Why Not Build
The news is awful for those looking to buy a house. There is not enough supply, and there are buyers scrambling to buy what is available. I asked myself Why Not Build?
The Kansas City Star reports, “Nationwide, the country is seeing the biggest housing inventory crunch in 20 years, according to data gathered by Trulia, a real estate listing site.
“The data, distributed by The Associated Press, tracks housing inventory in the top 100 metro areas across the country.
“There are 5 percent fewer homes on the market nationwide than a year ago. In Kansas City, the figure is nearly 14 percent.
“All of the biggest metro areas in the region saw a decrease in housing inventory since 2012.
“But Kansas City had the biggest decrease — 55.4 percent fewer homes available from 2012 to 2017, according to Trulia data.
It is not just Kansas City. In Lawrence, KS you had better be prepared to move fast. That’s been the case for the last several months, and the most recent report from the Lawrence Board of Realtors shows that is still the case.
The median number of days a home sits on the market before it sells is down to 16, according to the report.
As buyers become more competitive for the relatively small numbers of homes on the market, prices have been rising. The increases were dramatic for May, the most recent month for which Lawrence data is available. According to the report, the median selling price for homes sold thus far in 2017 is $182,900. That’s up 7.6 percent from the same period a year ago.
As we said in 6 Tips for First Time Home Buyers, there are things you can do to get prepared to buy your first home or just a home, period.
If there is little in the way of supply and what is available may not appraise well for the lenders, I ask myself Why Not Build?
Why Not Build?
The initial negative is convenience, says Jean Folger at Investopedia. You can’t just move in. Not only do you have to find the land, which will very likely not be in an existing neighborhood, you also have to factor in the time to find an architect or builder, and choose every element of the new structure. You also need to worry about systems, such as whether the land gives you access to municipal water and sewage, or requires a well and septic system, along with any environmental and other permits.
But, you are much more likely to get exactly what you want. “A new home is more efficient, especially with the new energy codes including better HVAC [heating, ventilation, and cooling], insulation and air filtration standards,” says Guy Burtt, principal with Riverstone Development Group, Inc.,
Why Not Build
Another perk? A new house may be better for you. “A new home is less likely to have the health concerns or toxic materials of an older home – things such as asbestos, lead paint, mold, etc.,” says Burtt. And it can be built with certain materials making it better for the environment. “Green appliances/Energy Star rated appliances, and more efficient toilets, plumbing fixtures, and electrical fixtures allow you to build “green” for a more sustainable home in the long run. And you have the option to install, sleeve and wire for future technology upgrades, such as home automation and solar,” says Burtt.
Even though the upfront costs of building can be higher, it may be easier to recoup your investment. “You can have more significant profits with the resale of your new home. A newer home is typically more appealing than an older home to most people,” Burtt says. Also, a new home will require fewer repairs and less maintenance, which can save both money and time. And, as Burtt points out, you’ll have a warranty with a new home, so even if something does go wrong, you may still be covered.
A friend built a house when his family was young. He managed to be co-contractor. Meaning he paid the bills and he did a lot of the work like installing insulation in the walls and ceiling. In the end, he saved money and got exactly what he wanted within his budget.
Terra Firma Property Solutions, LLC is a professional, full-service real estate solutions firm.
We buy and sell properties throughout the greater Kansas City area. We specialize in buying distressed homes, then renovating and reselling them to home buyers and landlords. Terra Firma Property Solutions is excited to be part of the economic rejuvenation of Kansas City and its surrounding areas.
Call us today at (816) 866.0566
