Over a decade after the housing crash in 2008, the economy is finally recovering, but some sectors are recovering faster than others. People still need houses, but renting, leasing, and remodeling still remain far popular than construction of new properties. New property construction has been notoriously slow to recover, tanking more than 80 percentage points in the 2008 crash and eleven years later still sitting at less than half of its pre-crash level. Despite sounding like grim news, this kind of economic outlook can be good news for prospective buyers with some spare cash to invest in a higher-quality, more bespoke real estate opportunity. Low demand for new construction brings prices down and creates a buyer’s market. This is true in much of the real estate sector, but there are many advantages to ordering a new construction rather than buying an existing house.
There are still many so-called cookie-cutter homes on the market, especially in the suburbs, and some types, especially the higher-end ‘McMansions,’ are especially reviled. Because of the economic incentives driving construction of these suburban homes, construction quality is characteristically shabby, and both interior and exterior designs can become dated very quickly, leading to disappointing resale value or a second investment in remodeling in order to drive up the value of the house, which can potentially lead to headache-inducing struggles with local homeowners’ associations.
The easiest way to avoid issues such as this is simply to build a new property, allowing the buyer much more control over the design and construction quality of the finished product. However, when ordering construction of a new home, buyers must be more proactive and vigilant than when simply purchasing or mortgaging an existing home, and cutting too many corners or failing to consult an expert – or even a magazine – on trends in home design can lead to the same issues discussed above.
When deciding on the layout or type of home for a new property, there are several options, some good, and some bad. Split level home designs were once very popular and since then have significantly declined in popularity and desirability, but it’s likely that these types of homes will make a comeback as they allow for increased house volume with a smaller footprint, meaning you can fit more house into a smaller building lot. This will certainly be attractive to those looking to avoid breaking the bank while maintaining investment in an appreciating asset, and if housing prices continue to outpace wages, there should be no problem finding a buyer for the property in the future for the same reasons.
Once a plan has been decided on and construction has begun, the homeowner’s job has still only begun. Some even argue that the most important step occurs before construction has even begun. That’s the time when the buyer should be doing research on construction companies and crews, building relationships with potential contractors, and finding out what needs to be done and how for the design that they want. Two of the most important points stressed by experts in this field are getting to know the contractors and establishing expectations or guidelines for walkabouts or even inspections during the construction process. An experienced and reputable construction crew will have no issues with their client coming in to take a look at their work, and if they are skilled, they will likely take pride in showing off their work and explaining what they’re doing, as it can help to bolster their reputation through word of mouth and strong relationships with their clients. On the other hand, a crew that’s reluctant to provide transparency during the construction phase should be a red flag for the buyer. It’s also okay and even recommended to involve an inspector, as they can provide a keener and more experienced eye than the homeowner. That being said, it’s not a good idea to be overbearing. Construction is a difficult and demanding job, and occasionally dangerous for inexperienced observers wandering onto the building site. That’s why communication is key; the buyer should agree beforehand with the builder about how often and at what times or stages of construction it’s appropriate for them to visit.
Buyers of newly constructed homes generally have positive experiences. There is always the potential that things might go wrong, but the benefits greatly outweigh the risks. The most pressing complaints about life in these new homes is generally something like having to re-paint a few walls, or regretting putting in hardwood floors. But in spite of the possibility for missteps, there has never been a better time to build a new house. It may require a more proactive approach and significantly more involvement in the process than simply walking into a house and saying “I’ll take it,” but as with all things in life, the hard work pays off.