Rising prices, reduced builder competition, and fewer construction options are making it harder for buyers to secure new homes in the area. But is it still worth it?
New construction remains a major topic in Northwest Ohio, especially with recent changes in the market. There are fewer housing starts, some builders have left the area, and others have shut down completely. Despite these developments, new construction continues to be a relevant option for many buyers. Here are five key considerations when thinking about new construction in today’s market.
1. Building a custom home. Building your custom home can be an excellent choice. I have done it twice and can speak from experience. Creating a home on your lot, with your plans, and tailored to your specifications is a rewarding process. However, this is not recommended for first-time buyers. It requires a strong understanding of the process or a willingness to learn. Custom home building involves selecting your contractor and managing your design. It is very different from purchasing a pre-designed spec home.
“Custom home building is rewarding, but it is not for beginners.”
2. Buying a spec home. For those not ready for a full custom build, buying a new build home is the next best option. In most subdivisions today, the developer either builds the homes or controls who does. This limits competition between builders. In previous years, Northwest Ohio had many spec builders competing for buyers, which was beneficial. That is no longer the case. Buyers today typically receive the builder’s plans and may be able to choose some finishes or upgrades depending on the timing of their purchase and payment.
3. Consider the pricing position of builders. Another important factor is pricing. Inflation has significantly affected the cost of new construction. New homes have increased in price more than most other expenses, except for a four-year Ivy League education. Buyers should expect to pay more and spend more to have a new home built.
4. Lack of choices and new construction. The market now offers fewer options for buyers. There are fewer builders, fewer subdivisions, fewer buildable lots, and fewer contractors and subcontractors. The local home builders association is smaller than in the past, and there are fewer loan products available for new construction. This reduced competition and inventory results in limited choices and higher costs for those pursuing a new build.
5. Buying a new home can be risky. Buying new construction also carries risks. I teach a class on custom home building because I have seen buyers make serious and costly mistakes. I have helped clients who discovered major hidden defects in new homes. I have also worked with buyers who were forced to sell when a builder went out of business. These risks highlight the importance of being well-informed and getting the right help. When done properly, the reward of owning a great new home can be significant.
The real estate market continues to change. The tools and methods available today were not possible 20 or 30 years ago. My team continues to evolve as well, and we are here to help you and your family navigate real estate decisions. You can call me at 419-466-SOLD or send an email to ** ** jon@modene.com. I look forward to hearing from you.
