Pros and cons of buying new from builder in Carmel Valley

[arny]

Hello,
Would like to hear your opinions of buying new from builder ( versus buying re-sale property). I am specifically looking in the Carmel Valley area (looking at Pacific Highlands ranch for new property).

My question is that in the short and long term which would be a better investment ( in terms of holding value ?)

Here are the pros and cons I can think of –

Pros

1. New construction, less hassle to maintain
2. Cheaper by almost 100k compared to similar resale properties
3. Can be customized to buyer taste

Cons

1. Mello roos + HOA more than $500
2. Another 5 miles away from main Carmel valley. Not established neighborhood
3. Small lot size ( even though many resale properties do not have very big lot sizes either in CV)

[Anonymous]

more pros:
– you get to use the new fitness facility near santa rosa
– new high school & a large park
– close to 56

more cons:
– it’s new and you’re afraid of losing the shine
– little things will come up constantly (e.g., sealing grouts, adding hooks in the bathroom,
– customizing costs $$$ & time & headache. blinds=5-20K, landscape=30K+, cabinets (built-in), etc. Your house will not look like the model unless you spend extra $200K

did you consider also Carmel Country Highland area, near Torrey Hills?

[MANmom]

MANmom

Arny, are you sure about that $500 mello roos? I think they are more than that. I remember looking at a development there and we added up not one but two HOA’s and CFD fees that were well over $1,000 per month, that is for 30 year!!! Do some calculations yourself and see if this pans out over the life of the loan. You are probably better off financially looking at something 10 years old. That freeway (56) has recently been horrid in the morning and evening…

[SD Realtor]

Arny –

From your post, before the Pros/Cons you asked about the short and long term investment questions. Obviously in the short term the investment is not good. As for the long term that is tougher to answer but if you hold it long enough you will do good.

I think what you are really looking for is, fundamentally do new developments appreciate faster then established housing. If so by how much. This is not an easy question to answer because it will vary with development, location, etc… Also does the appreciation difference overcome the holding costs, (HOA/MR)… I would urge you to run the numbers and see what it would take….

The other factors are really personal taste. Most people here pound on those that like 4S or similar developments. Personally I am not into the new stuff and will purchase a home that is older but that is just my taste. I like a large lot and if the home on the lot isn’t what I want I can always change that. In general you will ALWAYS get better deals from the builders then the resellers because the builders have plenty of margin and the original owners paid that premium when they bought from the builder so they can never ever catch the builders, especially in a down market.

So this post is not really trying to push you one way or the other. I think you find valid pros and cons for either choice but if you are looking at new developments it seems like you kind of have made up your mind. Now just choose the development you like the best.

[sdcellar]

wontanamo– on that fitness facility, doesn’t that represent a large part of the (I believe) $200 HOA fee?

If so, I’d say it’s a pro that it’s available but a con that you pay for it whether you use it or not.

[Anonymous]

that’s my understanding too, sdcellar. I wouldn’t use it much, being a couch potato. Might be worth it for some.

[Alex_angel]

wontanamo, dead on! Most people see the model and fall in love and think. Well the new home is selling for $800k. we can afford that. Umm no. Unless you wnat beige carpets, white cabinets, white tile and white walls. They don’t realize that you need to buy all the curtains, blinds, backspalshes, etc… Before you ever more in that $800k home will cost you $900k and you will still have dirt for a front and backyard because landscaping is not cheap and your home still won’t look remotely close to the models

[Anonymous]

I think one can get by with ~$30K or so for a small SFD, if going with bare necessities:

– flooring: $0 all carpet, even in bathrooms
– landscape: $20K with minimum hardscape & all lawn
– window tx: $5K cheap blinds
– misc: $5K

I’d rather keep renting than to decorate my million dollar house like that…

[Author]

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