Buying a KB Home (San Antonio, Spring: layoffs, middle school, subdivision)

[banker]

Another article giving some more information on the new home industry:

MySA.com: Real Estate

But here's the not so good part for folks like me that want to build and not buy spec:

"While builders may be willing to cut you a deal on one of their inventory homes, you won't find as much wiggle room negotiating to have a house built from the ground up, local real estate experts say.

Also, most of the decline in the San Antonio new-home market is happening at the lower end of the spectrum, in houses that cost about $175,000 or less, according to Metrostudy."

[mastercone]

I am surprised that this thread is alive. I posted in it awhile back. I can understand that you prefer to build versus buying a SPEC home. I know you have your own agenda for the home purchase and you seem thoroughly enamored with this neighborhood.

KB Homes is a notorious cookie cutter builder (there are many-i.e., plans fully accommodating straight 4X8 sheets of drywall to avoid waste, etc.), and I do remember the Rayco Homes era. But KB is nationwide, and I remember walking through a spec home they had built in one of their top of the line communities ten years ago, and it was a whopping 5,555 square feet for under $200K. That was one big house. As a builder, they are capable of putting out a home. Whether it meets your standard of quality is up to you.

If it were me, not you but ME, I would wait to see what shakes next year. The worst people to get advice from on the real estate market is from the very people or groups whose livelihood depends on it. This Express-News article is all fodder and is designed to make everyone think that NOW is the time to buy. It's tantamount to asking a military general if they need more tanks or planes. The answer will always be yes because he has a direct stake in the matter.

If the house inventory county-wide is as high as they say it is, then they are discounting spec homes in order to unload the inventory because they will have to pay property taxes.

I read through your earlier posts and you mention that you hope to be there next year. What's the rush? This is a purchase where you want the cards on your side of the table. The KB sales reps can ONLY discount the homes based on what their corporate HQ tells them. KB has a bottom line and it will drop when the time is right. Timing is on your side and KB isn't exactly sweating just yet.

You'll know the deal is right when they start throwing everything into the house in order to get you to buy. In 1991, I remember almost buying a new house in Elm Creek for $350K as it had languished on the market for a year during the real estate downturn. It was originally listed for $475K. Today, it is worth a little more than $800K.

What we are seeing now is the beginning of a downturn in real estate despite the rosy picture painted by local pro-real estate forces. This is not a collapse but it will certainly put a damper on the rampant real estate growth. I would bet that the odds for a favorable price on a new home are even more in your favor not just 6 months from now but a year from now as well.

And if they were to offer you one of their spec homes listed at $300K or more for $250K or less, then I would probably jump on it. Your goal should be to get a fully loaded home at the base starting price. If you play your cards right, you have a good chance of getting it. The greatest option I saw on their list was that gourmet kitchen. That would almost be a must.

[jerryg]

Originally Posted by mastercone

And if they were to offer you one of their spec homes listed at $300K or more for $250K or less, then I would probably jump on it. Your goal should be to get a fully loaded home at the base starting price. If you play your cards right, you have a good chance of getting it. The greatest option I saw on their list was that gourmet kitchen. That would almost be a must.

Amen. Especially with respect to the kitchen. That actually IS a must on my list, and unless I end up in a situation -exactly- like you're describing when I'm out there next week, I'll be renting. Another must on my list is the tub+shower in the master bath. I'd like a LITTLE bit of luxury there, for crying out loud
I need to get the current home sold, and I'd rather not be -that- squeezed, financially speaking.

[banker]

Originally Posted by mastercone

I am surprised that this thread is alive. I posted in it awhile back. I can understand that you prefer to build versus buying a SPEC home. I know you have your own agenda for the home purchase and you seem thoroughly enamored with this neighborhood.

KB Homes is a notorious cookie cutter builder (there are many-i.e., plans fully accommodating straight 4X8 sheets of drywall to avoid waste, etc.), and I do remember the Rayco Homes era. But KB is nationwide, and I remember walking through a spec home they had built in one of their top of the line communities ten years ago, and it was a whopping 5,555 square feet for under $200K. That was one big house. As a builder, they are capable of putting out a home. Whether it meets your standard of quality is up to you.

If it were me, not you but ME, I would wait to see what shakes next year. The worst people to get advice from on the real estate market is from the very people or groups whose livelihood depends on it. This Express-News article is all fodder and is designed to make everyone think that NOW is the time to buy. It's tantamount to asking a military general if they need more tanks or planes. The answer will always be yes because he has a direct stake in the matter.

If the house inventory county-wide is as high as they say it is, then they are discounting spec homes in order to unload the inventory because they will have to pay property taxes.

I read through your earlier posts and you mention that you hope to be there next year. What's the rush? This is a purchase where you want the cards on your side of the table. The KB sales reps can ONLY discount the homes based on what their corporate HQ tells them. KB has a bottom line and it will drop when the time is right. Timing is on your side and KB isn't exactly sweating just yet.

You'll know the deal is right when they start throwing everything into the house in order to get you to buy. In 1991, I remember almost buying a new house in Elm Creek for $350K as it had languished on the market for a year during the real estate downturn. It was originally listed for $475K. Today, it is worth a little more than $800K.

What we are seeing now is the beginning of a downturn in real estate despite the rosy picture painted by local pro-real estate forces. This is not a collapse but it will certainly put a damper on the rampant real estate growth. I would bet that the odds for a favorable price on a new home are even more in your favor not just 6 months from now but a year from now as well.

And if they were to offer you one of their spec homes listed at $300K or more for $250K or less, then I would probably jump on it. Your goal should be to get a fully loaded home at the base starting price. If you play your cards right, you have a good chance of getting it. The greatest option I saw on their list was that gourmet kitchen. That would almost be a must.

Excellent points. I agree 100%. However - the one point that the builder has in their favor is controlling lot inventory. As a long term investment - the lot is more important than just about everything else. The orientation to the setting sun, size of the yard, location in the neighborhood and location in the city. If you wait for a spec - then you can't control those variables. Even if I weren't considering KB (and Pulte at the current time) I would be looking for those other factors in another neighborhood. Believe me - I have looked at a lot of houses that are currently spec - and one common theme was horrible lot or elevation (who wants a house with 10-20 steps going up to the front door?!). There is usually a reason that certain spec homes sit on the market long enough to get steep discounts - and location in the neighborhood is a big part of that.

I see too many houses that go on the market years after the home buyer impulsively had a home built on a lot that now backs up to a busy street - they are all over Stone Oak - houses that now back up to Stone Oak Parkway have a view of traffic. Also houses that have living spaces facing the afternoon sun - horrible on utility bills and on being able to use your back porch in the setting summer sun.

So - while I agree with the timing and overall condition of the real estate market - there is an understandable premium to achieve the right lot, location within the neighborhood and in the city. Good deals on home purchase prices come and go - but ideal lots don't come available every day. For example out of the 139 lots in Saddle Mountain - about 10% meet the requirements listed above.

[jerryg]

Another problem I'm, personally, having is lot-size. Wtf.
There's "so much land" there, but y'all are packing them in tighter than sardines. I suppose that's better than building row after row of townhomes/rowhomes, but still...
.12-.15 average lot size in these developments, if THAT large... I'd have to build from the ground up just so I can have enough of a lot to put in a decent sized pool...
There's also my general preference for having a bit of space between my house and my neighbors, too.

[banker]

Originally Posted by jerryg

Another problem I'm, personally, having is lot-size. Wtf.
There's "so much land" there, but y'all are packing them in tighter than sardines. I suppose that's better than building row after row of townhomes/rowhomes, but still...
.12-.15 average lot size in these developments, if THAT large... I'd have to build from the ground up just so I can have enough of a lot to put in a decent sized pool...
There's also my general preference for having a bit of space between my house and my neighbors, too.

Agreed. There are a few lots in Saddle Mountain - again about 5% of the total development that range in size between 1/4 to 1/3 of an acre. They are premium lots so folks that make that jump rarely back out at the last minute. On every spec house I have looked at - not a one was on a cul-de-sac or a large lot. They were all that .15-.20 sized lot. Too small for me. But builders keep shrinking the lot sizes to maximize their profit. It is a no win game unless you have tons of money and can move out of the city and go custom on acreage.

[jerryg]

No argument.
That's one of the reasons why I'm leaning towards renting for the first year, or even two years, that I'm out there. And it's not just limited to homes being built around San Antonio, either - it's what builders have been doing on the east coast for years.

It's also why I'll be looking at premium builders such as Ryan, in all likelihood, when I do go to build. But we'll see. Premium KB homes seem to be decent, so they're in the list, but we'll see. It really depends on how long things take to happen.

[joe123456]

Originally Posted by banker

Agreed. There are a few lots in Saddle Mountain - again about 5% of the total development that range in size between 1/4 to 1/3 of an acre. They are premium lots so folks that make that jump rarely back out at the last minute. On every spec house I have looked at - not a one was on a cul-de-sac or a large lot. They were all that .15-.20 sized lot. Too small for me. But builders keep shrinking the lot sizes to maximize their profit. It is a no win game unless you have tons of money and can move out of the city and go custom on acreage.

Even with the larger lot sizes, the front width of the lots are typically less than 50ft wide and expand as you go back. Result is that your neighbor is right smack dab next to you and is usually closer to you than if you would purchase a standard 50ft wide lot. Corner lots are a little wider but in reality it isn't after subtracting for the sidewalk.

Yes you can get a 1/4 to 1/3 acre lot, but it won't be wide at the front where it counts.

[mastercone]

I agree and I admit I did not look at the bathroom options. Definitely a must for a separate tub and shower. Make sure there is a shower bench!

Originally Posted by jerryg

Amen. Especially with respect to the kitchen. That actually IS a must on my list, and unless I end up in a situation -exactly- like you're describing when I'm out there next week, I'll be renting. Another must on my list is the tub+shower in the master bath. I'd like a LITTLE bit of luxury there, for crying out loud
I need to get the current home sold, and I'd rather not be -that- squeezed, financially speaking.

[mastercone]

Originally Posted by banker

Excellent points. I agree 100%. However - the one point that the builder has in their favor is controlling lot inventory.

If I had expended a few more paragraphs I would have covered everything you mentioned in reply. Of course no one wants to buy the purple SPEC home that is half way out in the freeway and has graffiti on the fence before the ink is dry on the closing documents.

I prefaced my post with "If it were me......" Of course all of the considerations you have are equally important and if there was a nice SPEC home that excited your family's imagination, all of this would come in to play. I would even go as far as to travel from that neighborhood to and from work during rush hour just to see if it fit within my schedule.

I know how it is when you are on the house hunt. You're doing the right thing in being thorough. One oversight can come back to haunt you for years after you buy the house.

Yes, KB controls inventory but they want what you have more than what you want from them. Money. They may not act like it but they need sales to meet payroll. At least you are on top of it.