When Inventory Is Tight, Think New Construction

March 20, 2014

Most likely, the majority of your clients looking for a home focus on resale homes. But in today’s real estate landscape, where there’s a real shortage of inventory, it’s a good time to discuss new construction as an option with your clients.

No Compromising on Must-Haves

With fewer market listings, it can be difficult to find an existing home that matches your client’s aesthetic and needs. According to the National Association of Realtors 2013 Profile of Home Buyers and Sellers, more than half of buyers reported that finding the right home for them was the most difficult step in the homebuying process. But a new construction home lets your client choose their own features and home size, particularly if they work with a semi-custom builder.

“Our design process gives buyers as much control as they want – whether it’s a few small tweaks to a plan, or collaborating with our architects on a truly custom design,” said Brian Brunhofer, president of Deerfield-based Meritus Homes, which offers semi-custom and custom homes at The Reserve of St. Charles, and also builds custom homes on single lots throughout the Chicagoland area.

New construction communities can also offer more choices in housing type. This spring, Edward R. James Homes is breaking ground on Westgate at The Glen, a 171-unit community in Glenview, and Brighton Mews, a 29-unit community in downtown Park Ridge. “Homebuyers are hungry for housing options in these areas, so we’re pleased to be offering a variety of housing types, including cluster single family, rowhomes and townhomes,” said Jerry S. James, president of the Edward R. James Companies.

A Predictable Timeline for Moving

Some buyers may hesitate to build a new home because of the potentially longer construction schedule. But in a tight market and no idea how long it will take a buyer to find a home they like, the predictable timing of new construction may be an asset.

“Our construction process is very transparent, so buyers know exactly when their home will be ready,” Brunhofer said. “That’s particularly beneficial if buyers want to make sure they can move in time to start a new job or begin the school year in a new district.”

Also, more builders are starting to build inventory homes for quick delivery. For example, Hinsdale-based Foxford Communities has a luxury spec home under construction at the Lansdowne estate in Lake Bluff. “Once the home is built, a buyer can have input on the final touches, like preferred flooring, appliances and fixtures,” said Peter Brennan, president of Foxford Communities. “Depending on how many, if any, changes a buyer makes to the home, occupancy could take place within a few months.”

Less Competition

While low inventory is great for sellers, for buyers it can mean competing against multiple offers. One way your clients can sidestep stressful bidding wars is to purchase from a builder.

“New construction buyers won’t find themselves caught in a bidding war or wooing sellers to tip the scales in their favor,” James said. “But they should still act timely. For example, since our Westgate project is the final parcel to be developed at The Glen, home sites will likely move quickly.”

“Buyers have been sitting on the sidelines for so long that they don’t want to settle – and now that developers are building new construction again they shouldn’t have to,” Brennan added. “They may need to be a bit more flexible in their timing, but they can be confident they’ll get the home they really want.”

http://chicagoagentmagazine.com/inventory-tight-think-new-construction/#sthash.CxqWU1bZ.dpuf

by Emily Johnson