Buying a new contructed house in an old established neighborhood (Austin: real estate, rental)

[andy110979]

Hi,

I am recently looking to buy a house in North Austin area. There is a rare empty lot in zip code 78758. David Weekly bought the land, and is building about 27 new homes there. The location is between Metric and Lamar, and north of Braker ln.

My concern is that the houses in the neighborhood are generally built in 70's or 80's. The average house sizes are also smaller. The school disctrict is not as good as some other zip codes. Thus the new contructed houses will be almost the most expensive houses in the neighborhood.

My real estate agent told me that these new houses are in a class of its own, so it won't be accurate to compared to the rest of the houses in the zip code. With the emergence of the Domain, and being so close to IBM, Pickle Research Center, it is acutally at a good location. I was also looking at zip code 78727, and my agent told me the new house at 78758 is a better deal and have better chance to appreciate.

I am a first time home buyer, and need some good opinions. What do you guys think? Is it a good idea to buy a new David Weekly house in zip code 78758 where most of other houses are older and cheaper?

Thanks,
Andy

[Trainwreck20]

Always a gamble buying the biggest or best in the neighborhood; however, you are correect in that there is an ongoing change to that area. If I was going to buy there, the questions for me would be:
- just how good a deal is it? How much more would a basically identical house cost in a more 'desireable' area or in an area where it was a median or below size house?
- How long are you going to live there? Do you believe that the values will appreciate due to the new 'amenities' or not?
- Is it exactly what you are looking for, and is it exactly where you want to be? If you don't have kids yourself, your only issue will be during resale when people will be looking at the schools.

Anyway, I have not been in that area in a while, but there is (or was) a large number of rental properties and such, and it was a fairly inexpensive area. I personally would worry a little about appreciation, depending on the exact set up of the community. Definitely need an HOA there, I would think, and I would also make sure that the builder is not selling the houses to rent out (though that is unlikely). Weekly makes a good home.

By coincidence, my starter home was in 78727 and it appreciated nicely between the time I bought and sold it (sold it last year). It was one of the cheapest, smallest in the neighborhood, and it definitely outperformed the rest of the neighborhood as far as percentage increase went. But 78727 is a varied zip code, too, and house values are dependent on where you locate within the zip. When I sold the house, the schools were a big factor to the eventual buyers, but there was at least one prospective buyer who did not care a lick about the schools and they would have paid more for the house if they could have managed to sell the one that they were in.

[pi168]

I watched this happen in Tulsa, OK
The schools and business change with the population...a lot of those 70s houses may be empty nesters now...
A resurgance area is risky but if it pays off it is a biggie...

[andy110979]

I was also looking at zip code 78759. Being in one of the best school district, the houses there are 25+ years old, but more than $120 per sq. ft.

In 78727, the scoldfied farm area is going about $100 per sq. ft. And century park is a little cheaper at about $95 plus per sq. ft. Houses there are about 10 year old.

The new David Weekly houses in 78758 are listed about $130 per sq. ft. with house sizes 2200 sq ft. and up, but I believe I could bargain down to about $120 per sq. ft. But average houses in 78758 are 30+ years old, going less than $100 per sq. ft., and average size is about 1600sq. ft.

I don't have kids, and do plan to live in the house for at least 3 or more years. The new house is a house that I would enjoy living in. I plan to get some roommates to help me on the payments. I want to be in North Austin, but not too far away from Austin city center. So far, I have only looked at 78727, 78759, and these new houses in 78758. But I like newer houses, and would also like the house to appreciate in value.


PS. The stats above are solely from my opinions after looking through some houses recently.

Thanks,
Andy

[llkltk]

Originally Posted by andy110979

Hi,

I am recently looking to buy a house in North Austin area. There is a rare empty lot in zip code 78758. David Weekly bought the land, and is building about 27 new homes there. The location is between Metric and Lamar, and north of Braker ln.

My concern is that the houses in the neighborhood are generally built in 70's or 80's. The average house sizes are also smaller. The school disctrict is not as good as some other zip codes. Thus the new contructed houses will be almost the most expensive houses in the neighborhood.

My real estate agent told me that these new houses are in a class of its own, so it won't be accurate to compared to the rest of the houses in the zip code. With the emergence of the Domain, and being so close to IBM, Pickle Research Center, it is acutally at a good location. I was also looking at zip code 78727, and my agent told me the new house at 78758 is a better deal and have better chance to appreciate.

I am a first time home buyer, and need some good opinions. What do you guys think? Is it a good idea to buy a new David Weekly house in zip code 78758 where most of other houses are older and cheaper?

Thanks,
Andy

The homes being built there are nice but I'd be wary of that area. I considered those homes months ago and drove the neighborhood and it seems not so great. Those homes are overpriced for where they are considering they border homes with trailers outside and aren't very well taken care of. I'd consider Mercedes Homes off of Parmer, they are building a new section called Enchanted Forest. Still North Austin and a much better location.

[austifornian]

I think you have surprisingly good instincts for a first time buyer and that all of your expressed concerns are valid. If your spidey sense starts tingling there is a reason for that. Trust yourself.

While neighborhoods change, real estate is really governed by the law of conformity. It is a good practice to keep your purchase price at or around the average for a neighborhood. Yes, the Weekly Homes are hard to comp because they don't conform to the neighborhood but they are also not a large enough group to form their own neighborhood. They will be always be defined somewhat by their surroundings.

Do not compromise on school district. This is one of the leading criteria that affect a properties desirability in the long run.

It you are thinking of going the new home route you might want to consider the Mueller development. I think there is a lot of potential in this development given its foundation in new urban design principles. If you are thinking of a resale home there are many opportunities in the areas you mentioned for 'newer' homes that will meet or exceed your needs.

[Austin97]

Originally Posted by andy110979

Hi,

I am recently looking to buy a house in North Austin area. There is a rare empty lot in zip code 78758. David Weekly bought the land, and is building about 27 new homes there. The location is between Metric and Lamar, and north of Braker ln.

My concern is that the houses in the neighborhood are generally built in 70's or 80's. The average house sizes are also smaller. The school disctrict is not as good as some other zip codes. Thus the new contructed houses will be almost the most expensive houses in the neighborhood.

My real estate agent told me that these new houses are in a class of its own, so it won't be accurate to compared to the rest of the houses in the zip code. With the emergence of the Domain, and being so close to IBM, Pickle Research Center, it is acutally at a good location. I was also looking at zip code 78727, and my agent told me the new house at 78758 is a better deal and have better chance to appreciate.

I am a first time home buyer, and need some good opinions. What do you guys think? Is it a good idea to buy a new David Weekly house in zip code 78758 where most of other houses are older and cheaper?

Thanks,
Andy

At corner of yaupon and texas plume a family sold a 15 acre plat and it is being subdivided. There is almost no new construction in the area, but there will be a bunch of new homes there. It is in the RR school district and is really good location.

Alternately I really like the older homes along oak knoll and that area. They are in your range on a $/sq ft basis, but smaller. You might need to completely renovate to update them, but that will definitely happen in that area over time.

The city is trying to make the north burnet area by the domain a second downtown. They plan to make it a walking area and very high density.

[austin-steve]

The new David Weekly houses in 78758 are listed about $130 per sq. ft. with house sizes 2200 sq ft. and up, but I believe I could bargain down to about $120 per sq. ft. But average houses in 78758 are 30+ years old, going less than $100 per sq. ft., and average size is about 1600sq. ft.

Trust your gut. It's not necessarily a bad idea, but you are asking all the right questions.

Sometime "pioneers" are greatly rewarded down the line for being brave enough to invest in an area in which others have not yet recognized the future potential. East Austin buyers of the late 1990s early 2000s would be an example of it paying off today big time.

On the other hand, there are equally as many people who buy into the hype or glitter of the promise an opportunity supposedly holds, never to see that promise fulfilled, or to see it take many years longer than anticipated. Never fall in love with a deal and always be willing to walk away.

That said, in general, I don't like to venture too far out ahead of the curve in an area. I don't mind going above the average and median prices if my gut tells me it makes sense and if the numbers are within a reasonable range. But I also put very high weight on school quality, almost to a fault. Poor schools have ruled out a lot of deals for me, including all of East Austin even to this day. The area you are considering has poor schools, so that should be something you make a conscious decision to ignore or consider along with your other factors.

Steve