If you’ve been thinking about buying a home – especially if you’re a prospective first-time homeowner – you’ve undoubtedly come across these two discouraging words: inventory shortage. Across the country, many markets have a severely limited number of homes available for sale.
The situation can look bleak. In the recent words of one housing market expert, “Almost every sector of housing continues to suffer from the impact of barely any inventory.”
Why is this happening? There are several factors at play. One is that, in many markets that were hard-hit by the housing crash, owners are still waiting for their home values to recover enough so that they won’t lose money if they sell. At the other end of the spectrum, in more robustly recovering markets the owners are holding onto their homes as they wait for their rapidly rising home values to peak. In between those extremes are markets where there simply aren’t enough existing homes to meet the demand.
The result is an increasingly complex and high-pressure “buying game” where desirable houses immediately draw multiple bids when they hit the market – bids that are often significantly over the asking price. It’s simple math: more people competing for fewer homes. Diligent buyers can still find the home they dream of, but it takes a lot of work and sometimes a lot of luck.
But here’s an opportunity that today’s homebuyers too often overlook: new-construction homes.
The housing crash decimated the ranks of home builders, but the strong and savvy ones have survived and are back in business in a big way. It’s a logical response to the problem: If not enough homeowners are selling their homes, build more homes. Of course, it’s not always that simple in every market. But working with a builder can be the ideal solution for many people looking for a home.
It could be urban infill – you’d be surprised how many new homes are being built within existing city neighborhoods. It could be a suburban development or even an exurban project. In any case, a new-construction home offers plenty of advantages over the struggle to buy an existing home.
Here are just a few reasons a new-construction home might be your best bet in today’s tight-inventory market:
- Customization – It’s highly unlikely you’ll find an existing home that doesn’t have a few things you’d like to change – maybe more than a few. With a new build you have some control over what you get – from materials, finishes and fixtures all the way to custom floor plans.
- Better construction – Today’s construction techniques and building-code requirements result in a tighter, more energy-efficient home.
- New and greener appliances – If you’re starting with a new home, no need to upgrade appliances over time – you can have modern, more efficient and intelligent appliances from the beginning.
- Less repair and maintenance – A new home will have lower needs and costs for repair and maintenance. Most builders provide warranties to protect you against any problems that crop up early on. And new materials, fixtures and appliances come with their own warranties.
- A relationship with the home’s builder – Don’t discount the value of knowing who built your home – and, in many cases, watching it being built.
If you’re in the market for a new home and see the potential advantages of working with a builder, contact an Pinnacle Capital mortgage advisor today – we can connect you with builders in your area, and help advise you during the build process on top of helping with your mortgage.