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New Construction; Buy now or wait?
Posted on 7/3/22 at 7:52 pm
Posted on 7/3/22 at 7:52 pm
Hoping someone in the industry can help steer a decision... Been slowly looking for a larger place for the past 4 months and have slow rolled due to uncertainty and pace market was at back in April/May.
Finally found some new construction I really like. Walked the model home today, which they claim the builder doesn't want to unload. Three more are in construction and will be done in 3-4 months is what he claimed.
The question is, best guess (as I know nothing is certain) on new construction market in a few months?
Do I:
Sit and wait until closer to finish, then offer?
Lock in the new build with risk of rates being higher at that time?
Try to convince builder to sell model home?
Its a crap shoot either way, but would hate to commit to one under construction and rates go up another point by that point and/or new construction plummet and be underwater from day 1.
Btw, this is Houston Heights area.
TIA
Finally found some new construction I really like. Walked the model home today, which they claim the builder doesn't want to unload. Three more are in construction and will be done in 3-4 months is what he claimed.
The question is, best guess (as I know nothing is certain) on new construction market in a few months?
Do I:
Sit and wait until closer to finish, then offer?
Lock in the new build with risk of rates being higher at that time?
Try to convince builder to sell model home?
Its a crap shoot either way, but would hate to commit to one under construction and rates go up another point by that point and/or new construction plummet and be underwater from day 1.
Btw, this is Houston Heights area.
TIA
5
Posted on 7/4/22 at 6:07 am to Lsut81
Rates are going up, probably faster. This is the beginning. I dont know if construction falls, the huge bottleneck is skilled labor. Then if they dont reel in inflation with rates you wont see any price drops, pain either way.
This post was edited on 7/4/22 at 6:20 am
Posted on 7/4/22 at 7:36 am to Lsut81
Building a home was a pain in the arse in normal times. It's a nightmare right now and has been for about 18 months.
Posted on 7/4/22 at 7:58 am to Billy Blanks
quote:
Building a home was a pain in the arse in normal times. It's a nightmare right now and has been for about 18 months.
For clarification, I’m not commissioning it, it’s already being built no matter what and set to be done back half of year. Question is whether new construction is a good purchase in these times? And then:
Lock in now with risk of rates going higher/prices dropping in few months when ready? (Since can’t lock in rate til 90 days before close)
Wait til closer to completion to lock in price/rate but maybe miss out?
Try to convince builder to unload the model right now to lock in rate/price?
I’ve read new home sales slowing drastically and builders worried about excess inventory.
Just looking for insight from those in the industry on the right strategy here.
Posted on 7/4/22 at 8:22 am to Lsut81
Youre fricked either way is what i was saying lol
Posted on 7/4/22 at 8:39 am to Lsut81
quote:
I’ve read new home sales slowing drastically and builders worried about excess inventory.
We underbuilt for a decade or so.
quote:
Lock in now with risk of rates going higher/prices dropping in few months when ready?
Prices won't be dropping.
I'd be concerned about rates.
Posted on 7/4/22 at 8:39 am to Strannix
How long do you plan on being in the house? I wouldn’t never try and time the market as you just can’t. If you’ll be there a while then you’re going to be fine as every long term holder of homes (or stocks) sees ups and downs.
I would buy one under construction, lock in the rate now and as soon as you close, go out and get a HELOC just to have while values are high. Even if you don’t touch it.
Fwiw I don’t know anything about that market you mention.
I would buy one under construction, lock in the rate now and as soon as you close, go out and get a HELOC just to have while values are high. Even if you don’t touch it.
Fwiw I don’t know anything about that market you mention.
Posted on 7/5/22 at 9:02 am to Lsut81
Here's my 2 pennies. Lock in new construction home now. The reason is because everything from the HVAC, roof, plumbing, to the wiring is brand spanking new. This basically gives you a 10 to 12 year cushion before any of those things rear their ugly head. And right now from Louisiana to Texas and I'm assuming other places as well, you now have the utter greed like post Katrina with these HVAC and electricians. It's is criminal how they are taking advantage of people so TLDR - buy new construction now and thank Tomato later.
Posted on 7/5/22 at 9:04 am to Billy Blanks
quote:
Prices won't be dropping.
If you don't have buyers then prices have to drop.
Posted on 7/5/22 at 10:49 am to boogiewoogie1978
To what else someone shared. Home builders across the us before 2008-2010 were building 2 million homes a year. After 2010 that number has dropped to 600k a year. They just now got back close to that 2010 level and are now backing off again. So there was a time from 2010 to 2020 where homes were grossly under built. Now you’re seeing that inventory issue
Posted on 7/5/22 at 10:50 am to Tomatocantender
quote:
buy new construction now and thank Tomato later.
Follow up. I know when buying, no reason not to have a realtor as doesn’t coast you anything. However, in going into my situation with the builder and potentially trying to get the model home, for a discount potentially, does it hurt/help to have a realtor?
Have had a realtor for a few years who’ve bought and sold with… she was initially helping me months ago as I began looking, but haven’t been in a month. Don’t know whether to engage her in negotiating or trying myself under the premise of them not paying an agent anything
Posted on 7/5/22 at 11:09 am to Lsut81
quote:
new construction I really like. Walked the model home today, which they claim the builder doesn't want to unload. Three more are in construction and will be done in 3-4 months is what he claimed
The value of the house you purchase will be heavily influenced by the price of the last finished homes from the development.
Do you think those will be increased, the same, or decreased when they are finished in 4 months?
I would guess lower. If you think the market, employment numbers, and interest rates are rosier then you should buy now.
Posted on 7/6/22 at 11:51 am to molsusports
quote:
Do you think those will be increased, the same, or decreased when they are finished in 4 months?
Definitely not increase, more than likely stay the same or within 5% of where they are now.
The variable is interest rates and not knowing when they will finish to be able to close. Can't lock in until then. So considering pushing hard on builder to sell model.
Posted on 7/6/22 at 1:39 pm to Lsut81
quote:
Have had a realtor for a few years who’ve bought and sold with… she was initially helping me months ago as I began looking, but haven’t been in a month. Don’t know whether to engage her in negotiating or trying myself under the premise of them not paying an agent anything
How cool is the sales rep? I tried that years ago on a new build and she said it didn’t matter so I tossed down my realtors name real quick. Some hard arse sales people might say that if the realtor didn’t accompany you on the initial visit then they aren’t able to pay them commission. It’s a catch 22.
I think the paid sales commission likely comes out of the neighborhood sales reps p&l or whatnot (and subsequent bonus). Doesn’t affect the housing at all.
If they do, I would negotiate it into add ons or closing costs. You don’t want them to discount the sales price of the house by the commission as to screw up the comps in the hood.
Posted on 7/7/22 at 3:26 pm to Lsut81
This is why Multifamily is booming right now
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