For the majority of Colorado home buyers, when you declare you are buying a new home what you are really referring to is the purchase of a resale home that’s new to you. While many of us may dream of building our perfect place from the ground up, the closest we truly get to that reality is perhaps remodeling an existing home to create that custom living space that is our target goal.
In this current marketplace, maybe now the timing is right to buy that brand new home?
WHY OR WHY NOT?
For openers, new homes are generally higher priced than resale homes. In fact, the NATIONAL ASSOCIATION OF REALTORS' Profile of Home Buyers and Sellers found the typical new home sold for $277,000 in 2015, while an existing home cost around $209,000.
However, with the low interest rates and low down payment loan packages this doesn’t present quite the obstacle it once might have presented that discouraged many from buying new.
Although a bit more planning, and patience, is required for a new built home, it may now be the best option for many of those home seekers disappointed by the depressed inventory of resale homes available.
One word of caution; once you’ve located a suitable building lot in your preferred area, always hope for the best but be prepared for the inevitable delays and unexpected expenses that come with even the most carefully laid out plans.
FACTORS AFFECTING CHOICE?
AFFORDABILITY
Back in the 1980’s new home sales were at their strongest sales, peaking at around 30% of all home sales closed. Since then, material price increases have pushed costs up and resulted in slowing the rate of construction based on demand.
AVAILABILITY
Additionally, the economic setbacks of 2000 - 2007 and the effect they had on the real estate market made funding new housing developments a difficulty, causing sales to drop considerably. Over the last 4 years, new home sales have dropped to just 16%, barely over half of the real estate residential sales they once accounted for. That is changing and construction has increased considerably in efforts to meet consumer need.
RESALE OR NEW BUILD?
Whether to purchase existing housing or purchase a newly built home is a highly personal decision. Construction of a new custom home mostly remains a higher price alternative to purchasing a resale home, but a new build in a development offering 2-3 models to choose from is a more affordable, and viable option.
New home construction conditions continue to improve, making this an attractive choice for those with definite ideas about what they want in a home.
Aren’t you glad your choices have moved beyond colors, flooring and appliances to include entire developments devoted to things that matter to you?
- Being fully green friendly
- Promoting walkability as a priority
- Renewable energy as a resource
Interested in a specialty development or the desire to explore the possibilities of planning your brand new home? Contact me and we can discuss the next and best steps to take.