Build a New Home Versus Buy a Used Home
With home prices skyrocketing and new builds being a major focus in Utah, I've been asked if I feel that it would be easier just to build a new home rather than try and compete for an already established home? The answer is that you're going to be competing either way.
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I think buying a home is going to come with problems no matter what. So the first step is to talk about the general pros and cons of each and then we can dive into which would be easier in this current market. Then you should have enough information to decide if that is the direction you would want to take.
You are getting exactly what the title of this section is, a Used home. So the home's condition is very much based on the previous owners. Did they do any updating. Did they maintain it? Usually as you are touring, you can easily see those things. The good news is if they didn't take care of the home, it is typically reflected in the price.
Any new issues that where caught as the home was being built, have been noticed and most likely fixed
Home completely finished
Already has window coverings
You can move in when the seller moves out
Aged Guts (plumbing, hvac, electical)
More difficult to make it feel like yours
Any aged defects (water, plants, etc.)
New homes are great! When you move in everything has the new home smell. Also there shouldn't be any issues with them (Wrong!) Homes are made by people and people make mistakes. So potentially you'll need to work out the odds and ends of the house but those typically are cheap and easy. Here are the pros and cons of a new home
It's brand new!
New HVAC, Roof, Appliances, Etc.
Work through new house issues
Put in a yard
Have to wait for it to be built
Those are the general pros and cons of the actual house. Now lets dive into which makes more sense for you. With Utah experiencing the increase in demand for houses, I'm hearing more and more from buyers about just buying new rather than "competing" for already built homes. The thing is new homes are a competitive market as well.
We are seeing a great increase in the home building market here in Utah because there is an excessive demand. There are two main ways that you can build a home. First you can go through a home building company that takes the risk from building off of your hands and builds a home for you. Second is to pair up with a contractor and find some land that you can then have them help you build a home on. (Most of the time those contractors will not carry the construction loan, though some do). So you have to weigh the risks of each and how much work you want to put in.
Here's is what we're seeing on the construction side. Those big home builders are mostly shifting their focus onto spec homes because of the volatility in the costs for construction supplies and high increase in home prices. So you'll typically be competing against other people since it will be an already built home. If you hire a contractor, you need to fully understand that the cost to build your home will most likely go up and that you need a buffer to make sure you can complete it. Also land is competitive to try and secure, so be ready to have to compete for those already subdivided lots just like you would a home.
So is building a home a way to avoid the intensity of the Real Estate Market? No, not really. You could get lucky and find a lot that doesn't have multiple offers or isn't asking too much, but just know that most likely you're going to have to compete in the new home market just like you are going to have to in the already built home market.
The choice then comes down to where you are comfortable with your risk level and what you prefer in a home (with the pros and cons stated above). Which would you choose?
Thanks again for reading. I specialize in helping first time home sellers. If you want a step-by-step guide in selling your home click here. If you want to find more articles to learn about his market and maintenance on your home, click here.