Thursday, December 20, 2012

Should I Build a New House? Is now the time to build?

New Home Construction
People ask all the time, "Why would I pay full price to a builder when I can get a deal on an older home?"  My answer is, "you get what you pay for."  And now is the time to build!

Consider this...if your home was built prior to 1992, the internet was not yet available on a public scale.  Think about the energy codes that have been improved since then.  The technology involved in building a house today vs decades ago.

Determine up front if you are the fix it type and whether or not you have the time to work on a house when you aren't working for a living.  Do you want a warranty with your home or are you okay purchasing it "as is"? 

Recent years have provided many of the home builders with lots priced at a discount.  Much of that discounted inventory has been consumed.  In many areas builders are scrambling to lock up lots that they can build on in the coming years.  For the first time in areas we are seeing developers adding more lots to neighborhoods that haven't needed additional lots for years. 

Developing lots was one of the first things to stop when the market crashed.  Getting financing for dirt has been tough and without capital, developing lots is almost impossible.  As demand picks up on lots that remain prices increase.  Costs to develop lots today outweigh the costs of purchasing them from the banks a few years ago.  When the dirt prices go up you can count on the house prices going up.

Digging New Lots at Twin Bridges in Spokane Valley
Prices have remained flat for several years and builders have been unable to raise prices when costs go up.  Count on 2013 being the year where you see those prices going up.  They can't absorb costs forever and continue to turn a profit.  Storms like hurricane sandy and other elements have increased demand for building products all over the country. 

So my answer is Yes.  If you are looking at buying a home...consider building new.  Prices are at all time lows and cannot stay there forever.  Interest rates are low and money is cheap.  Build a new home and include the things that are important to you.

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