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Old 01-09-2012, 09:26 AM
 
69 posts, read 239,521 times
Reputation: 41

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Why are some new houses 100K more expensive than houses like 5 years old in some areas in Great Dallas area, same area and similar house size (below, the new even smaller)

Well, I am new to Dallas market and doing some research online before I enter this market. I am checking Richardson, found the new houses builders selling are much more expensive than 5 years old houses, if the builders want to raise DFW area house market by rising the new house prices? (When the buyer buy a brand new house below at 400k, he will not sell it at just 260k after 5 years generally).

Let's check realtor.com

New houses:

(1). 3922 Clear Creek Court Richardson, TX 75082
total: 2773 Sq Ft, 3bed 2bath. Seller asks for 400K
3922 Clear Creek CT Richardson TX - Home For Sale and Real Estate Listing - MLS #11700326 - Realtor.com®

(2). 3929 Clear Creek Court Richardson, TX 75082
total: 2006 Sq Ft, 3bed 2bath. Seller asks for 336K
3929 Clear Creek CT Richardson TX - New Home for Sale - MLS #11414075 - Realtor.com®


5-year-old houses in realtor.com:

(1). 5709 New Castle Drive Richardson, TX 75082
total: 2806Sq Ft (Collin CAD 2715 Sq Ft), owner asks for 280k, Coolin CAD property appraised value 269k
5709 New Castle Dr Richardson TX - Home For Sale and Real Estate Listing - MLS #11651056 - Realtor.com®


(2). 5736 New Castle Drive Richardson, TX 75082
total: 3391 Sq Ft, 4bed 4bath, owner asks for 269k, Collin CAD property appraised Value 340k
5736 New Castle Dr Richardson TX - Home For Sale and Real Estate Listing - MLS #11703887 - Realtor.com®

Last edited by bypassus; 01-09-2012 at 09:34 AM..
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Old 01-09-2012, 09:46 AM
 
Location: Dallas, TX
2,346 posts, read 5,800,364 times
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The new homes you cited are both by Toll Brothers. Generally, they provide a higher level finish-out than the competition, and consistently price their homes ABOVE that of all other non-custom builders.

By comparison, one of the used homes is a Portrait home. This builder is now bankrupt. Make of that what you will.

Now, we can argue all day about whether or not a Toll Brothers build is worth the premium they charge. But the name of the home builder is one factor creating the price difference you cite.

Another factor is simple supply and demand. There aren't that many new builds in that area, so Toll Brothers can get away with their pricing.
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Old 01-09-2012, 10:11 AM
 
11,681 posts, read 21,274,228 times
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It's also possible that the 5-year-old home owners had to cut their price down significantly to entice buyers into looking at "used" homes when there are brand-new homes in the exact same neighborhood. If price were equal (or within 10%) and the location was identical, almost 100% of buyers would choose the brand new home. This is the "catch 22" of new home areas. You need to know you're going to stay there long enough for the whole competing area to become 100% built out for home prices to stabilize long-term.
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Old 01-09-2012, 10:58 AM
 
69 posts, read 239,521 times
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Well, I found this is a rule, all new houses in around plano area go from 250k, but old houses (like built in 1990s) start from 150k. similar size and location. I will say there are some reasons caused this difference?

Let's check here.
new:
6400 Fitzgerald , Plano, Texas 75074 (community: Trails of Glenwood, builder: Grand Homes), lowest model is "Grand Harrison" From $259,900, which is 2233 sq. ft, 3bed and 2 bath.
http://www.realtor.com/property-deta...207?source=web

old:
3341 Marsalis Lane Plano, TX 75074, which is just 0.6 miles away from above new. built in 1998, 4 bed and 2 bath, 2158 sq ft.
asked for 189k and Collin CAD value is 175k
3341 Marsalis Ln Plano TX - Home For Sale and Real Estate Listing - MLS #11671454 - Realtor.com®

In many house markets I saw, new houses with new community means unknown ISD, unknown shopping areas, unknown neighborhood, far away from work location...old houses means mature neighorhood, known ISD, shopping, more convenient location... old houses are losing their house values but improving their location/land values, so old houses maybe at similar prices or even higher price than new houses. I do not understand in Dallas market, it looks this is not the case and want to know the reasons.

Last edited by BstYet2Be; 01-09-2012 at 11:09 AM..
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Old 01-09-2012, 11:19 AM
 
11,681 posts, read 21,274,228 times
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Quote:
Originally Posted by bypassus View Post
In many house markets I saw, new houses with new community means unknown ISD, unknown shopping areas, unknown neighborhood, far away from work location...old houses means mature neighorhood, known ISD, shopping, more convenient location... old houses are losing their house values but improving their location/land values, so old houses maybe at similar prices or even higher price than new houses. I do not understand in Dallas market, it looks this is not the case and want to know the reasons.
Old houses in the suburbs are often times less desirable in the DFW area because "for just another 10-15 minute drive", buyers can get a brand new home for the same price or a bit more. They are willing to take a chance on the "unknown" for the new, particular many people relocating from very expensive places on the East/West coasts where a new home would never have been in reach, particularly a brnad new 4,000sf home for $200k or whatever.

You have to come into the city (south of LBJ-635) to really find the neighborhoods that follow the real estate rules you are trying to apply to the suburban market--> older, well-maintained homes in close-in desirable locations ARE gaining/maintaining their values becaus of the #1 real estate rule--- location, location, location.

The difference in location between old home in Plano and brand new home in Allen or North Plano doesn't carry the same value difference that the new home in North Plano (1 hour commute to downtown) vs old home in Lakewood or Kessler Park (5-10 minute commute to downtown) does.
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Old 01-09-2012, 12:00 PM
 
Location: Dallas/Fort Worth, Texas
4,128 posts, read 13,174,548 times
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You have to compare apples to apples. The new homes will tend to be priced a lot higher then what they will end up selling for many builders and that is the case with Toll B. and Grand.

One of the preowed home in Richardson you refer too is a short sale and the other one backs to Renner which is a very busy road. As Big G said, the finish out will be very different too.

You have to compare the ones that sold. Also, don't look at what CAD says the value is, many homeowners protest their assessed value every year.

There isn't much new construction in Plano or Richardson and many people would prefer to pay a premium for new. Homes are more energy efficient too.

Naima
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Old 01-09-2012, 12:02 PM
 
Location: Prosper
6,268 posts, read 12,137,424 times
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Quote:
Originally Posted by bypassus View Post
Why are some new houses 100K more expensive than houses like 5 years old in some areas in Great Dallas area, same area and similar house size (below, the new even smaller)
Because the simple fact is, builders have drawn a line in the sand for what they are willing to sell their homes for in this economic climate. Prices have fallen drastically pretty much everywhere (and that does include the DFW metroplex, though not as bad as other states.)

Used homes are forced to compete with what the market will bear, and are a true reflection of pricing NOW. Builders are refusing to lower their prices to compete, and in some cases they simply can't lower their prices anymore. It can take years from start to finish to build a subdivision, and if they've already sold homes at a higher rate, it devalues the rest of the homes if they cut prices. They also had to buy the land at a higher rate than they could buy it now, and they need to make a profit, which also affects just how low they can go on pricing.

We looked at several new homes in Frisco and McKinney last year. On average, builders wanted 30-50k more for their homes than a comparable 4-5 year old home. We went to the bargaining table with one of them through our realtor to see if they could get a bit more in line with market pricing, and they refused. So, we bought a 5 yr old home that no one had ever lived in. The owner took a 80-90k loss on it, but whereas he was willing to do that to get rid of it, the builders are not.
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Old 01-09-2012, 12:40 PM
 
69 posts, read 239,521 times
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Now, why there are no so many new builds in Plano, I believe there are enough lands here. I do not see many builders here, there are still strong market requests in Plano, why builders moved to Frisco or other places. City of Plano does not approve lands for new resident builds? or any other reason?
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Old 01-09-2012, 01:11 PM
 
69 posts, read 239,521 times
Reputation: 41
CAD value is $200k, owner asks for $300k? I do not think so, owner pay property tax every year (which is about 2.6% here!!). The whole community property value is in a range.

Quote:
Originally Posted by nsumner View Post
You have to compare apples to apples. The new homes will tend to be priced a lot higher then what they will end up selling for many builders and that is the case with Toll B. and Grand.

One of the preowed home in Richardson you refer too is a short sale and the other one backs to Renner which is a very busy road. As Big G said, the finish out will be very different too.

You have to compare the ones that sold. Also, don't look at what CAD says the value is, many homeowners protest their assessed value every year.

There isn't much new construction in Plano or Richardson and many people would prefer to pay a premium for new. Homes are more energy efficient too.

Naima
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Old 01-09-2012, 01:43 PM
 
94 posts, read 167,296 times
Reputation: 67
Quote:
Originally Posted by MckinneyOwnr View Post
We looked at several new homes in Frisco and McKinney last year. On average, builders wanted 30-50k more for their homes than a comparable 4-5 year old home. We went to the bargaining table with one of them through our realtor to see if they could get a bit more in line with market pricing, and they refused. So, we bought a 5 yr old home that no one had ever lived in. The owner took a 80-90k loss on it, but whereas he was willing to do that to get rid of it, the builders are not.
Very true here, owners who are upside down on their loans will take a loss to take the burden off their shoulders whereas builders will not.
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