New home construction tends to sell in the same seasonal pattern that resale homes sell….quick and fast in the spring/summer, and slow in the winter. Buyer demand tends to be low in December. People have tucked in for their winter hibernation of coffee and cookies, family time, and gift shopping. Children’s year end recitals and work holiday parties fill our schedules. Taking time to view homes, packing up the holiday decor before the season is over, and moving out of one home into another during the rainy season are often the last things on people’s minds to fit into the year end madness.
Because of this slowdown in holiday buyer activity, demand for homes drops considerably. My phone and email typically slow down in November and picks back up in February. Who would stop to think that it’s actually a good time to buy a home?! I’d argue that if the right home in the right location is available for you, it’s a GREAT time to buy.
New construction is very cyclical depending on the local market and economy, but construction usually continues year round. It’s the buyer DEMAND that slows down at year end. In December, the new home construction that started back in the summer with foundations is finishing up final details and waiting for that right buyer to swoop in and make an offer. And if builders hate anything at all, it’s standing/completed inventory without a buyer.
Just yesterday, I went with a young family who has been considering new construction nearby. We discussed two different floorplans and a couple different lots in the community. They had done a TON of homework already, but I contributed different questions for them to think about that they hadn’t considered…”are you going to be okay not having windows on this side of the home where the main part of the backyard is located?”…..”have you thought about the additional costs/maintenance to landscape a sloped lot?”…..”you’ll probably have more furry and slithery friends coming in the backyard due to backing open space…”…..”wonder if you’ll get any golf balls from that golf course on the other side of the open space?”….”Let’s ask what the distance is from the house to the bottom of that sloped hillside to see if that’s enough space for you…”
This is really what I see is one of my main purposes on new construction….helping the buyer client consider as many aspects as possible on a home that isn’t built yet. It’s difficult to imagine what a home will look and feel like when the home consists only of a perimeter foundation on a dirt lot. I want to be there to ask the questions that the developer’s agent isn’t going to push you to consider. After we talked a lot about the lots they were considering, I took these clients through an open house of standing inventory that had a similar sloped lot in the backyard to see what they thought about having a backyard with a slope. We looked at the view out the windows to get a feel for what that other home/lot would feel like. We talked about the future price of a lot they were considering waiting for which was slated to be a few releases (months) away.
In the end, this family chose to offer on an almost finished property…one they hadn’t initially considered. If this were the spring or summer, this price of this home probably would have been firm with no wiggle room. There may have been wait lists of interested buyers chomping at the bit, hoping the first position buyer would pass so they have a shot to proceed with this home/lot. But it’s December. And that’s not what happened. My buyers made a verbal offer quite a bit under list price. The seller/builder countered back approximately 15K under the initial list price. My buyers chose to counter the seller back again. In the end, they are in contract approximately 30K under the price tag of the home….which more or less equates to getting the lot/location premium of backing the open space for free. Win win.
December is a great time to be able to negotiate the price of new homes. It’s going to be a different story in three months. Today, the sales agents at developments my clients have visited over the last year are keeping my emails busy, marketing discounts and promotions. Six months ago when I visited some new homes this summer, there were wait lists and high demand.
I’d love the opportunity to help you maneuver through the possibility of buying brand new construction. Most builders allow realtors to help buyers negotiate the transaction, they just ask us to attend and register you during your first visit to the community. I want to make sure you’ve considered every aspect of a home/lot/location that we can think of….and make sure you’re well represented. Let me know if I can discuss new home construction with you!