With owning a home affordability getting better and home mortgage rates still near historic lows, the timing could be perfect for buying a new home. And in this relatively flat market or marginally up (at least inside the Washington DC beltway – Bethesda, Chevy Chase, McLean, Arlington, Falls Church – specifically) market, there are many options to consider. But before you start contemplating about the home style and number of bedrooms, here’s a real quick overview of some segments of the Maryland, Virginia Washington DC housing market.
1. “Resale” homes probably represent the biggest percentage of the market. Built years, or even decades ago, these homes were designed and built to reflect the requirements and the tastes of previous owners. They may be outfitted with outdated fixtures and technologies, and have poor construction. Buyers of these homes often fall in love with them for their character, their location or their “good-enough” fit with their needs, and accept the necessity of investing additional time and resources in remodeling and rebuilding.
2. “Spec” homes are built based on the speculation that a buyer can be found during or shortly after construction. These new homes may be designed with up-to-date floor plans and features to fit current preferences. When acquired before completion, a buyer may be able to select some finishing touches. But this type of home construction may also be designed to minimize cost and get the largest proceeds for the home builder, potentially leaving homeowners with less than the best materials and designs that are not as contemporary.
3.“Custom” homes are built according to the buyer’s specifications, usually on land they already own. While this type of new home construction embodies only ten percent of the market, it gives the homeowner the most control. Working with an “on your lot” custom home builder, the buyer determines all facets of home construction—from site selection to the home’s style, size and floor plan, types of windows and doors, flooring and siding, and all the details—cabinets, lighting fixtures, drawer pulls, paint colors, etc.
While “on your lot” home builders are sometimes thought of as large home builders, they can also accommodate today’s trend towards “right-sizing”. These days a custom home builder may work on smaller homes starting around 1500 square feet. Benefits include keeping material and labor costs to a minimum (potentially in the low $250,000 range), and customizable floor plans.
In keeping with price sensitive and “green” lifestyles, another benefit of working closely with a new custom home builder is the opportunity to incorporate the latest energy- and resource-efficient products and trends. Per the National Association of Home Builders (NAHB), “Today’s homes are built twice as energy efficient as new homes a generation ago, making them more affordable (” The latest in energy-efficient materials¹ include windows with low-emittance (low-E) glass coatings, upgraded insulation, high efficiency HVAC systems, geo-thermal HVAC systems (check this new home in Falls Church with Geo Thermal ) house wraps and tight construction.
Federal tax credits for Consumer Energy Efficiency² may also be available for new home construction, covering 30% of the cost of materials and labor for systems such as geothermal heat pumps, solar water heaters, solar panels and residential fuel cells. Note that in order to qualify, these systems must be placed in service before the end of 2016.An added bonus for those considering purchases of custom homes—”Current costs (hbrnetwork.com/building-materials/construction-costs-profits-both-down-from-peak-levels.aspx) of building a new home are relatively low,”—according to Jason Dickens, president of the Athens Area Homebuilders Association. 2009 lumber and other material prices have dropped considerably when compared to 2005. “Right now is a very good time to build a house.”
Also, if you’d like to delve into modular home design and construction or prefabricated home building techniques, let us know. We have a new home line of semi-custom homes coming out in 2011.
So, while the acquisition of an existing “resale” or “spec” home will more than likely involve trade-offs, a custom home is a good option that offers real value in function, design and satisfaction—and the fulfillment of owning the home of your dreams.