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We wanted a modern house when we moved to town last year and had the hardest time finding anything. All of the remodels were so generic - I felt like if we'd seen one, we'd seen them all. Touches of modern design but almost completely mired in "please the masses" elements. mid-range stainless appliances, builder-grade cabinetry, hand-scraped wood floors. We were looking in PV and Central Scottsdale and there were really only 2 legit modern homes on the market in our price range, which was very wide. One in PV that was a garbage remodel that they wanted $1.3m for and one in McCormick Ranch that didn't have enough bedrooms for us and there was no space for addition.
And forget about the new homes, the only new builds that were modern are the K-Hov houses north of the 101 and although they have AWESOME interiors (Piet Boon design), the exteriors totally betray the design integrity of the interiors and look like pretty much everything else you see.
I can tell you, it was very frustrating. We ended up just buying an older house in Scottsdale and gutting it and doing a modern interior remodel and now we have plans to address the exterior of the home and re-do it this year (or next) and get what we originally wanted. It has a flat roof so we are pretty sure we can get a good modernist home out of this place when we're done.
My point being - there is a population out there looking for quality unique (modern) homes and remodel is the only way its going to happen since the new builds are all the same. I don't know if this population is large enough to constitute true demand in the marketplace but if so, there is almost no supply out there. We all know what happens when supply trails demand, prices rise and I believe there is an opportunity to make good money doing a low number of quality, modern remodels in the valley.
Therefore, if you are a contractor doing remodels and you want to do 50 homes per year, I guess you need to go generic to get them sold. But I also think you aren't going to get above-market pricing. But, if you are only wanting to do 5 per year, then I think there is a buying population out there that would pay more money for something different. In our case, modern.
I guess it all comes down to whether there is enough demand out there. I'd argue that there is. Look at all the Optima condos/apts that have gone up. These aren't done using "generic" design elements and they appear to be selling just fine.
Just my thoughts, I'd look forward to hearing rebuttals.
Therefore, if you are a contractor doing remodels and you want to do 50 homes per year, I guess you need to go generic to get them sold. But I also think you aren't going to get above-market pricing. But, if you are only wanting to do 5 per year, then I think there is a buying population out there that would pay more money for something different. In our case, modern.
There is just not any data to back up this opinion. Investors go into a property purchase knowing "I can get $330K for this house if I put this, this and this in it, which will only cost me $15K, so I want to get this property for $XX and no more". There is data for such houses selling with those upgrades. Spending money on something unique, and now risking the marketability of the property, probably adding more days on market and higher carrying costs, etc is not good business practice. This is the kind of thing you may see on TV in Beverly Hills with all the cool unique features, it doesn't really work in our market.
What you said about wanting modern, I see a lot of rehabs with modern finishes. Scottsdale is known to draw people that love the old west and may prefer rustic, southwestern style, but there is also the element that likes the modern finishes as well, particularly in South part of Scottsdale where younger people live.
There is just not any data to back up this opinion. Investors go into a property purchase knowing "I can get $330K for this house if I put this, this and this in it, which will only cost me $15K, so I want to get this property for $XX and no more". There is data for such houses selling with those upgrades.
The data I'm referring to is simply the supply/demand curve. How does the investor know that he can get $330k for this house? Because that is where the supply and demand curve cross for that segment of the market (people looking for a home like that). My feeling during our search was that there was very little supply of modern homes, and we were willing to pay more to find one. My question at the time (and now) is whether there are others like us or are we complete outliers.
Quote:
Originally Posted by asufan
Spending money on something unique, and now risking the marketability of the property, probably adding more days on market and higher carrying costs, etc is not good business practice. This is the kind of thing you may see on TV in Beverly Hills with all the cool unique features, it doesn't really work in our market.
When you say what works in BH doesn't work in our market, I guess what you are saying is that there isn't a significant enough population looking for "cool unique features" (modern in our case) to warrant providing a supply of homes to serve them.
I won't necessarily argue with you. You guys who make your living doing the buy/flip thing obviously live and breathe our real estate market whereas I'm just on the outside looking in.
The data I'm referring to is simply the supply/demand curve. How does the investor know that he can get $330k for this house? Because that is where the supply and demand curve cross for that segment of the market (people looking for a home like that). My feeling during our search was that there was very little supply of modern homes, and we were willing to pay more to find one. My question at the time (and now) is whether there are others like us or are we complete outliers.
When you say what works in BH doesn't work in our market, I guess what you are saying is that there isn't a significant enough population looking for "cool unique features" (modern in our case) to warrant providing a supply of homes to serve them.
I won't necessarily argue with you. You guys who make your living doing the buy/flip thing obviously live and breathe our real estate market whereas I'm just on the outside looking in.
I'm saying what you may see on the TV shows with the unique cool features that make for great TV are not really realistic, at least not here. Here the houses, even in the 1-2mm market are pretty much from the same or similar floorplans, there's comps for everything. In a market like I describe, you have mile after mile of 5mm-10mm+ all custom properties with differing views, etc and a steady supply of eccentric buyers and no real supply of "comps" to show you what the house is really worth. People pay for what they want. It's not realistic here to have some wacky design and expect to get MORE for it.
I think you an I are not on the same wavelength. What you want in "modern" design is not what I am describing as "unique" -- it is what is popular now. I checked out some model homes in Chandler recently and they are all designed with the modern design, even the exterior elevations are trying to be more modern. If you are ever interested in looking at some modern design ideas, check out the model homes in Avian Meadows (Ashton Woods and Toll Brothers), it's a bit of a drive but worth it if you need any ideas. I think this trend is the most popular right now, and is not what I was describing when I was talking about "unique" features.
Totally an opinion, because I haven't done a ton of research on remodels, but I think the finishes reflect market conditions.
Flippers here seem to focus on current builder-grade, not really high-end finishes, because even a lipstick remodel will give a better experience than a not-remodeled, and the market is price-sensitive. On the other hand, in an appreciation market like California, they might spring for high-end finishes, because buyers can think of the added cost as more of an investment.
If it's a homeowner getting out of a house without a lot of equity, or even underwater, I'd say they're unlikely to spring for high-end finishes for similar reasons.
Every home we have purchased came with a budget for light upgrades shortly after purchase. Now that we are in our "30 year home" (yeah right...we'll probably move in 2 years) we bought below our price point with the intention of upgrading/remodeling over the long term and make it our space. Some of our plans are expensive (You know...we could knock out that wall and extend the roof over here...) some are just landscaping and paint but almost everything we have done in the past we have done ourselves. Besides we really aren't fond of the "upgrades" in some of the homes here. We hate stainless steel...granite is just ridiculous...actually like white cabinets in the kitchen...etc. Guess if we move our house won't sell
I'm saying what you may see on the TV shows with the unique cool features that make for great TV are not really realistic, at least not here. Here the houses, even in the 1-2mm market are pretty much from the same or similar floorplans, there's comps for everything. In a market like I describe, you have mile after mile of 5mm-10mm+ all custom properties with differing views, etc and a steady supply of eccentric buyers and no real supply of "comps" to show you what the house is really worth. People pay for what they want. It's not realistic here to have some wacky design and expect to get MORE for it.
I think you an I are not on the same wavelength. What you want in "modern" design is not what I am describing as "unique" -- it is what is popular now. I checked out some model homes in Chandler recently and they are all designed with the modern design, even the exterior elevations are trying to be more modern. If you are ever interested in looking at some modern design ideas, check out the model homes in Avian Meadows (Ashton Woods and Toll Brothers), it's a bit of a drive but worth it if you need any ideas. I think this trend is the most popular right now, and is not what I was describing when I was talking about "unique" features.
I was curious so I looked it up. Here is a spec house in Avian Meadows. It looks like any other stucco box. I don't see anything modern about it except maybe some of the tile choices. I don't think this is what the poster is referring to; at least it's not what I think of when I think modern.
What I've found interesting here is that even in the higher brackets (not highest) of $750,000 to $1,000,000, (mainly North Scottsdale) price seems to be driven by square footage more than upgrades. Many of the homes I've looked at have very basic kitchen cabinetry, whether it's fairly new or whether it is 10-15 years old. There doesn't seem to be an emphasis on higher-end or quality finishes in many of the homes. Perhaps, it's just that the standard cabinetry appealed to a swath of buyers who didn't want to invest more in custom finishes. This isn't true across the board, but there is an abundance of $800,000 houses that look just like one another on the interior, even though they were custom or "semi-custom" built. Carefree and Cave Creek seem a little better in this regard. I'm not saying they aren't out there, it's just harder to find, no matter what "style" one is looking for. Again, it's a generalization, but it's more prevalent in Phoenix than in the Midwest.
I was curious so I looked it up. Here is a spec house in Avian Meadows. It looks like any other stucco box. I don't see anything modern about it except maybe some of the tile choices. I don't think this is what the poster is referring to; at least it's not what I think of when I think modern.
They have different elevations. The exterior elevations I was speaking about are the Toll Brothers, the interior of both builders models are modern. I was just trying to convey the message that what he is looking for in modern design is what is popular and has been for a few years.
Here's a Toll Bros house with more modern exterior:
They have different elevations. The exterior elevations I was speaking about are the Toll Brothers, the interior of both builders models are modern. I was just trying to convey the message that what he is looking for in modern design is what is popular and has been for a few years.
Here's a Toll Bros house with more modern exterior:
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