In today’s real estate market, sellers are often getting above the asking price while buyers are left to find creative ways to make offers to get a house they desire. Buyers are researching building a new construction home as a way to get what they want in a home. Rather than waiting for their multiple offers to be accepted, they are finding opportunities, but does it make sense to build right now? We offer the pros and cons.
Pros of Building a New Construction Home
The idea of picking out your own features and upgrades to semi-customized a home is appealing to some buyers. They want a move-in ready place where they can settle in with their family and not have to worry about upgrades for a period of time.
With more people working from home, new home construction means having the ability to have the latest technology without having to figure out how to make their current home work for them. In addition, they can design a space to fit their work from home and/or school from home lifestyle.
For those concerned with utility bills, especially in the heat of Gilbert and Queen Creek summers, new builds offer efficiency in HVAC systems, windows, and doors. Cutting down on utility and maintenance costs alone makes it worth it for some to consider building a new construction home.
Not only that, but you also don’t have to worry about what the previous owner did in the house because you’re the only person who has lived there! And if something does do wrong, there is a builder warranty that may cover maintenance as a result of builder error. Each builder warranty is different so be sure to understand what it means as you’re making a decision.
Cons of Building a New Construction Home
While it is appealing to select your own fixtures and upgrades, the upgrades can add up. In some cases, it may cost more than if you chose basic and upgraded later. That means a seemingly ever-increasing budget and unknown final price until you’ve made all selections.
In today’s market, for example, lumber prices are higher which is a cost that you need to consider in building a new construction home.
Delays happen and the completion date is an estimate, at best. Whether it’s caused by the availability of materials, builder issues, or something else, you can’t use your new home until it is complete. If your current home sells fast, which it is likely to do, then you have an added cost of finding a place to stay while the new build is completed.
Impact of the Sellers Market on Building a New Construction Home
In our article, Housing inventory in Gilbert and Queen Creek, we wrote about the impact this sellers market is having on builders. We know that builders are offering homes at current market value – meaning when they complete construction – and not at the traditional pre-construction market price. In a different type of market, this may be a minimal difference but not for today when building a new construction home. Builders are taking advantage of the market as much as any other seller and are not as interested in buyers as they are profit margins. As long as you understand this going into the process, you will be okay.