Cohousing-L Mailing List: RE: Home price for cohousing, over price of surrounding comparable houses

[Eileen McCourt (emccourt]

Some but not all of the homes at Oak Creek Commons were appraised lower
than the home price by 10%-15%.  The main reason for the low appraisals
were interior upgrades, but the fact that the common house was not yet
completed was also a factor.  

I agree with Chris on standardization.  One of the mistakes we made was
to standardize on a lower quality of fixtures and finishes than most
people wanted, thinking this would keep the homes more affordable.  We
wanted people to upgrade after construction.  However, our developer
encouraged us to offer upgrades as part of the construction process,
since the quality was low in the flooring, plumbing fixtures, showers,
cabinets and countertops.  In the end, this meant that almost every
household had upgrades, which were extremely costly, because we paid a
premium to the contractor and the developer for the upgrades, and we
were also charged by our developer for managing the upgrade process
which was complex. We lost the lowest income families for other reasons
related to their general ability to qualify to purchase a home, and this
was partly because our homes had a high quality of building construction
which increased the home prices. 

So, I agree with standardization, but make sure you have a level of
quality that meets the needs of a broad cross section of buyers, or you
will be putting money in the developer's pocket and costing yourselves
and future buyers more money.  I think our original plan of not offering
upgrades would have been a better plan had we selected standards that
were more middle of the road than going low as we did.  I don't regret
the quality of building construction, however, because it has really
reduced the cost of heating and cooling my home.

Eileen McCourt
Oak Creek Commons Cohousing
Paso Robles, CA
 

-----Original Message-----
From: Randy Sailer [mailto:randy.sailer [at] oit.umass.edu] 
Sent: Thursday, November 17, 2005 7:30 AM
To: cohousing-l [at] cohousing.org
Subject: RE: [C-L]_ Home price for cohousing,over price of surrounding
comparable houses

Our home was appraised (for our mortgage) at about 10% more than the  
price we paid including the value of our part of the common  
facilities (common house, parking lot, land, site work; they are part  
of the value of the home).

The more you (you, your architect, your builder) standardize fixtures  
and materials, the better the deals  you will get. For example our  
builder gave us a choice of two kinds of interior doors for the  
entire complex. For 28 homes, this is a lot of doors. He was able to  
buy in bulk and get a very good deal on high quality doors (similarly  
on roofing, door knobs, floor tile, wood for floors, bathroom  
fixtures, etc.).

The common house is unusual (compared to other developments). The  
common house works out to add about $20,000 per home in cost (less  
than 10% of home costs). As stated above, even with the cost of the  
common house included, the actual cost of our house was less than the  
appraised cost.

Randy
Rocky Hill Cohousing
Florence, MA


On Nov 17, 2005, at 6:16 AM, cohousing-l-request [at] cohousing.org wrote:

> Hi all,
>
> My group (Central Austin Cohousing) has been working under an  
> assumption that the initial price (i.e. not resale price) of a  
> cohousing home will be about 10 - 15% higher than the price for a  
> comparable (same square footage & construction quality) home  
> nearby. In other words, we have been assuming that the price for  
> the common facilities and other cohousing-specific costs average 10  
> - 15% per home.
>
> My question is, what was that ratio for your community?
>
> My goal is to get a handle on we should expect, and what we should  
> aim for, in terms of development costs/home prices.
>
> Thanks,
>
> Becky

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