I don’t think it’s a secret that new homes and/or new construction prices have continued to increase and jumped dramatically since the Covid-19 pandemic. There are many contributing factors to this including supply chain issues, labor shortage, huge demand, and limited suppliers in today’s crazy market.
One question that many homeowners or potential home owners ask is, when will the prices go down? Many people often say they will hold off on the purchase of a home or property, “until it becomes more affordable”. The NAHB (National Association of Home Builders) did a survey of single family home builders, and 96% of them believe that building material prices will continue to be an issue in 2022.
Not only is price the issue with materials but availability/delivery time is also a critical piece that is constantly fluctuating. Many items that used to only take a few days or a week are taking weeks, and even months to get to the job site. This is wreaking havoc on new construction home timelines. 90% of single family home builders believe this is going to be a continuing problem in 2022!
Although there are many seemingly “downsides” / negatives to building a home, or buying a new construction home; there are also some great benefits. Most homes once completed are appreciating for more than what they were contracted or “purchased” for. Many homeowners are walking into significant equity in their home once completed.
Early bird gets the worm is a great analogy for this. Many homeowners that lock in pricing, or have acted fast/early are receiving the biggest benefit to the constantly rising construction market. Every single one of our Center City community values has increased by 20%+ in the past year. Appreciation like this used to take 5-6 years to obtain, and now it’s happening in a single year!
It definitely helps to know the builder, area, and going prices for homes where you are looking! Making an educated decision for you and your family’s new home is still very important. There are many times in today’s market where homeowners are overpaying significantly for a pre-owned home and run into appraisal issues. This issue is not very common with new construction homes, but is a very common and critical issue when purchasing a pre-existing home. Oftentimes the appraisal can completely derail the deal and leave both parties upset, defeated and back to square one.
This turns many families towards new construction along with the idea of having a new home with warranties, brand new appliances, fixtures, and materials. Often the communities that these homes are in also often have amazing amenities and offer cool attractions and events for the community members to enjoy.
If you are considering or looking to build, buy or develop a new home / project, please feel free to reach out! We would love to connect with you and see how we can serve you in meeting your goals.
– Michael Guzik