Huttoparke Problems Continue, Values Suffer
It is with great fascination that I first saw last year Huttoparke home owners made sure that everyone knew how poorly their homes were built. They may have had no choice but to bring public attention to the problems they were having. The homeowners felt that Lennar was unresponsive to their complaints about poor construction quality. Lennar Homes did have some major problems with sheetrock cracking, foundation movement, and crumbling driveways as Huttoparke is built upon the clay farmland soil prevalent east of IH35 in Austin, and these homes were apparently not built with sufficient consideration given to the implications of expansive soil.
Today, yet another Huttoparke story in the Austin Statesman brings attention to the construction quality problems of the neighborhood, and reminds me why I don’t sell homes in these types of subdivisions in the first place. Never have, never will. We refer buyers who want those homes to other Realtors, mainly because I don’t want to sell poor product.
If you’ve followed my blog or read our investment page, you know that Sylvia and I believe, for most buyers, especially those seeking stability and appreciation, a home in an established neighborhood is a safer real estate purchase than venturing out to buy a new starter home on the edge of sprawl.
The reason is that you never know for sure what you’re getting into when you buy in these fast growing new starter home subdivisions. In this case, in Huttoparke, you would be living/owning a home in a neighborhood where the home owners have resorted to picketing the builder, putting signs in their yard to let everyone know how poorly built the homes are, plastering their vehicles with anti-builder messages, setting up websites to warn other buyers not to buy there, and in general driving their property values into the ground.
Let’s see what property values have done in Huttoparke the past few years:
|Year||Avg Sold||Median Sold|
In 2006/2007, when our phones rang daily with investors calling to buy in Austin, many didn’t like what I had to say when I told them I wasn’t interested in helping them buy a home in Hutto, Kyle or any other starter home area with supposed better cash flow. “It’s a bad idea” I would say.
Some would listen and buy older investment property closer in. Others would go find another Realtor and chase the better cash flow and cheaper prices out to places exactly like Huttoparke.
I wonder if the investor who purchased that $123,900 home in 2006, which is now worth $118,352 two years later, has enjoyed the “better cash flow”. Me, I like appreciation more than cash flow. I don’t care about cash flow insomuch as it’s not nearly as important as appreciation in the long run. I also don’t like contributing to the fragility of starter home areas by causing more rental property to be sold there.
Contrast the new starter home area and home with the 1986 home in South Austin, which may produce an ugly inspection report but which is situated in a developed area with big trees, established neighbors, known schools, local shopping and roads already in place, close to downtown, etc.
In short, less guesswork about what it will look like in 5 years. Less risk. More stability and protection against the soft market if it hits. Fewer miles to drive also. Yes, your home is smaller and older. But you don’t have activist neighbors driving down your home values by picketing your neighborhood entrance either.
I hope the owners in Huttoparke find resolution and all problems are resolved. I feel sorry for them. First time buyers have enough to think about without having to do legal battle with builders.