1. Price adjustments have been made. I have seen new home constructionpricing from our featured builders adjusted down to pre-2005 levels in many of our new home communities. We saw a dramatic increase during the huge three year boom here in Virginia, and new construction prices had increased because of supply & demand and the fact that building supplies and labor were up. The last couple of years has helped to bring building material levels down and builders are getting competitive pricing from their subcontractors in recent months. (This will go up as the sales continue to rise, and we're already hearing that price increases on some building supplies will happen this spring)
2. Interest rates are still low, for now.Mortgage interest rates are still phenomenal and it make sense to take advantage of the low fixed rate mortgages while you can. The slight uptick in rates are a potential sign that we may have seen the rates bottom out. Folks waiting for the interest rates to go lower may get caught waiting too long. (I'll defer to financial experts to jump in here)
3. Mortgage Interest Deduction and Tax Advantages. Home ownership is an excellent tax shelter and tax rates favor homeowners. As long as your mortgage balance is lower than the price of your home, mortgage interest is fully deductible on your tax return. Deducting the interest on your income taxes helps make the real cost of owning more attractive. Whether you buy new or existing, a home is a financial asset- you can take advantage of tax benefits.
4. Today's new homes are more energy efficient because they are better insulated, usually have better windows and more efficient HVAC systems. Energy Star rated appliances and other "green features" are being incorporated into new homes by many builders. Many existing homebuyers are paying more on utility bills and will need to spend more on energy-saving improvements to make them more comfortable and efficient. Though the price new construction may be more expensive than a resale home on the front end, a new home may need fewer repairs and/or replacements since everything is brand new.
5. Better design and better technology mean a more livable and appealing home for today's buyers. New and better ways of constructing homes are consistently being generated. Also, as consumer trends change, new construction should respond with floor plans to accommodate the changing customer needs that some existing homes do not include. If your builder is building the same home he was five years ago, it's time for a change. Some of the new home trends that are gaining popularity are drop zones off the garage entry, built-in niches for computers, cell phone charging stations, large floating kitchen islands open to the "Grand Room" (return of the old great room which is very connected to the Kitchen area), larger master showers, and flex space (a place for a media room or family entertainment room). There's less emphasis on custom trim, but more emphasis on quality Kitchen appointments and backyard gathering/entertainment and back porches. (Definitely need to have another post to list the latest trends)
6. Amenities. Many new-home communities offer resort style amenities, with acres dedicated to lakes, trails and parks. Our company has done focus groups with residents in our past communities to help determine what they value most in a new home community. In all four of our communities in Hampton Roads area, residents can jog or bike along trails meandering through the landscape, go for a dip in the neighborhood swimming pool, and take advantage of the many activities and socials at the neighborhood clubhouse. Residents can discover many memorable experiences with their families at one of the waterfront parks or enjoy social interaction with new neighbors and friends. Having the luxury of amenities in your neighborhood may also increase your resale value and attract home buyers looking for that sense of community.
7. Pride of Ownership. It is the American dream. There's no place like home, and it's a place to call your own. Long term home values will appreciate and increase* Owning a home makes economic sense for many people but it also helps instill a sense of pride. You can decorate it, landscape it, furnish it, and at the end of the day, gain a real sense of accomplishment and enjoyment from being the owner. You've worked hard, and you've earned it. so, go ahead, buy a new home, and make the place you live, the place you love.
For more information about new homes in the Hampton Roads area of Virginia, please visit www.eastwestcommunities.com. *This post is not meant to give anyone any tax or legal advice for their particular situation. Pleas consult an attorney or tax accountant if you want legal expertise and advice. This commentary is an opinion only.
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