Blessings Realty | Colorado Springs and Monument Realtor
Changing minds about Realtors
The lack of existing inventory for sale has forced many homebuyers to begin looking at new construction. When you buy a newly constructed home instead of an existing home, there are many extra steps that must take place.
To ensure a hassle-free process, here are 5 tips to keep in mind if you are considering new construction:
1. Hire an Inspector
Despite the fact that builders must comply with town and city regulations, a home inspector will have your best interests in mind! When buying new construction, you will have between 1-3 inspections, depending on your preference (the foundation inspection, the pre-drywall inspection, and a final inspection).
These inspections are important because the inspector will often notice something that the builder missed. If possible, attend the inspection so that you can ask questions about your new home and make sure the builder fixes any problems found by the inspector.
2. Maintain good communication with your builder
Starting with the pre-construction meeting (where you will go over all the details of your home with your project manager), establish a line of communication. For example, will the builder email you every Friday with progress updates? If you are an out-of-state buyer, will you receive weekly pictures of the progress via email? Can you call the builder and if so, how often? How often can you visit the site?
3. Look for builder’s incentives
The good thing about buying a new home is that you can add the countertop you need, the mudroom you want, or an extra porch off the back of your home! However, there is always a price for such additions, and they add up quickly!
Some builders offer incentives that can help reduce the amount you spend on your home. Do your homework and see what sort of incentives the builders in your area are offering.
4. Schedule extra time into the process
There are many things that can impact the progress on your home. One of these things is the weather, especially if you are building in the fall and winter. Rain can delay the pouring of a foundation as well as other necessary steps at the beginning of construction, while snow can freeze pipes and slow your timeline.
Most builders already have a one-to-two-week buffer added into their timelines, but if you are also in the process of selling your current home, you must keep that in mind! Nobody wants to be between homes for a couple of weeks.
5. Visit the site often
As we mentioned earlier, be sure to schedule time with your project manager at least once a week to see the progress on your home. It’s easy for someone who is not there all the time to notice little details that the builder may have forgotten or overlooked. Additionally, don’t forget to take pictures! You might need them later to see exactly where that pipe is or where those electrical connections are once they’re covered up with drywall!
Bottom Line
Watching your home come to life is a wonderful experience that can sometimes come with hassles. To avoid some of these headaches, keep these tips in mind!
If you are ready to put your current home on the market and find out what new construction is available in your area, let’s get together to discuss your options!
In a recent article, National Housing Inventory Crisis Reaches Inflection Point, realtor.com reported that:
1. New listings jumped 8% year-over-year nationally, the largest increase since 2013
2. Total listings in the 45 largest markets are now up 6% on average over last year
This increase in housing inventory has sparked two different reactions. Some are saying this is the first sign of a potential collapse while others are saying it is a welcomed reprieve from the lack of inventory that has stalled the market recently. As Zelman & Associates reported in a recent ‘Z Report’:
“With the rate of home price appreciation starting to decelerate alongside the uptick in inventory, we expect significant debate whether this is a bullish or bearish sign.”
Is this a sign the market might crash?
There are those who look at the increase in inventory as a sign that we are returning to the market we saw last decade. However, a closer look shows that we are nowhere near the levels of inventory we reached before the crash in 2008.
A normal market would have about 6-months inventory, but the latest Existing Home Sales Report issued by the National Association of Realtors revealed that:
“Unsold inventory is at a 4.3-month supply at the current sales pace up from 4.1 months a year ago.”
A decade ago, prices began to rapidly depreciate in June 2007. At that time, we had a 9.1-month supply (more than double what it is today) and inventory kept rising until it hit a peak of 11.1 months in April of 2008.
With the current levels of buyer demand, any such increase in months supply is highly unlikely. As Danielle Hale, realtor.com’s Chief Economist explains:
“After years of record-breaking inventory declines, September’s almost flat inventory signals a big change in the real estate market. Would-be buyers who had been waiting for a bigger selection of homes for sale may finally see more listings materialize. But don’t expect the level to jump dramatically.
Plenty of buyers in the market are scooping up homes as soon as they’re listed, which will keep national increases relatively small for the time being.”
What will be the result of the increase in inventory?
The increase in inventory will allow many families who had been unable to find a home to finally become homeowners. Again, we quote from the ‘Z Report’:
“In our view, the short-term narrative will probably be confusing, but more sustainable growth and affordability will likely be the end result.”
Bottom Line
If you are either a first-time or second-time buyer who has given up, let’s get together discuss the inventory available in our market.
