Is Now the Time to Build a House?
With reports of bidding wars, low inventory, rising home prices and higher interest rates, buyers are struggling to find their ideal home, especially first time buyers. For buyers who have some money saved up and aren’t looking for historic homes or established neighborhoods, this could be the prime time to build a house instead of buy an existing one.
According to a recent NPR story by On Point, while demand for homes has come back, inventory is at a 20-year low. In fact, the latest numbers from the New Hampshire Association of REALTORs (February 2017) indicate that new listings are down 20% year-over-year, and the number of homes for sale is down over 30% compared to February of last year.
CNBC cites a lag in construction as one factor for stiff competition, noting that construction workers left during the recession and did not return, meaning some homebuilders still aren’t operating at normal levels.
What does this mean for buyers? Prepare to face stiff competition. The Eagle Tribune recently said that agents in the Merrimack Valley have seen homes go off the market as quickly as within a week – and some by the end of the day.
What is a Buyer to Do?
Buyers who are entering the market need to take a serious look at their strategy, and consider all their options. One of these options could be building a house. Rather than going toe-to-toe with other buyers for houses that might not check all their boxes, buyers can skip the bidding wars and spend time working with a builder to customize a home instead.
“With inventory on resales at an all-time low, buyers are able to look at a new home community and most times, choose their home along with lot location,” said Gail Nickerson, Manager of Verani’s New Homes Division.
Nickerson said many buyers like the idea of being the first owner of a home, and like being able to choose finishes and personalize their home. She said that interest in new homes has been on the rise, and builders are ramping up production as best they can.
“We have seen our weekend traffic of new prospects on the rise since January, and our number of pending sales is up from last year,” she said. “We see a rise in activity in our over 55 communities as well as single family homes.”
Benefits of new construction
Like any homebuying decision, opting for new construction comes with some trade-offs. You may pay more than an existing home, and you have to be patient as you wait for your home to be constructed. It also requires some involvement and research, as you need to find a builder who is the right fit for you and spend time selecting the features you want. But these trade-offs come with some significant rewards:
Peace of mind. Everything is new, so you won’t have surprise repair costs right out of the gate.
Latest technology. Buying new construction means the latest and greatest in energy-efficient appliances and heating systems. While these may cost more upfront, the energy savings long-term make it worthwhile.
Getting exactly what you want. When you build a house, you can often take their general or standard building plan and make reasonable modifications to suit the home to your tastes. This can include making materials upgrades or scaling the plans up or down to fit your needs. The end result is a home that matches both your style and your budget from the day you move in.
- Getting into a new neighborhood first. Buying new construction can be your opportunity to get into a development or neighborhood early and have your choice of lots, if you’re willing to tolerate neighboring construction while the development grows.
Ready to weigh the pros and cons of building a house to suit your needs? Visit our new construction page to see a variety of new construction opportunities, from land to detached condos to single-family homes.
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