[IHB] Closed Sales from 5/3/2012 to 5/9/2012
- Thread starter zovall
- Start date
NEW -> Contingent Buyer Assistance Program
Actually he's right. Land prices are far more volatile than the price of structures, and since the peak of the bubble, land prices in SoCal have fallen by about 50%, far more than "home prices" (the structure) have fallen since the peak in most areas of SoCal.
What makes it even more interesting is that the land some of these new developments are being built on should be considered the bottom of the barrel when it comes to land value (landfills, former air bases, arid land with no agricultural value, polluted ground water supply, etc). This isn't OC coastal you're paying a premium for, a lot of the land being developed in Irvine is seriously waste land.
You can't compare tract home construction to "custom home" construction. Two totally different models.
How much do you think it cost Honda per unit to build every Civic?
How much would it cost you to hire private contractors, and source your own materials to build a Civic?
Back to the main point at hand, developers will try to maximize their profit margins off your wallet regardless of their "cost". Even if their land cost were only $20 an acre, if they could sell you a home at $350/sqft, they'd do it. It's foolish to assume that home cost are high because developer cost are high. Like any business, they will maximize their raping of your wallet.
Pat J Star - i never thought of you when i said hate irvine - that was purely IHS and indie. no need to be angry at me...
i dont know how many times i can say this but i am not an irvine loving fool. i will share my spreadsheet after i update it and for 3000 sq ft houses in central and south OC, the cost difference on a monthly basis in minimal at best for *us* based on our lifestyle and where we frequent. its really detailed and most will think i am a nut over analyzing every detail.
in the last 10 years, i have lived in portland, santa clara, santa monica, mission viejo, irvine, orange, hong kong, and manchester. if anything, i think all of OC is lame and suburbia. on same note, i never want to live in the valley either. i live here cause my wife grew up here and loves it and i am fine with that.
that being said, the stuff many of you pick on for the irvine developments are similar to a lot of new developments in OC. ladera ranch is literally next to massive high voltage lines and so is lots of serrano heights. the new developments in laguna are right next to the 73. yes a lot of the irvine developments are even worse locations with either former bases or proximity to landfills but the trades are closer to the OC job sector, closer to LA, closer to airport, more shops and restaurants, and a bit more central if you tend to get out of OC a lot like we do. we could have the same location and price but much smaller house in quail hill or have the bigger house in woodbury on former farmlands or LR with proximity to landfill...thats our choice and trade off
its great that your are $250K richer but my point and i hope you get this is that within the valley, many people think porter ranch is outskirts and that a bunch of asians, indians, and persians are crazy for buying there. and just like irvine to south OC, you could have lived in simi valley which is literally 10 more minutes away from LA and would have saved about $50-75 per sq ft. i think you posted your house was around 2500 so thats $125K-187K difference...not pocket change. or you could have gotten a tiny house with no views in sherman oaks, an area considered much better than porter ranch just like newport to irvine.
you can always save $$$ and sometimes serious amounts of cash for similar product that happens to be very close. heck my wife and i work from home...we can save crazy amount and buy a house outright in corona with the amount we are ready to put down in irvine. you didnt choose porter ranch randomly, there was a reason to go there and not other parts of the valley. in same case, many people value certain neighborhoods and there is nothing wrong with.
any way this thread went way off track. i didnt mean to imply the land was better or something and simply tried to correct IHS that there is more than the cost of the wood and stucco. USCTrojan did a much better job explaining and succinctly to boot unlike my long rants here.
waitin4ever
New member
Zovall & Nilam, Thanks for the weekly update. Some properties catch my attention
every friday this list comes up. This week both the sales in Portola springs were
interesting. 250/sq ft approx. this must be the new low for newer homes in irvine
in a long long time.
Potty springs or not, I personally like portola and at 250/sq ft these might actually
have chance of seeing appreciation/flat prices compared to other new developments.
every friday this list comes up. This week both the sales in Portola springs were
interesting. 250/sq ft approx. this must be the new low for newer homes in irvine
in a long long time.
Potty springs or not, I personally like portola and at 250/sq ft these might actually
have chance of seeing appreciation/flat prices compared to other new developments.
zovall said:
The Motor Court Company
Well-known member
Not so fast. One is attached by KB; the other one is a stone throw away from the toll road.
waitin4ever said:
irvinehomeowner
Well-known member
I also want to say that I like these periodic posts.
It gives me an idea of what pricing range homes are going for in certain areas.
And I think there is a typo... 5/3 to 5/9... not 4/9.
It gives me an idea of what pricing range homes are going for in certain areas.
And I think there is a typo... 5/3 to 5/9... not 4/9.
irvinehomeshopper
Well-known member
Perception means a lot for pricings. Even for $180/sf the builders is still making money. Anything over $300 is just adding a thick wad of cash to the developers wallet. Those homes at cost including everything cost no more than $150k. The stink at potty springs is lowering price perception.
irvinehomeshopper
Well-known member
So how do you evaluate land cost at a potty stink, landfill polluted and jail break location? With all those combined negative elements taken from data across 40 landfills across America the lands within 2 miles away are worth NADA and are prohibitive to be zoned residential. Only industrial R&D and manufacturing is allowed. Both potty and Landfill Ranch are less than 1/2 mile away therefore the land should be worth closer to nothing. In India people in Mumbai people live next to trash dump and so is China next to industrial wasteland. I think it is just a cultural thing.
irvinehomeshopper
Well-known member
The next thing you are going to tell me the good schools are what make land expensive. Take a look at Oxford the land there are cheap and Cypress area have exactly the same business parks just like the spectrum. Oxford at any given time could shame University.
However, we all know stupid kids can't pass the test so we have to pay high land price because we are trying to buy pedigree.
However, we all know stupid kids can't pass the test so we have to pay high land price because we are trying to buy pedigree.
IndieDev
New member
rkp said:
Actually he's right. Land prices are far more volatile than the price of structures, and since the peak of the bubble, land prices in SoCal have fallen by about 50%, far more than "home prices" (the structure) have fallen since the peak in most areas of SoCal.
What makes it even more interesting is that the land some of these new developments are being built on should be considered the bottom of the barrel when it comes to land value (landfills, former air bases, arid land with no agricultural value, polluted ground water supply, etc). This isn't OC coastal you're paying a premium for, a lot of the land being developed in Irvine is seriously waste land.
irvinehomeshopper
Well-known member
I am glad Indie is chiming in because land value in Potty Springs should be the lowest value and the cost of the structure and infrastructure are the major cost factors. If it is the coast then the cost of the home 65% should reflect the land cost.
i didnt say land value. i said the land cost...was pointing to the fact that there is some cost outside of the structure.
i have no idea how much TNHC paid for the lambert ranch land and how much it cost them for the common areas like roads and infrastructure before they got to the lots. there definitely was a cost there and with no MR, they arent passing it forward in a bond. then comes the actual house and you are saying that builders pay less than $50 per sq ft. that seems really low. i realize people building 1 house at a time are going to pay more but not 3-4x. we have friends who finished a custom house in pasadena just last year and other friends who did one in WLA a few years ago. both were closer to $200 per sq ft.
any way, your point that land is not as good as coastal is fair and hence, the price is MUCH less than coastal. maybe not low enough for you to accept but substantially lower than living in newport coast
i have no idea how much TNHC paid for the lambert ranch land and how much it cost them for the common areas like roads and infrastructure before they got to the lots. there definitely was a cost there and with no MR, they arent passing it forward in a bond. then comes the actual house and you are saying that builders pay less than $50 per sq ft. that seems really low. i realize people building 1 house at a time are going to pay more but not 3-4x. we have friends who finished a custom house in pasadena just last year and other friends who did one in WLA a few years ago. both were closer to $200 per sq ft.
any way, your point that land is not as good as coastal is fair and hence, the price is MUCH less than coastal. maybe not low enough for you to accept but substantially lower than living in newport coast
IndieDev
New member
rkp said:
You can't compare tract home construction to "custom home" construction. Two totally different models.
How much do you think it cost Honda per unit to build every Civic?
How much would it cost you to hire private contractors, and source your own materials to build a Civic?
Back to the main point at hand, developers will try to maximize their profit margins off your wallet regardless of their "cost". Even if their land cost were only $20 an acre, if they could sell you a home at $350/sqft, they'd do it. It's foolish to assume that home cost are high because developer cost are high. Like any business, they will maximize their raping of your wallet.
i dont disagree that they will try to maximize profits indie. i am saying that the production of a custom home and tract home are much more similar than a custom car and factory line car.
in any case, we are off on a tangent. you guys keep saying its worthless and should have no premium but i have no idea what you are comparing it to. it doesnt have the cost that newport does so whats the problem? if they were asking the same to live there, i get your point but i dont understand what you keep comparing it to.
porter ranch is outskirts of valley and yet more expensive than lots of the valley thats closer to LA and ladera ranch is more outskirts than aliso viejo and yet more expensive. what is the point of you guys dissing everything irvine to the nth degree? you spend so much of your time on a forum called "talk irvine" and yet hate this place.
and lets be clear, irvine always had crappier product than its neighboring cities and was able to charge a premium. 90s westpark homes are on super small lots and truly tract homes with 100% same look and feel. yet when my cousins bought there in 96, my parents tried to tell them save a ton and buy in laguna niguel. for same money they could have gotten much bigger house and much bigger lot but they chose the westpark home.
i am not trying to say irvine is special or anything...i would prefer to live in a true city and my dream neighborhood is SM north of wilshire and west of lincoln...but since early 90s, you can always point at a neighboring city that offered bigger house and bigger lot compared to irvine for less...the current locations arent ideal and laguna altura could have been amazing if they built the identical of lambert ranch there. but it is what it is and you cant wait forever right?
in any case, we are off on a tangent. you guys keep saying its worthless and should have no premium but i have no idea what you are comparing it to. it doesnt have the cost that newport does so whats the problem? if they were asking the same to live there, i get your point but i dont understand what you keep comparing it to.
porter ranch is outskirts of valley and yet more expensive than lots of the valley thats closer to LA and ladera ranch is more outskirts than aliso viejo and yet more expensive. what is the point of you guys dissing everything irvine to the nth degree? you spend so much of your time on a forum called "talk irvine" and yet hate this place.
and lets be clear, irvine always had crappier product than its neighboring cities and was able to charge a premium. 90s westpark homes are on super small lots and truly tract homes with 100% same look and feel. yet when my cousins bought there in 96, my parents tried to tell them save a ton and buy in laguna niguel. for same money they could have gotten much bigger house and much bigger lot but they chose the westpark home.
i am not trying to say irvine is special or anything...i would prefer to live in a true city and my dream neighborhood is SM north of wilshire and west of lincoln...but since early 90s, you can always point at a neighboring city that offered bigger house and bigger lot compared to irvine for less...the current locations arent ideal and laguna altura could have been amazing if they built the identical of lambert ranch there. but it is what it is and you cant wait forever right?
IndieDev
New member
I don't know if you're directing those comments specifically towards me, but I've never stated that "I hated Irvine", nor did I diss Irvine in this thread. I own a home in Irvine, so obviously I don't "hate it".
I'm simply agreeing with IHS that land values are not what is causing homes to be over priced in new developments in OC, because he's right.
If you think owning a home in Irvine would complete your life, and that if it didn't happen, you would be disappointed, then yes, why wait? Go down to the bank, cut the biggest cashier's check you can, and hand it over to Donald Bren. I'm sure he'll be more than happy to give you one of his TIC products for your hard earned cash.
I'm simply agreeing with IHS that land values are not what is causing homes to be over priced in new developments in OC, because he's right.
If you think owning a home in Irvine would complete your life, and that if it didn't happen, you would be disappointed, then yes, why wait? Go down to the bank, cut the biggest cashier's check you can, and hand it over to Donald Bren. I'm sure he'll be more than happy to give you one of his TIC products for your hard earned cash.
usctrojancpa
Well-known member
Besides the cost of the land/land improvements and the construction of the home, there are additional soft costs just as marketing & sales, financing costs, carry costs, permits & inspections, warranty and post sale services, etc. Obviously the largest components of costs to the builder will be the land, land improvement, and construction costs. The pricing of the homes is more a function of the demand and comp analysis than it is what the total cost for each home is estimated to be. The reality is that the builder did a detailed analysis on all of the costs (excluding) the land (including a profit margin) using the estimated sales prices to determine what the maximum price that they would be willing to pay for the land (residual land valuation).
irvinehomeshopper
Well-known member
Don't forget high salary executive picking his nose while monitoring this site like Ranchbroker. RKP has pay his overhead too.
USCTrojanCPA said:
Patrick J. Star said:
Pat J Star - i never thought of you when i said hate irvine - that was purely IHS and indie. no need to be angry at me...
i dont know how many times i can say this but i am not an irvine loving fool. i will share my spreadsheet after i update it and for 3000 sq ft houses in central and south OC, the cost difference on a monthly basis in minimal at best for *us* based on our lifestyle and where we frequent. its really detailed and most will think i am a nut over analyzing every detail.
in the last 10 years, i have lived in portland, santa clara, santa monica, mission viejo, irvine, orange, hong kong, and manchester. if anything, i think all of OC is lame and suburbia. on same note, i never want to live in the valley either. i live here cause my wife grew up here and loves it and i am fine with that.
that being said, the stuff many of you pick on for the irvine developments are similar to a lot of new developments in OC. ladera ranch is literally next to massive high voltage lines and so is lots of serrano heights. the new developments in laguna are right next to the 73. yes a lot of the irvine developments are even worse locations with either former bases or proximity to landfills but the trades are closer to the OC job sector, closer to LA, closer to airport, more shops and restaurants, and a bit more central if you tend to get out of OC a lot like we do. we could have the same location and price but much smaller house in quail hill or have the bigger house in woodbury on former farmlands or LR with proximity to landfill...thats our choice and trade off
its great that your are $250K richer but my point and i hope you get this is that within the valley, many people think porter ranch is outskirts and that a bunch of asians, indians, and persians are crazy for buying there. and just like irvine to south OC, you could have lived in simi valley which is literally 10 more minutes away from LA and would have saved about $50-75 per sq ft. i think you posted your house was around 2500 so thats $125K-187K difference...not pocket change. or you could have gotten a tiny house with no views in sherman oaks, an area considered much better than porter ranch just like newport to irvine.
you can always save $$$ and sometimes serious amounts of cash for similar product that happens to be very close. heck my wife and i work from home...we can save crazy amount and buy a house outright in corona with the amount we are ready to put down in irvine. you didnt choose porter ranch randomly, there was a reason to go there and not other parts of the valley. in same case, many people value certain neighborhoods and there is nothing wrong with.
any way this thread went way off track. i didnt mean to imply the land was better or something and simply tried to correct IHS that there is more than the cost of the wood and stucco. USCTrojan did a much better job explaining and succinctly to boot unlike my long rants here.
irvinehomeshopper
Well-known member
Just like Indie I am invested in this city and well invested in the local politicians. I don't agree with the censorship, lies and political agendas. On a personal level I still have lunch with the politicians just like opposing lawyers in a courtroom but lunch buddies during the breaks.
irvinehomeshopper
Well-known member
RKP to correct your statement. Indie and I are rational. We study the logistic, line up our facts, and remove our emotion from something like finding excuses to justifying buying a million dollar property next to landfill, jail, toll road, high fire zone, cell antennas, and burial ground. We are both Irvine homeowners much more seasoned than you in Irvine history. We have seen a lot.