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 $3,800,000 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

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 2 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 1.3-1.5 million depending on finishings. If you built for 1.5m you have a final product at only $3,500,000. That is $500,000 less than buying new and you are getting the home you want… down to every detail!

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

  • Approx 1.5 Year To Build
  • Lots of Decisions
  • Slightly Complicated Financing with Potential Rate Change Over the Year

Recent Home Sales Near Lot Value

Balboa Island Real Estate

 

3 Results
4
Beds
2 | 2
Baths
3,096
SqFt
(29)
 
 
#NP21142282 | Single Family Home
This listing is courtesy of Ryan Gunderson Abrams Coastal Properties
(CA BRE # shown above if in IDX data)
3
Beds
3 | 2
Baths
2,400
SqFt
 
 
#OC21126276 | Single Family Home
This listing is courtesy of Dina Clem Movoto, Inc
(CA BRE # shown above if in IDX data)
4
Beds
| 3
Baths
2,556
SqFt
 
 
#SW21225877 | Single Family Home
This listing is courtesy of Traci Hansen Allison James Estate & Homes
(CA BRE # shown above if in IDX data)
Based on information from CRMLS and/or CLAW and/or CRISNet MLS as of October 23, 2021 2:12 AM PT. All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information. IDX powered by iHomefinder, Inc.