Bryan Merrill

Hi Kandis:

I am in the process of purchasing a home in the Avondale development. The price that you see on the model homes is very much a "retail" price based on the number of upgrades present in that unit. The Lucca has been the most popular model, so probably suffers has less market pressure than a couple of the others. The Luccas that are not yet built would start at the Internet price with additional costs for the upgrades you choose. Note that in Avondale, there are numerous standard features, which would be upgrades with most other builders. There may only be a couple of Luccas left to be built as the development is down to the last 15 properties.

That said, Pulte has been absolutely incredible in their desire and motivation to help get us into one of their homes. The sales staff have access to incentive programs, but as you might guess, they are still trying to get the most money possible out of each transaction. Because they are so heavily invested in the overall value of the community, the incentives are less directed at reducing the sales price and more about providing you a high value transaction; i.e. competitive interest rates, paying closing costs, discounting amenties, etc. What is different now than in previous years is that the builder is "motivated" to make you an offer of a lifetime. Some of your neighbors paid $600k+ for the same structure and lot size.

A real estate professional or mortgage broker familiar with the area can help you to determine if you are getting a fair and reasonable offer from the builder. They can get you recent comps for the same square footage. Of course, existing homes often sell for less than new homes, but not nearly as much as they were two years ago.

I would highly recommend that you have your agent call the sales office to schedule an appointment to see what it would take to get into one of the remaining Luccas. We finally decided to buy there, not just because we found the perfect floor plan in a great location within an incredible new community (more potential than anything remotely close to the Bay Area) , but Pulte guarantees the structure for 10 years. With all new appliances (warranted for two years) and equipment as well as state of the industry wiring, plumbing, and engineering, these homes will provide many initial years of low cost operation and maintenance.

If you're willing to look at the overall value, you wil easily close a deal in the $165-175 per sq ft range.

Good luck neighbor! - Wed May 7 2008, 00:44

What we're seeing now is more than an over stocked real estate market; it is a slump in consumer confidence as oil prices soar, affecting the cost of nearly everything else (cuz it ain't grown or built at Walmart), while home equity (the cash machine of the 90s) is falling. As soon as people realize that job growth is more important than holding inflation in check (that horse is already out of the barn), people will realize that good real estate deals in the Bay Area are generally rare. When people realize how incredibly motivated builders are to move inventory, the slump will end.

I'm buying my dream home this month in Mountain House. If it takes this market 5 years to correct itself, I will not regret it. In all reality, however, look for these important milestones to herald the end of real estate bargains:
-- the presidential election (public confidence boost)
-- the announcement of troop withdrawls (more consumer confidence)
-- the 5% mortgage rate (who could resist)
-- expansion of home improvement tax credits (the renters will think twice)
-- new state programs for recently foreclosed home buyers (some should be back in the game)
-- criminal conviction of scandalous loan originators (some should be out of the game)
-- new home prices start to rise (price per sq. ft.) - Sun May 4 2008, 05:27

Find a home you love and make an offer. The best deals are being made right now. You will never get as good a deal from a resale as you will from the builders...it is mind boggling what they are willing to do to keep their projects moving forward. INCENTIVES...INCENTIVES...and more INCENTIVES. A new home in a new community with a new utility district board election this fall. If you work in the East Bay, you cannot find more new home for the money, with commuter options available to Pleasanton, San Jose, and other employment centers. This is as close as you can get to San Francisco in a brand new, warrantied home with abundant upgrades for less than $500k. - Sun May 4 2008, 04:49

I'm paying 1.4% for my first year on a new home purchase in Mountain House, scheduled to close May 23, 2008. Considering that Brentwood and other Contra Costa communities are paying 1.5%, we're looking forward to the San Joaquin County difference. Plus, the builders are jumping out of their skin to close business...there's never been a better time to purchase in a better community in the Bay Area...and that is coming from a 46 year native (this will be my 24th home, 13th purchase transaction). - Sun May 4 2008, 04:33