<p>Let's say that someone negotiates down to $650K for a plan 1, and gets a $585 mortgage. Assuming that they don't use a suicide loan, this probably means they make a yearly income of at least $146K (4X income). I don't have the exact statistics available, but since the median household income in Irvine is around $86K, this most likely puts them at least a couple standard deviations above the median, pretty close to the top percentage-wise.</p>

<p>Should someone making 170% of the median income be content with a 1514sf condo?</p>

<p>Should someone making right about the median income (like me) be content with a 700sf condo? Is that a median housing unit in Irvine?</p>
 
<p>Good point salsa.</p>

<p>I think the correct question for many of us is not whether we can buy, but what kind of value can we get for our money.</p>

<p>I, along with most people, have no wish to plunk down a large sum of money only to see later on down the line that I can get x% bigger or better house for the same price.</p>
 
<p>Fray,</p>

<p>FYI, 265 of the HOA is La Casella & & 135 is Woodbury for maintanence of the commons & related areas. </p>

<p>As far as the affordability factor goes, I do see your point. However no one says the median salaried family should be able to afford homes in certain areas. These homes happen to be new & extremely well upgraded in a very convenient area. You say you think you should get more for your money but whose to say you will. Affordability today is different than it was 10 years ago. Maybe owning a home has just become more difficult to afford?</p>
 
<p>HomeHunter, I don't think you see my point at all. I never said that someone making the median income should be able to buy anywhere they want. Obviously that is nonsense that only a socialist would believe. The median home price in Irvine is around $690K. So despite being new & extremely well upgraded in a very convenient area (I don't doubt any of this), the home in question is a below median home for Irvine. To restate my point: when someone making <strong>far in excess of the median</strong> income (170%) has to stretch (4X income) to buy a <strong>below median</strong> home, something is out of whack.</p>

<p>Obviously prices and incomes change over time. They are different today then 10 years ago. I get that. That's why in my examples I am being careful to talk only about price and income <strong>relative</strong> to the median. The market allocates homes based on peoples desire and ability to pay. Those near the top of the income ladder should be able to afford to buy a top home, not settle for a below median home. This should hold true whether we are talking about 1957, 2007, or 2057. It should hold true no matter if absolute prices rise or fall, or if the absolute desirability of living in Irvine goes up or down, or if people have to pay 10% of their income on housing or 90% or their income on housing (the last bit being what most people refer to when they talk about affordibiliy).</p>
 
<p>Maybe it is the median income that must rise? If housing prices stayed flat it is conceivable that the median income will rise to meet the median home price & not the other way around. </p>

<p>Also, I do not consider it stretching. I already told you that my payments will be 20% higher than my current rent which is more than affordable for me. Maybe you are looking at the wrong comparison? There are different variables to affordability besides X times earnings, like interest rate (which is currently very low) and tax write offs (which can knock off a huge portion of your monthly debt & tax service). Like I said before not everything is so black and white.</p>
 
<p>Woohoo!!!! A 20% raise every year for the next 5 years! Sweet! I'd better go down to Fletcher Jones tomorrow to get a ride more befitting my new salary.</p>

<p>Seriously though, you might very well be right and something will happen to cause wages to skyrocket. But high rates of income growth pretty much always lead to high inflation, meaning that while nominal home prices stagnate, real home prices plummet. This is certainly one way the bubble could be deflated; after all inflation was responsible for a good part of the real home price declines in So-Cal in the early 1990s.</p>

<p>Perhaps stretch was too strong a word. My bad. As you said interest rates are low, and multiples do tend to be higher here in So-Cal. As I understand it, the typical rule of thumb is 3X income. When I called a couple mortgage companies to price a home loan a few months ago, the most they wanted to give me was about 4X income, and I have zero debt and excellent credit. So while 4X is certainly affordable in many cases like yours, I think we can agree it is getting towards the high end of the comfort zone for many households.</p>

<p>That being said I stand by my example. Let's see a $86K household try to pay the mortgage on a median Irvine housing unit. Let's see a $146K earner try to pay the mortgage on a top 10% Irvine housing unit. Just 6 years ago they could do so easily . Now they can only do so with a funny-money exotic loan that puts the borrower in very serious rise of foreclosure. Why the change? (Hint: the answer has nothing to do with OC at all. If it did, we would not have seen the exact same change in LA, SD, SF, Portland, Boston, DC, Las Vegas, Phoenix, Miami, etc, etc, etc at the exact same time.)</p>

<p> </p>
 
<p>I have seen the Casella models last summer. Interesting floor plans. Plan one was anticipated to be $735,000 (I still have the original flier at home). Right before phase one release, Lennar cut down the price by $50,000 on all 3 floor plans. I guess it attracted some buyers, except for plan 2 that remains available. The first phases are on completely different block than the models, so I heard a few potential buyers say they would "rather wait" because of location. I am curious the see the actual price paid for those units and what other incentives (if any) the builder came up with to lock in thoses sales....plenty of competition around here.</p>

<p> </p>

<p> </p>
 
<p>IrvineRenter,</p>

<p>I see your point of view too. People with a more positive view of housing than ours have a lot to contribute and this website is definitely better off for it.</p>

<p>However, about a year and a half ago, before I understood what was going on, reading various discussions just like the above was a big part of what convinced me of the opinion I now hold. It helped me a lot to see the points each side had to make, so I could make my own decision. I welcome people disagreeing with my point of view, but if they do so with what I believe to be bad arguments then I am going to call them on it.</p>

<p>Besides, I think HomeHunter is happy with where he/she is at, and I am happy for him/her. It's just that not everyone has the kind of income that HomeHunter does and can afford to make a big mistake in Irvine Real Estate.</p>
 
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