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neyveli, Home Buyer in San Jose, CA

Dr Horton - Is it worth to buy considering their price per SQFT

Asked by neyveli, San Jose, CA Sun Feb 17, 2013

Recently Dr Horton increased the price of 1617 SQFT home to 640K which is ~393 per SQFT. All other builders price range seems to stand between $335 to $345 per SQFT (Standard Pacific home price is 699K for 2070 SQFT).

Is it really worth buying a house by paying ~$58 more? Please advice on this.

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Hi Neyveli,

Let me make a few points before answering your question:

The majority of the SF Bay Area housing is experiencing a Seller's market on steroids. I’m seeing properties going over list by $100-125K (and sometimes 100% cash). Just today, I found a property with; get this, 63 offers!

I do not see this current market significantly waning until Q3-Q413 after many more Sellers are influenced to list their property (increasing supply) along with a slow increase in mortgage rates over the same time frame (reducing demand).

"Is it worth to buy considering their price per SQFT"

While important, the decision of which Builder home to buy is not just about price; and let's not lose sight of the fact many of the Builders are going to the Lottery system to sell their homes, so you may or may not be able to actually buy where you want to when all is said and done. In any case, there certainly is some level of value in how well the Builder's offering fits your needs (schools, commute, workmanship, layout, locality of services, etc).

Also, there will be an additional cost over the $58/ppsf between the two Builders coming from the likely additional increase in mortgage rates as we progress through this year. You may want to run some financing scenarios to test your personal financial “comfort zone”. Be sure you understand what circumstances allow a return of your deposit money, if applicable.

"Why You Do Need a Realtor® When Buying From a Builder"

1 vote Thank Flag Link Sun Feb 17, 2013
I'm guessing by the inquiry you like the layouts better, which is why you wish they were priced less.
in comparison shopping, ask the sales rep to explain what upgrades are included and compare that to what is being offered by the other builders. They may be offering more upgrades, larger lots or mayber they have a lower tax rate because they paid for the cost of running utilties to the homes vs. financig them through a Mello-roos bond.

A good test if anything is worth it, is to compare the competition to buy these homes vs. the alternative. If they both have similar difficulty in buying than your question is answered.

good luck

Web Reference: http://sunilsethi.com
1 vote Thank Flag Link Sun Feb 17, 2013
The inventory being so low and competition among buyers has increased the home prices.
Builders do increase the price based on the current market and demand. The price also depends on upgrades. Compare exactly what they are offering in floor plans, warranty, upgrades, closing costs and then make a decision. The prices are always negotiable. Have a Realtor who knows how to negotiate and help you to get a great house in this changing market.

Priya Viswa, MS
REALTOR®, Associate Broker
Mobile: (408) 707-8170
Email: pviswa@c21mm.com
Website: http://www.priyaviswa.com
1 vote Thank Flag Link Sun Feb 17, 2013
Hi Neyveli,

I have recently (Within 2 weeks) registered at least 10 clients at DR Horton, Standard Pacific (Piazza and Castello), Taylor Morrison, KB homes, Brookfield Homes Winwood and Mariposa at Jordan Ranch. Believe me, all the builders are increasing their prices $25-30K every two weeks in some cases.

Dr Horton prices were the most reasonable in that area and the demand was very high. The builder is using that demand to their advantage and raising the prices more than the other builders in the area.

All builders have a different per sq ft charge. There is no hard and fast rule about how much their per sq ft rate needs to be. So your decision should be based on how reputable the builder is, what you think of the floor palns, your budget and affordability, and the loaction of the home.

Some builders have very good standard options so you may not have to spend too much money on upgrades so that may be another factor to consider.

Make sure you take an agent with you so they can register you there. If you have not registered at other sales offices, please take advantage of what your agent can provide you. The builder will pay your agent a commission so it costs you nothing. I give my buyers a lot of inside scoop on how much the homes are going up in each phase, what the whole neighborhood resale homes are going for and if it makes sense to buy in that development. By getting an agent you have a lot to gain and nothing to lose.

Meena Gujral
Achievers Realty
0 votes Thank Flag Link Mon Feb 18, 2013
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