Buy or rent at Kelsey Lane in Oak Creek

31 Kelsey is a 4 bedroom, 2.5ba detached home in the Kelsey Lane tract in Oak Creek.

Kelsey Lane is a tract in the southern most part of Oak Creek and is bounded by the 405, Sand Canyon Ave, Alton Parkway, and Valley Oak. Click the picture below for a closer view.

There are 3 main floor plans in Kelsey Lane:

  • Plan 1: 3 bedrooms / 2.5 baths / 1653 square feet

  • Plan 2: 3-4 bedrooms / 2.5-3.5 baths / 1910-2379 square feet

  • Plan 3: 4-5 bedrooms / 2.5-3.5 baths / 2079-2546 square feet

Plans 2 and 3 have a third floor option which explains the extra bed/bath/space.

In addition to 31 Kelsey, there are a couple of Plan 3s that have not quite closed:

– 82 Millbrook is bank owned, listed at $659,000, and the status is Hold Do Not Show. They are accepting offers and will submit offers to the bank on 3/5/12.

– 104 Millbrook is a short sale listed at $600,000 and the status is Backup Offers Accepted.

I didn't come across any Plan 3s that had closed recently. The closest I could find in the tract is a Plan 2x (3rd floor model) – 66 Ivywood which sold for $749,000 on 2/7/2012.

31 Kelsey is listed at $699-$739k. For the analysis below, I'll use a purchase price of $675k.

Purchase Price $675,000
Closing costs $20,250 3%
Total price $695,250
Down payment $155,250 20%
Loan Amount / Percentage Of Price $540,000 80%
Interest Rate / Period (months) 4.25% 360
Monthly Yearly
Mortgage Payment $2,656 $31,878
Interest Component $1,913 $22,950
Property Tax $582 $6,978 1.03%
Special Assessments $247 $2,969 0.44%
Effective Tax rate 1.47%
Insurance $50 $600
HOA 1 $59 $708
HOA 2 $79 $948
Cash Out $3,673 $44,081

There are some possible adjustments that may apply to your situation. Be sure to also consider how long you may own the property (average is around 6 years), what kind of financing you actually qualify for, how much you put down, the effect of giving up the standard deduction, potential price declines, costs to sell the property, etc. The NY Times Buy or Rent calculator is a great tool that helps with some of these.

Possible Adjustments
Interest paid $22,950
Property tax $6,978
Total deductible $29,928
Tax benefit $624 $7,482 25%
Opportunity cost of down payment -$259 -$3,105 2%
Principal paid in mortgage payment $744 -$8,928

As far as rents, I found a couple Plan 3x models (third story option) that leased for $3300 (52 Kelsey on 11/3/2011) and $3250 (35 Pembroke on 9/3/2011). I also found several Plan 2 models that leased between $2700-$3195. I'd guess 31 Kelsey might fetch a rent of $3100/month.

So, would you buy 31 Kelsey for $675k or rent it for $3100/month?

Discuss below or at Talk Irvine.

Similar Homes. Different Villages.

Two properties that we will compare today have a lot in common. They have similar floor plans. They have the same square feet area. They are situated in two beautiful villages of Irvine. Their schools have the desirable range of API and test scores. Both have two Home Owner Association dues. The similarity doesn’t end here, they are both extremely close to ‘Eastern Transportation Corridor’. Shopping districts, proximity to freeways and hospitals is also a tie. Still, there is a price difference of $129,000. Which one would you buy?

68 Hedge Bloom

97 Sapphire

Village

Woodbury

West Irvine

Area

1503 SF

1500 SF

Bedrooms/ Bathroom

3 Beds/2.5 Bathrooms

3 beds/ 2.5 Bathrooms

Listing Price

$495,000

$366,000 (Sold on 02/17/2012)

Price/ SF

$329

$244

Elementary School

Woodbury Elementary

API Rank 9, K-6

API Growth Score 918

Language Arts 75%

Math 90%

Myford Elementary

API Rank 10, K-5

API Growth Score 951

Language Arts 81%

Math 92%

Middle School

Sierra Vista Middle School

API Rank 10, 7-8

API Growth Score 948

Language Arts 86%

Math 79%

Pioneer Middle School

API Rank 10, 6-8

API Growth Score 939

Language Arts 83%

Math 73%

High School

Irvine High School

API Rank 10, 9-12

API Growth Score 881

CAHSEE Math 95%

CAHSEE Language Arts 95%

Arnold Beckman High School

API Rank 10, 9-12

API Growth Score 866

CAHSEE Math 92%

CAHSEE Language Arts 92%

Home Owner’s Dues

$174 + $134 = $308

$170 + $55 = $ 225

Mello Roos

$2836.12 annually

236.34 monthly

$847.63 annually

$70.63 monthly

Mortgage assuming 20% down payment, and 30 YR Fixed at 3.875%

$1862 monthly

$1376 monthly

Property Tax

(Excluding Mello Roos)

$5240 annually

$437 monthly

$3874.48 annually

$323 monthly

Fixed Cost of owning

$2843 Monthly

$1995 Monthly

If you buy 97 Sapphire instead of 68 Hedge Bloom, and make an extra payment of $848 per month (monthly difference in fixed cost of owning), you will be paying off the loan sixteen years early. Also, there is an option of going with a 15 YR Fixed mortgage. But going by the state of economy and the housing market, would you pay off your mortgage early or build an extra savings fund with the same amount?

97 Sapphire sold for $307,500 in 2001. The owner sold it for $579,000 in 2005. Within four years, he was able to make a profit of $249,600. The house earned $62,400 each year of ownership. But it wasn’t a lucky investment for the next owner. In June 2011, the property was listed for $420,000 and the numbers were chopped off on a monthly basis trying to keep in tune with the market trends. In the end, it was a Short Sale for $366,000. The owner lost $213,000 in six years. That is a loss of $35,500 per year.

68 Hedge Bloom hasn’t built an extensive history yet, it was built in 2010. But, 148 Hedge Bloom, another version of the same floor plan, a little smaller can be a good comparison. It was sold at $436,000 in August 2010. But by August 2011 it was on the market, listed at $449,000. The house sold for $410,000 in September 2011. That’s a loss of $26,000 within a year. Another property, 35 Peony was listed for $549,000 in August 2011, and the listing price is revised to $515,000 now. The house is still on the market with a $34,000 discount. According to a listing description, a thousand people registered to buy these Woodbury homes. No takers for barely two year old houses now?

A decade ago, people used to share stories of lining up all night at the builder’s office to register for a new home, and buy the best floor plan before it was sold out. These days people share stories of the ‘good deals’ they got, or the ‘good deal’ they are waiting for. Sure, things aren’t as bad as for the rest of the country, but Irvine wasn’t immune to the discounts and price cuts as the Realtors of the Bubble predicted. All of us who toured an open house in 2008 were told that that was the worst Irvine would ever see. Recently Dow Jones climbed to 13,000. The last time it was at 13,000 was in 2008. The stock market has showed signs of improvement and so have other markets. But the same cannot be said about the housing market. The worst might be over, but it isn’t seller’s market yet. Here is a quick comparison of facts from the ‘worst Irvine could ever see’ to the ‘state Irvine is in now’.

2008

2011

Median List Price

$500,000

$422,000

Median Sold Price

$480,000

$400,000

Median List Price/SF

$370

$309

Median Sold Price/ SF

$349

$284

What do you think about the summer this year? Will it be a buyer’s paradise, or will the seller cash in on low inventory and buyer desperation?

Discuss below or at Talk Irvine.

Closed Sales from 2/16/2012 to 2/22/2012

Date Sold Address Zip Tract Sold Price Beds Sq Ft
El Camino Real
2/16/2012 4912 Gainsport Cir 92604 El Camino Glen $454,000 4 1202
2/16/2012 15302 Touraine Way 92604 Ranch $647,000 4 2082
2/21/2012 90 Oval Rd 92604 Walnut Square $265,000 2 1059
Northpark
2/16/2012 67 Olivehurst 92602 Auburn $410,000 3 1550
2/17/2012 5 Poway 92602 Miramar $880,000 4 2810
2/21/2012 68 Meadow Vly 92602 San Simeon $525,000 3 1500
Northwood
2/16/2012 60 Streamwood 92620 Irvine Springs $142,500 1 639
2/17/2012 32 Torrey Pine 92620 Camellia $957,000 5 3100
2/22/2012 21 Streamwood 92620 Irvine Springs $141,500 1 639
Orangetree
2/17/2012 167 Tangelo 92618 Lake Condos $258,000 2 954
Quail Hill
2/17/2012 78 Figtree 92603 Soltice $620,000 3 1900
2/21/2012 71 Stepping Stone 92603 Casalon $476,000 3 1582
Stonegate
2/20/2012 53 Kingsbury 92620 Maricopa $1,004,073 4 2974
Turtle Ridge
2/20/2012 105 Canyoncrest 92603 Chantory $510,000 2 1150
Turtle Rock
2/21/2012 10 Rocky Gln 92603 Glen Townhomes $620,000 2 2033
University Park
2/19/2012 4355 Sandburg Way 92612 Village II $542,000 4 2000
2/21/2012 44 Acacia Tree Ln 92612 Village III $565,000 3 2072
West Irvine
2/17/2012 97 Sapphire 92602 Mandeville $366,000 3 1500
Woodbridge
2/17/2012 10 E Elderwood 92614 Willow Creek $425,000 2 1301
Woodbury
2/17/2012 50 Serenity 92618 Santa Rosa $348,000 1 1120

The Neighborhood of University Hills

University Hills is the University of California, Irvine's campus housing community for individuals holding full time employement at UCI. Seeing some of the homes in University HIlls from Bonita Canyon makes me want to get a job at UCI. Part of the appeal is that it's kind of exclusive. It's not like other parts of Irvine where (as long as you have enough money), you can buy or rent in any neighborhood. The other draw is that the homes are so said to be much more affordable than their equivalents down the street in other parts of Irvine.

According to the Irvine Campus Housing Authority website, “University HIlls…is generally regarded as the most successful on-campus housing program of its kind in the country.” It is an academic community in residence to provide affordable housing to eligible full time employees of the University of California, Irvine. University HIlls is located on the South end of campus, and is bordered by Anteater Drive, Los Trancos Drive, Gabrielino Drive, Vista Bonita Drive and California Avenue.

Community Map

Note: Information from http://www.icha.uci.edu/

Within University HIlls there are three apartment communities, two condo associations, townhomes, paired homes, single family detached homes, and even a few custom homes. It has 250 apartments for rent and 940 for-sale homes on over 200 acres of University owned land. There are several recreation areas that include parks, pools, volleyball, basketball, and tennis courts, tot lots, barbeque and picnic areas. The amenities are quite nice; check out the University Hills Community Center:

I took a drive around University HIlls and like many neighborhoods in Irvine, I saw manicured landscaping, lovely parks, nicely kept walking paths that were well lit for evening strolls, young children on the street playing, and of course, seemingly close together homes with little to no yards. There really were some nice paths to walk on, accompanied by sitting areas with vista points providing views of Turtle Ridge, the University, most of Irvine and beyond and the airport area.

Children who live in University Hills can attend University Montessori, Turtle Rock Elementary, Rancho San Joaquin Middle School, and University High School, though only the Montessori is within short walking distance.

FOR SALE HOMES:

As you can imagine, the for-sale homes are highly sought after and a priority system has been put in place to help sort through requests. According to the ICHA website, “on average, approximately 25-35 resale homes are available for sale each year, including new homes.” Full time University employees are entered on a waiting list for homes based on the following priority system:

  • Newly recruited members of the Academic Senate and the Senior Management Group (“newly” is defined as within 1 year)

  • Current members of the Academic Senate and the Senior Management Group

  • Newly recruited members of the University's non-Senate Academic Staff and Management and Senor Professional Group (Examples of these include clinical and adjunct professors, lecturers, post doctoral and profecssional researches, specialists and librarians)

  • Current Academic Staff and Management and Senior Professionals

  • Other University Staff

All homes in University Hills are located on lots OWNED by The Regents of the University of California and are LEASED by the Irvine Campus Housing Authority. Homeowners then essentially SUBLEASE the land upon which their home sits. According to documents on the site, subleases are long term and end in 2082. The ICHA gives three payment plans to pay land leases.

There are three restrictions in reselling University Homes:

  1. You must try to sell to the University, the faculty or staff when you decide to sell. If you can't sell within a specified (?) period of time, and the University doesn't exercise its option, you may sell your home to a member of the general public. That person would be subject to the same terms. My guess is that there's pretty much always faculty or staff that is interested in buying the homes in University HIlls and if by chance a home did not sell, the University would buy it temporarily.

  2. Resale prices of homes are restricted. Ground Sublease indices control pricing in University Hills with the intent to provide affordable housing and to prevent the homes from serving as speculative investment vehicles. Get outta here, flippers!

  3. If the circumstances of employment with the University change, you may no longer be eligible to own in University Hills.

Currently, new homes are under construction off of Gabrielino. Because the homes have been constructed over the last 25 years, it's an interesting mix of homes within the area of a typical village in Irvine. The older ones are much like what you'd see in Woodbridge and as the styles in Irvine changed over the years, so did the styles with University Hills. You can see the various floorplans here. Of course, the homes are somewhat cookie cutter and any exterior changes must be approved by the ICHA.

RENTALS:

There are three unfurnished on-campus apartments available for UCI personnel:

  1. Gabrielino Apartments – the smallest of the three apartment complexes. Gabrielino offers Junior and 1 Bedroom apartments with 1 bathroom. They are 560-750 sq ft and cost $1035-$1205 per month

  2. Las Lomas Apartments – 2-3 bedrooms with 1-2 baths. These units are between 970 and 1200 sq ft and cost $1290-$1590 per month.

  3. Santiago Apartments – 1-3 bedrooms with 1-2 baths. Units here span the greatest range – 632-1254 sq ft and cost $1212-$1844

Priority is given in the same sequence as the home sales above and faculty, academic and University staff are eligible to stay up to 5 years.

Additionally, there are three Furnished Short term apartments for rent:

  1. Sage at Gabielino Apartments – Jr 1 BR, 1 Bath – 560 sq ft – $1575

  2. Willow at Gabrielino – 1 BR, 1 Bath – 650 sq ft – $1788

  3. Amapola at Las Lomas – 2 BR, 1 BA 970 sq ft – $2010

Not cheap! Do any of you live in University Hills? What do you like about living there? Any drawbacks? What's it really like? What do taxes, home owners association dues (or their equavalents), etc add up to? Anyone know how much these homes actually sell for?

Discuss below or at Talk Irvine.