Should You Consider Buying a Newly Built Home?

February 15, 2023February 15, 2023 / Broker Associate, EXP Realty LLC / Leave a comment

If you’re thinking about buying a home, you might be focusing on previously owned ones. But with so few houses for sale today, it makes sense to consider all your options, and that includes a home that’s newly built.

The Number of Newly Built Homes Is on the Rise

While there are more houses for sale right now than there were at this time last year, there’s still a historically low number of homes available on the market. One reason for that is years of underbuilding—meaning there haven’t been enough new homes built to keep up with demand.

The graph above shows how low the production of newly constructed homes has been over the past 14 years. But it also shows another important trend: the number of new homes being built each year is on the rise. As Mark Fleming, Chief Economist at First American, shares, that’s good news for buyers:

“While existing-home inventory remains limited, the silver lining for home buyers is that new-home inventory is on the rise, and a new home at the right price is a pretty good substitute.”

Builder Incentives Can Provide a Boost

While there a growing number of new homes for sale, builders are slowing that pace until they sell more of their current inventory. According to Logan Mohtashami, Lead Analyst at HousingWire:

“The builders have to work off the backlog of homes, but instead of 3%-4% mortgage rates, they’re dealing with 6% plus mortgage rates, which means they have to provide many incentives to make sure those homes sell.”

Many builders are now offering incentives to help buyers purchase these homes. Fleming also explains:

“The National Association of Home Builders reported that nearly two-thirds of builders were offering incentives, including mortgage rate buydowns, paying points for buyers and price reductions, which could entice potential home buyers.”

A builder who’s willing to pay to reduce your mortgage rate could be a game changer. Ksenia Potapov, Economist at First American, puts it this way:

“A one percentage-point decline in mortgage rates has the same impact on affordability as an 11 percent decline in house prices.”

Should You Buy a Brand-New Home?

The best way to decide what type of home to buy is to work with a trusted real estate professional who can help you weigh the pros and cons of each option. They know which homes are available in your local market, and which builders might be offering incentives that make sense for you.

Bottom Line

Even though there aren’t a lot of homes for sale today, new home inventory is on the rise, and many builders are offering incentives. Let’s connect so I can help you weigh the pros and cons of shopping for a new home versus an existing one.

Where Will You Go If You Sell? You Have Options.

January 30, 2023January 30, 2023 / Broker Associate, EXP Realty LLC / Leave a comment

There are plenty of good reasons you might be ready to move. No matter your motivations, before you list your current house, you need to consider where you’ll go next.

In today’s market, it makes sense to explore all your options. That includes both homes that have been lived in before as well as newly built ones. To help you decide which is right for you, let’s compare the benefits of each. Regardless of which option you choose to explore, working with a trusted real estate professional throughout the process is essential.

The Benefits of Newly Built Homes

First, let’s look at the benefits of purchasing a newly constructed home. With a brand-new house, you’ll be able to:

1. Build your dream home

If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more. Bankrate puts it like this:

“Building means customizing. . . . instead of wishing your home had a certain kind of flooring, a sunroom or some other special amenity, you’ll be able to tailor the property to your exact needs. You also won’t be limited to a specific location or neighborhood.”

2. Take advantage of builder concessions

In today’s market, a lot of home builders are working hard to sell their current inventory before they add more to their mix. That means many of them are offering concessions and are more willing to negotiate with buyers. That could work to your advantage in the process.

3. Minimize home repairs

Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little improvement projects to tackle. As realtor.com says:

“. . . if something goes wrong with your new home, not only are there likely some manufacturer warranties in place, but many builders also include additional home warranties . . .”

4. Take advantage of energy efficiency

When building a home, you can choose brand-new, energy-efficient options to help lower your utility costs, protect the environment, and reduce your carbon footprint.

The Benefits of Existing Homes

Now, let’s compare those to the perks that come with buying an existing home. With a pre-existing home, you can:

1. Explore a wider variety of home styles and floorplans

With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.

2. Appreciate that lived-in charm

The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home.

3. Join an established neighborhood

Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit. Plus, they have more developed landscaping and trees, which can give you additional privacy and curb appeal.

4. Move in faster

If you have a short timeframe to move or you just don’t want the process to take several months while your home is under construction, buying an existing home might make sense for you. U.S. News explains:

“When you’re choosing a home, existing or new, you should also consider how long it might take to move into that home. Just because you have a contract doesn’t mean that your new home will be completed (or even started) at the time you agree to the purchase. It can be a struggle waiting for the walls to go up as you wonder what your home will become.”

When thinking about where you’ll go after you sell your house, remember your options. As you start your search, think about what’s most important to you. By working with a trusted real estate agent, you can be confident you’re making the most educated, informed decision.

Bottom Line

If you have questions about the options in our area, let’s discuss what’s available and what’s right for you, so you’re ready to make your next move with confidence.

Why It May Be Time To Add Newly Built Homes to Your Search

November 15, 2022November 15, 2022 / Broker Associate, EXP Realty LLC / Leave a comment

If you put a pause on your home search because you weren’t sure where you’d go once you sold your house, it might be a good time to get back into the market. If you’re willing to work with a trusted agent to consider a newly built home, you may have even more options and incentives than you realize. That may be why the National Association of Home Builders (NAHB) says the share of buyers looking for new construction is increasing:

“According to the quarterly Housing Trends Report, the popularity of new construction homes is continuing to rebound . . .”

Here’s a few reasons more buyers may be drawn to newly built homes.

More Options To Choose from and Potential Builder Incentives

When looking for a home, you can choose between existing homes (those that are already built and previously owned) and newly constructed ones. While the inventory of existing homes has increased this year, it’s still below more typical years like 2019. Currently, according to the National Association of Realtors (NAR), there is a 3.2-month supply at the current sales pace. For reference, a roughly 6-month supply is considered a balanced market, leaving us in a sellers’ market today.

While it’s a smaller segment of the overall inventory of homes for sale, the supply of newly built homes has grown even more. The National Association of Home Builders (NAHB) explains:

“New single-family home inventory remained elevated at a 9.2 months’ supply (of varying stages of construction). A measure near a 6 months’ supply is considered balanced.”

Here’s why this matters for you. While you have more homes to choose from in either category, there’s one extra benefit of newly built homes. Because the inventory of newly built homes has grown so much, builders are motivated to sell their properties before they build more.

Back in the housing crash of 2008, builders were building too many homes, and that oversupply is part of what contributed to the housing bubble bursting. Now, builders don’t want to have a surplus of inventory in their pipeline, and many are offering buyers incentives to help move that inventory along. As Doug Duncan, Chief Economist at Fannie Mae, explains:

“. . . a continual increase in the number of completed homes available for sale is now occurring, with the inventories of such homes now at the highest level since July 2020. . . . This suggests to us that builders may be increasingly willing to offer more aggressive incentives and discounts to maintain sales of completed inventory.”

While specifics will vary by builder and market, some buyers are seeing builders reduce prices and offer incentives. To find out what’s available in your area, lean on a trusted real estate professional.

Lifestyle Benefits of Buying a Newly Built Home

In addition to more supply and the potential for builder incentives, newly built homes have various benefits that may suit your lifestyle. For example, you likely won’t have as many little repairs to tackle, like leaky faucets, shutters to paint, and other odd jobs around the house. That can free up time for you to do other things you’re passionate about.

Another perk of a new home is that nothing in the house is used. It’s brand new and uniquely yours from day one. You’ll have all new appliances, windows, roofing, and more. These things can help lower your energy costs, which can add up to significant savings over time. You may even have the latest and greatest technology features built into your new home.

Builder sums up why some buyers today are turning to newly built homes:

“For some, it’s the lure of something new and modern. For others, it’s the move-in ready experience. And now there’s another factor to consider when making this decision: technology.”

If any of these benefits appeal to you, it’s time to connect with a trusted real estate advisor to learn more.

Bottom Line

If you’re considering a newly built home, let’s connect so you have an expert guide on what’s available in our local market. Together we’ll explore your options and the benefits of an all-new home.

New Homes May Have the Incentives You’re Looking for Today

September 1, 2022September 1, 2022 / Broker Associate, EXP Realty LLC / Leave a comment

According to the U.S. Census Bureau, this year, builders are on pace to complete more than a million new homes in this country. If you’ve had trouble finding a home to buy over the past year, it may be time to work with your trusted agent to consider a new build and the incentives that come with it. Here’s why.

The Supply of Newly Built Homes Is Rising

The inventory of newly built homes, however, is also rising. And with more options available than there have been in years, a new home may be just the answer you’re looking for. The graph below shows just how much the supply of newly built homes has grown this year.

And here’s the thing – builders are also keeping a close eye on current market trends. With mortgage rates rising this year and, as a result, buyer demand softening, builders are slowing their pace of new construction. That’s because they learned their lesson in the housing crash of 2008 and want to avoid over-building and having too much inventory in their pipeline.

Basically, while there are more newly built homes on the market today than there have been in years, many builders want to sell their current inventory before adding much more – and that’s where you can really benefit. Today, builders may be more willing to work with buyers. According to a recent survey, 83% of builders have reduced their prices over the last three months.

What That Means for You

The current supply of newly built homes for sale coupled with the fact that data shows the majority of builders are doing price reductions are both great news for you. It means you may have more options and possibly some much-needed relief if you consider newly built homes in your search.

Bottom Line

If you’re ready to buy, it may be time to look for a newly built home. To learn what’s available in our area and what incentives these builders are offering, let’s connect today.

What You Need To Know if You’re Thinking About Building a Home

March 23, 2022March 23, 2022 / Broker Associate, EXP Realty LLC / Leave a comment

If you’re ready to move up, you may be trying to decide whether you want to buy a home that’s already on the market or build a new one. And since the supply of homes available for sale today is low, you’re willing to consider either avenue. While home builders are doing everything they can to construct more houses and help narrow the supply shortage, they’re also facing delays due to factors outside of their control.

Here’s the latest on some of the key challenges homebuilders are experiencing today and how they could impact your plans to move up. When you know what’s happening in the industry, you can make an informed decision on whether to look for a newly built or an existing home in your home search.

Supply Chain Issues

The first hurdle builders are dealing with is the lack of supply of various building materials. According to a recent article from HousingWire:

“. . . Nearly everything needed in the homebuilding process is facing some sort of delay and subsequent price increase.”

The supply issue isn’t just with lumber, even though that’s what’s covered most in the news. The article explains many other supplies are impacted too, including roofing materials, windows, garage doors, siding, and gypsum (which is used in drywall).

The difficulty in getting these items is dragging out timelines for new homes as builders wait on what they need to finish construction. And since materials are in short supply, even when they do get the product, the principle of supply and demand is driving prices up for those goods. HousingWire explains it like this:

“When supplies are low, charges inevitably go up, . . . Meanwhile, a lack of availability is causing huge delays, meaning builders are struggling to stay on schedule.”

The National Association of Home Builders (NAHB) agrees:

“Builders are grappling with supply-chain issues that are extending construction times and increasing costs.”

Skilled Labor Shortage

But that’s not the only challenge with new home construction today. Builders are also having a hard time finding skilled labor, which means they’re short-handed, further dragging out their timelines. Odeta Kushi, Deputy Chief Economist at First American, says this is an ongoing challenge for the industry:

“The skilled labor shortage in the construction industry is not new – it’s been an issue for more than a decade now.”

But there is good news. The February jobs report shows employment gains in the construction industry. Kushi puts this encouraging news into perspective in the article mentioned above:

“Overall this was a good report, . . . The supply of workers continues to fall short of demand, but the underlying momentum of the labor market recovery is strong, and falling COVID case counts provide further forward momentum.”

That means, while finding workers continues to be a challenge for builders, there are signs of positive momentum moving forward.

How This Impacts You

HousingWire explains how these things can impact move-up buyers today:

“The residential construction industry is facing a crisis as builders manage the critical shortage of building materials and labor. Explosive supply and labor costs are forcing long delays. . . .”

So, when you weigh your options and try to decide between building a home or buying an existing one, factor the potential delay in new home construction into your decision. While it doesn’t mean you should cross newly built homes off your list, it does mean you should consider your timeline and if you’re willing to wait while your home is being constructed.

Bottom Line

When planning your next move, understanding the latest market conditions is key to making the best decision possible. To make sure you have all the information you need, let’s connect. Together we can make sure you know what’s happening in our local market so you can confidently decide what’s right for you, your priorities, and your timeline.

Struggling To Find a Home To Buy? New Construction May Be an Option.

December 8, 2021December 8, 2021 / Broker Associate, EXP Realty LLC / Leave a comment

There’s no question that the financial benefits of selling a house are outstanding today. Now is truly a great time to list if you’re ready to make a change. But if you do sell your house right now, you may be wondering where you’ll go when you move.

With so few homes available to buy right now, you might be considering building a new home as one of your options. But you may be unsure if that’s the way to go. Let’s compare the benefits of a newly built home versus moving into an existing one, and why working with a real estate agent throughout the process is mission-critical to your success no matter what you decide.

The Pros of Newly Built Homes

First, let’s look at the benefits of purchasing a newly constructed home. With a brand-new home, you’ll be able to:

1. Create your perfect home.

If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more.

2. Cash-in on energy efficiency.

When building a home, you can choose energy-efficient options to help lower your utility costs, protect the environment, and reduce your carbon footprint.

3. Minimize the need for repairs.

Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little projects to tackle. QuickenLoans puts it like this:

“Buying a new construction vs. existing home typically means you’ll have fewer repairs to do. It can be a huge relief to know that it’s unlikely you’ll have to repair the roof or replace the furnace.”

4. Have brand new everything.

Another perk of a new home is that nothing in the house is used. It’s all brand new and uniquely yours from day one.

The Pros of Existing Homes

Now, let’s compare that to the perks that come with buying an existing home. With a pre-existing home, you can:

1. Explore a wider variety of home styles and floorplans.

With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.

2. Join an established neighborhood.

Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit.

3. Enjoy mature trees and landscaping.

Established neighborhoods also have more developed landscaping and trees, which can give you additional privacy and curb appeal. As Investopedia says, if you buy an existing home:

“Odds are, too, that the home will have mature landscaping, so you won’t have to worry about starting a lawn, planting shrubs, and waiting for trees to grow.”

4. Appreciate that lived-in charm.

The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home. According to Houseopedia:

“Charm is priceless. Existing homes, especially those built in the 1950’s or before, often offer architectural elements, historic charm and a quality of craftsmanship not available in new homes.”

The choice is yours. When you start your search for the perfect home, remember that you can go either route – you just need to decide which features and benefits are most important to you. Working with the guidance of your trusted real estate advisor will help you make the most informed and educated decision, so you can move into the home of your dreams.

Bottom Line

If you have questions about the options in your area, let’s discuss what’s available and what’s right for you, so you’re ready to make your next move with confidence.

Looking To Move? It Could Be Time To Build Your Dream Home.

October 20, 2021October 20, 2021 / Broker Associate, EXP Realty LLC / Leave a comment

While today’s supply of homes for sale is still low, the number of newly built homes is increasing. If you’re ready to sell but have held off because you weren’t sure you’d be able to find a home to move into, newly built homes and those under construction can provide the options you’ve been waiting for.

The latest Census data shows the inventory of new homes is increasing this year (see graph below):With more new homes coming to the market, this means you’ll have more options to choose from if you’re ready to buy. Of course, if you do consider a newly built home, you’ll want to keep timing in mind. The supply shown in the graph above includes homes at various stages of the construction process – some are near completion while others may be months away.

According to Robert Dietz, Chief Economist and Senior VP for Economics and Housing Policy for the National Association of Home Builders (NAHB):

“28% of new home inventory consists of homes that have not started construction, compared to 21% a year ago.”

Buying a home near completion is great if you’re ready to move. Alternatively, a home that has yet to break ground might benefit you if you’re ready to sell and you aren’t on a strict timeline. You’ll have an even greater opportunity to design your future home to suit your needs. No matter what, your trusted real estate advisor can help you find a home that works for you.

Bottom Line

If you want to take advantage of today’s sellers’ market, but you’re not sure if you’ll be able to find a home to move into, consider a newly built home. Let’s connect today so you have a trusted real estate advisor to guide you through the sale of your house and discuss your homebuying options.