Paloma Lake and the future (Austin, Taylor: sales, rental, countertops)

[XLadylawX]

I'm considering the purchase of a home in Paloma Lake but I have some reservatins. It looks like the developers started out with ambitious plans for this development but it is obvious that these plans have been delayed or hindered due to the recent economic downturn.

Taylor Morrison and Drees have apparently suspended development in this Community. They no longer display models but they do still have signs up on particular lots. Taylor also still has 2 beautiful spec homes on the market but they may be languishing.

Right now, There are 4 active builders, Plantation Homes, David Weekley, Grand Haven, and Standard Pacific (which has two developments going).

I've priced out a home with all the desired upgrades and if the builder will come down 3% on the price, it looks like we would be paying in the neighborhood of $85 per square foot. Of course that does not include our fees and costs, just the house and upgrades.

I've priced homes in the nearby Settler's Park area and the Paloma Lake price is comparable or even a little lower than what they are offering in new and newish homes for in the Settler's Park area.

But what about the future? I know we cannot predict the future but if you've lived in the area for awhile, you may be able to offer me some valuable insight on the area or for the RE professionals, some important feedback about the fact that this community seems to be contracting (for now) on the development side.

Thank you.

[zach5150]

Well, my .02 is that Paloma Lake has some beautiful homes. The 'lake' is a nice feature of the community. The fact that there is a school to be built there is awesome for families. The price is nice. With all of these positives, my new bride and I decided to build in Walsh Trails for one simple reason. Paloma is east of 35, no trees, and an overall different feel than the west side where we are now. For the past 10 years, I lived about 2 miles from Paloma off of Red Bud/Hwy 79 (south of 79) and while it's certainly not a 'bad' area, I dont think it will retain it's 'affluence' in years to come because more people consider the west side more desirable. Anyway...it's a tough call. We came close to building in Paloma because it looks like it'll be a nice community. It's just that east of 35, it seems you can see a 'sea' of rooftops (especially around 45 and 130) and I think it's mostly due to the lack of trees and somewhat flat terrain as compared to west. Again, just my .02. Good luck with whatever you decide!

[jobert]

I thought you were looking for "snob appeal"

What happened?

[Mrs.JT]

I completely understand your reservatations. We almost considered pulling out of our contract for a home in Lake Forest because after visiting the Drees model home (The Hartford floor plan) in Walsh Ranch, we fell in love with it. The sales person at Walsh Ranch said he could build that floorplan for significantly less in Paloma Lake, but there were only a few lots that could accomodate that floorplan. We found a really nice corner lot in Paloma Lake, and we became a little anxious and almost went for it. Then my reservations kicked in.

If we built the Hartford at Paloma Lake, the house probably would've been one of the highest valued homes out there, and we were afraid our home might have trouble retaining a decent value if we ever decided to sell. At Lake Forest, a lot of the homes around us are custom, so we don't have to worry about the other homes bringing down our value. We just weren't sure the direction Paloma Lake is headed, so we decided against it. I also didn't like the long drive from 79. It just seemed like Paloma Lake sat in the middle of nowhere. We were also puzzled as to why there was no longer representation by Drees. We would have had to work with the sales person at Walsh Ranch. The development is nice, but in the end, we didn't want to take the risk. Lake Forest is established, and we had to be 100% with the decision. My husband still mumbles and grumbles about wanting The Hartford, though.

Meritage is building a nice spec home in Lake Forest Village III. It's off of Collingwood Dr. I'm not sure what you're looking for, but if interested, you might want to take a look. The street is beautiful.

[XLadylawX]

Originally Posted by jobert

I thought you were looking for "snob appeal"

What happened?

Not ready to buy yet and this is a temporary compromise until we can build our snobby manor home in Bee Cave in 2012. We do have our eye on a nice 1.3 acre plot of land though.

By way of further explanation though, the "stupid" owner of the house we are renting, informed us he wants to place this home on the market starting in September of this year (I think that is stupid given the state of the market and the time of year, especially since we are willing to sign another lease-It is his lawful right though).

As you can tell, I'm a little bitter about the whole thing since I am unemployed until at least November when I get my bar exam results. To add an extra layer of stress, we will be adopting an infant at the same time we will be expected to move. We are genuinely worried about this being a negative impact on our homestudy. Also, we are not willing to move into another rental a mere 12 months after moving from California. Buying a house will just give us some temporary stability until we get through the transition.

[centralaustinite]

Danger! Danger!

A "contracting development" is not a good sign particularly if you only plan to live there for a few years. Even in the best of times, existing homes do not appreciate in value until the subdivision is completely built out. If you have to sell in 2-3 years, it sounds like you will face competition from new builder homes where the builder can aggressively lower the price or worse, empty lots that are not being developed at all but "land banked" until things improve. Either way selling or even renting the house could be problematic.

If it really is temporary, buy a re-sale house in a solid neighborhood where it will be easy to re-sell. Resist the lure of the "new" and go for a house that you can re-sell easily, liquidity is worth far more these days than granite countertops!

Congrats on the baby, give renting again more thought, renting won't impact your homestudy, and keeping a cushion in savings is wise. good luck!

[Mrs.JT]

^^ Let me add that Lake Forest is a close out neighborhood, so this will tie into what Centralaustinite said. Meritage actually has two spec homes close to completion. The one I mentioned is in Village III, where there are many custom homes. The other speck home is in Village II. I believe this home is about 100K less than the speck home I mentioned in my previous post.

I think there might be one Drees spec home available, also.

Oh, and yes, congratulations on the baby!!

[XLadylawX]

Originally Posted by centralaustinite

Danger! Danger!

If it really is temporary, buy a re-sale house in a solid neighborhood where it will be easy to re-sell. Resist the lure of the "new" and go for a house that you can re-sell easily, liquidity is worth far more these days than granite countertops!

Good feedback. I don't think we will need to sell in a couple of years though. We plan to use the house as a rental property. Our thinking is that a new home would be the way to go because we would not have to worry a lot about maintainance for at least 10 years (in theory anyway). An existing home will necessarily require some updating and more expensive repairs.

As to renting, that is not an option for us because of the tax consequences. We are losing $21k a year on a house in California right now but because our income exceeds a certain amount, we are not able to deduct any of that loss. (We've recently been given this bad news by our accountant) In short, we are desperate for ANY Tax deduction. I guess our new widget will help though.

Thank you for your warm words of congratulations.

[centralaustinite]

Ah, well, wanting to use it as a rental changes the equation a bit but it makes the location rather than the condition of the house overall more important. I don't know anything about the location of Paloma Lake, is it desirable for renters? Close to employers?

If you go to Austin-Steve's blog (PM me for the link) you should read his posts on buying investment property for renting out, he has been in the trenches himself for decades and has helped many people make wise investments (and discouraged many more). He strongly advocates buying close-in existing houses for investment as a rental. There is a lot of good info at his site.

Be aware that the rents in Austin have not risen significantly, there are many many people out there who have to rent their home or investment property for below cost. Plus being a landlord can be a pain in the neck!

so sorry to hear about the house in CA, can you lower the asking price by $21K and just be done with it?

I don't think that an existing home would necessarily require much updating and repairs until it is closer to the 20-30 year mark. I would try to find a very very experienced realtor to help you sort everything out.

good luck with everything! Adopting can be very stressful but the rewards are so wonderful!

ca

[Exiled Texan]

I think you are buying with emotions. Understandable, but I hope you snap out of it. Resale and rentability of burbs like this is not really prudent.

We are buying right now, but we plan to live in it "forever".....whatever that is worth now a days.

We will be moving out of our current rental this fall. Lovely little vintage family home in a great central austin neighborhood. Great for a homestudy. Landlord does not want to sell or move back any time. Let me know if you want more details about the house.

FYI- When we listed our home while tenants were in it, we paid for one massive spring cleaning and weekly cleaning while it was showing. Seems like a fair ask to me.