All Forum Posts by: Andrew S.

That brings you to cost per square foot as a metric - sometimes buying a larger home in a A+ area and remodeling it completely is a very good way to force appreciation.

having lived in Palo Alto for years and being rasied in Cupertino.. which values track Irvine. the value is in the LAND not the house.. 70 year old homes in Palo alto sell for 2 to 3 million and are then torn down for a new build. Its location location location large lot that allows a mcmansion new build in my mind is were the appreciation value will be.. U could easily see the older home on large lot have a residual land value of 4 mil in 20 years..

this is happening NOW in Lake Oswego Or were I live currently.. old homes on big lots get sold for 500 to 700k and are torn down.. those houses 15 years ago sold for 200 to 300k .. My current home I did that.. I paid 300k for a tear down in 2008 ( bad timing LOL) tore it down but could not build because the market went to crap. But hung on built in 2013 at a cost of about 450k which was 120 a foot. So in it 750k and its doubled in value since 2013. But if I just had the land and never built it would be worth 600 to 700k as well.

thats the play with high cost CA OR WA real estate in my mind.. the lack of land and the middle housing push all cities are doing now for tiny lots and high density is going to put a real premium on lots that you can build a larger mcmansion. Just my opinion of course for whatever its worth :)

I guess it really has to be in a great neighborhood because the older houses with large lots that I'm looking at are surrounded by other lower end 40+ year old houses. If it were to be torn down and redone into a really nice home, it'd be too nice for the neighborhood, and the type of buyer it would attract would go elsewhere. I guess at that point it might make some sense to cut the lot in half and build 2 smaller homes, but even then there'd be a cap on how much I could sell for since the neighborhood is pretty beat up to begin with.

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Orange County, California

Can I come just for the networking part?

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Orange County, California

For a buy and hold home, how do you know which specific city to buy in? Is there some sort of database that summarizes each city's appreciation by neighborhood? Or is there some manual way to do this smartly? Thanks.

1 Vote

Orange County, California

I am looking to purchase a single-family home in Irvine, CA, just below the $2M price range. My goal is to maximize appreciation over the next 10-20 years. I am particularly interested in single-family homes above 2000 sqft with larger backyards (~4000 sqft lot), because that's what I like since I will live there, but these are really old. I may be open to changing to something else if appreciation is better with a different option. So I'm curious how does the rate of appreciation change over time? My guess is that it slows down when a house reaches a certain age since it may be less desirable? But old homes may also be built in more convenient, central areas so I'm not sure. I am weighing three different options:

Option 1: Older Homes with Larger Lots (Built ~40+ Years Ago)

Price: ~$1.8M
Lot Size: ~4000 sqft
Home Size: 2000+ sqft
Pros: Large lot, most convenient location to the rest of OC and LA
Cons: Old and probably beat up

Option 2: Newer Resale Homes with Smaller Lots (Built Within the Past 25 Years)

Price: ~$1.8M
Lot Size: Home size + ~200 - 600 sqft
Home Size: Varies but typically 2000+ sqft
Pros: Not falling apart (yet?), Location in the heart of Irvine. Somewhat close to OC and LA
Cons: Really close to neighbor, tiny yard

Option 3: Brand New Homes in Great Park with Small Lots

Price: ~$1.8M
Lot Size: Small (comparable to Option 2)
Home Size: 2800 sqft, 3 stories
Pros: New!, Very spacious interiors and option to have 3 stories. Close to park
Cons: Mello Roos Tax adds 0.6% to annual tax. Tiny yard, not sure about quality of construction, Really close to neighbor, Kind of far from rest of Irvine. Quite far from rest of OC and LA

I would greatly appreciate any thoughts on how these three types of homes might appreciate differently over the next 10-20 years. Thank you!

0 Votes

Orange County, California

All Forum Posts by: Andrew S.

Andrew S. has started 2 posts and replied 4 times.

Post: At what point does a house's appreciation slow down?

Post: OCREIN - Learn How to Use Propstream

Post: How do you estimate appreciation rates for different cities?

Post: At what point does a house's appreciation slow down?