Nov
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Buying a New Home Vs Building One on Balboa Island

I’m often asked by clients about the pros and cons of building a new home vs buying a spec home (new construction).  It comes down to 3 main things: time, money and involvement. The numbers used below are about average for other areas in Newport Harbor as well. ~ Steve Roose with Luxury Real Estate

Buy a New Home on Balboa Island

This process is quite simple and straightforward. Find one you like and make an offer! Open escrow, complete your due diligence, arrange financing (if any), close and move-in immediately. Currently, new construction is selling for $3,500,000 and up for a standard lot size on Balboa Island. On a 30′ lot, you get about a 2,500 sq foot home. These homes tend to be 3-4 bedrooms with a roof-top deck and 2 car garage.

Pros of Buying a New Home on Balboa Island

  • Move-In Immediately
  • Finance with Ease
  • Plans & Permits already Completed

Cons of Buying a New Home on Balboa Island

  • More Expensive than Building – Approx $500,000 or more.
  • Higher Property Taxes – Property taxes based on the sales price (Higher than buying a lot and building costs combined)
  • Low Inventory – Few homes to choose from. In this market there are usually 0-2 new homes available at any given time.
  • Possibly Lower Quality – Due to Investor’s Profit Margin

Available New Homes on Balboa Island

Recently Sold New Homes on Balboa Island

Build a Home on Balboa Island

For the right person, this can be a fun project to save a lot of money and get exactly the home you want. Although it takes just over a year to build, we are typically in an appreciating market. The OC Register forecasts 5% appreciation next year. With the costs of land and construction being much lower than what new homes are selling for, you will walk into over half a million in equity on day 1. Many clients are unsure of the permit process, which builders do a quality job at reasonable prices, and so on. I recommend professionals that have been in the business a long time, they are efficient and have a history of quality and happy clients. The right builder/designer, just like any other professional, will save you time, money and headaches. Currently, lot value is just under 2 million on Balboa Island. You can expect to get a 30′ lot for about 1.8 million today. Due to all the new construction on the island, we are seeing less multi-family properties (duplexes) as they are being torn down and replaced with new homes. Over time, this will lower density. Most of my clients are able to build a new home for just over 1 million, depending on finishings. If you built for 1.2m you have a final product at only $3,000,000. That is $500,000 less than buying new and you are getting the home you want… down to every detail!

One of my clients will have her Lido Isle home completed in January. She paid 1.6m for the lot and is building for 1.1m, bringing her total to $2,700,000. I’d currently value her home at 3.6-3.7 million. That’s $1,000,000 in equity! If you don’t have another home to live in during construction, you could lease a property for a year and still come out ahead.

Pros of Building a Home on Balboa Island

  • $500,000 or more in Equity
  • Lower Property Taxes
  • Choose # of Bedrooms and Design Perfect Floorplan
  • Get the Quality and Finishings you Desire
  • Easily Add an Elevator

Cons of Building a Home on Balboa Island

  • Over 1 Year To Build
  • Lots of Decisions
  • Slightly Complicated Financing with Potential Rate Change Over the Year

Properties Available Near Lot Value on Balboa Island

  • I have an off-market option on Diamond at $2,000,000.

  1. 4 beds, 4 baths
    Home size: 1,656 sq ft
    Lot size: 2,613 sqft
  2. 2 beds, 2 baths
    Home size: 1,233 sq ft
    Lot size: 1,199 sqft

See all Real Estate For Sale in 92662 zip code - Balboa Island.
(all data current as of 6/23/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Recent Home Sales Near Lot Value

Balboa Island Real Estate

  1. 4 beds, 4 baths
    Home size: 3,000 sq ft
    Year built: 1948
    Days on market: 571
  2. 2 beds, 4 baths
    Home size: 2,818 sq ft
    Lot size: 2,549 sqft
    Year built: 2012
    Days on market: 134
  3. 6 beds, 7 baths
    Home size: 3,300 sq ft
    Lot size: 3,919 sqft
    Year built: 1960
    Days on market: 117
  4. 4 beds, 4 baths
    Home size: 2,133 sq ft
    Year built: 1948
    Days on market: 217
  5. 4 beds, 4 baths
    Home size: 2,391 sq ft
    Lot size: 2,178 sqft
    Year built: 2014
    Days on market: 123
  6. 3 beds, 2 baths
    Home size: 920 sq ft
    Lot size: 2,563 sqft
    Year built: 1948
    Days on market: 417
  7. 3 beds, 4 baths
    Home size: 2,304 sq ft
    Lot size: 2,613 sqft
    Year built: 2007
    Days on market: 32
  8. 3 beds, 3 baths
    Home size: 1,339 sq ft
    Lot size: 2,178 sqft
    Year built: 1956
    Days on market: 38
  9. 4 beds, 5 baths
    Home size: 2,090 sq ft
    Lot size: 2,613 sqft
    Year built: 1972
    Days on market: 27
  10. 0 beds, 0 bath
    Home size: 2,090 sq ft
    Lot size: 2,613 sqft
    Year built: 1972
    Days on market: 32
  11. 5 beds, 5 baths
    Home size: 2,200 sq ft
    Lot size: 2,178 sqft
    Year built: 1992
    Days on market: 5
  12. 4 beds, 4 baths
    Home size: 2,094 sq ft
    Year built: 1944
    Days on market: 124
  13. 4 beds, 4 baths
    Home size: 1,656 sq ft
    Lot size: 2,613 sqft
    Year built: 1966
    Days on market: 33
  14. 2 beds, 2 baths
    Home size: 1,233 sq ft
    Lot size: 1,199 sqft
    Year built: 1952
    Days on market: 79

See all Balboa Island Homes For Sale.
(all data current as of 6/23/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

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