By Celeste M. Smucker –
One of 2017’s biggest real estate stories was the emergence of a fast-growing new construction market, which continues to keep builders very busy, in many cases, well into this year. Historically low interest rates and an upward trending stock market motivated buyers to jump into the market, seriously depleting inventories of existing homes and encouraging many to consider new construction for the first time.
More of the same is on the way this year according to the Realtor.com® 2018 National Housing Forecast that predicts a 7 percent increase in new home sales and a 3 percent growth in home starts. Home sales are expected to be even more robust in southern states thanks to “healthy building levels combating the housing shortage.”
In our area, agents are enthusiastic about the prospect of another profitable year of new home sales. Thanks to quality of life variables like our gorgeous scenery that regularly attract buyers, we can also count on the market stability that comes from UVA and our expanding tech sector all of which bring high-income newcomers still actively working as well as those ready to retire.
Fortunately these buyers will have a variety of new home options to choose from as more neighborhoods come on line and builders work to meet the growing demand for such popular options as one-level living and energy efficient design.
Customized and Carefree Design
New homes are a hot commodity for many reasons, a big one being that buyers can customize the design to suit their current lifestyle. Some are looking for a change because they are entering retirement, while others have outgrown their starter homes and want something bigger to accommodate a growing family. A smaller, easier-to-maintain and energy efficient home appeals to many of these buyers due to lifestyles that don’t leave time for house cleaning or yard work. Still others want an open floor plan that works well for entertaining or large family gatherings.
Whatever the reason, a popular way to describe this trend is “right sizing,” and it can be about buyers at any stage of life who see the value of designing a home to fit their unique situation, explained Greg Slater, Associate Broker with Nest Realty Group.
While these buyers may find a resale home that suits them, many choose to go the new construction route after seeing homes with obsolete floor plans, he continued. In today’s world, livable floor plans often include homes on one level—or at least those with a first floor master suite—that make life easier now while also facilitating aging in place. Many new homes are also characterized by open floor plans that adapt well to a variety of different kinds of lifestyle needs.
Michelle Pike with Roy Wheeler Realty Co. helps many clients who want to age comfortably in place and appreciate features such as wider doors (to permit passage via wheelchair or walker), no-step entries and single-level living. Her clients also demand other features that make life easier such as walk-in showers that are much larger than the familiar rectangular stalls.
While these kinds of amenities accommodate aging in place, they also make it possible for home owners to stay put without major renovation expense if they are unexpectedly disabled. And down the line, selling the home will be easier because it appeals to so many different kinds of buyers.
Many new home buyers also love the advantages of smart technology, explained Sasha Farmer, Vice President of Montague Miller and Co. Realtors, Inc. With the right systems in place, home owners can monitor their house whether they are just out for the evening or on the other side of the world. Did they really turn off the stove? Are the doors and windows locked and security system turned on? Is the next door neighbor remembering to water the plants? Are the teenagers having an unexpected party?
Along with innovative smart technology a multitude of other options are now available for folks who want to free up time for pursuits such as working a demanding job, or enjoying volunteer, recreational or social activities. These amenities could include anything from maintenance-free decking to quartz countertops to hardiplank siding and smaller yards. Of course, with a new home, buyers can choose the ones that fit their budgets and make the most sense for their lifestyles.
One popular low maintenance option is a resilient, commercial-grade laminate flooring, explained Andrea Akers, Sales Administrator with Southern Development Homes, that is very easy to maintain. This flooring can be more expensive than hardwood, but “it lasts forever,” she said and, the other good news is, it is impervious to damage from pets, high heels and other sharp objects.
Still another appealing and carefree feature of new homes is the warranties, said Susan Stewart with the Zion Crossroads office of Roy Wheeler Realty Co., whose new home buyers sleep better knowing that everything is covered for years to come. “Peace of mind is everything these days,” she emphasized.
Energy Savings
Utility bills can be steep and who wouldn’t want to save on this major household expense? Commitment to a green lifestyle and concern about energy savings often send buyers into the new construction arena as these homes can be significantly more energy efficient than their resale cousins saving homeowners hundreds of dollars a year. “Energy efficiency continues to be key to the new home buyer,” Slater said.
Rob Johnson with Green Mountain Construction agrees stating that in today’s market savvy new home buyers understand the value of the long term payback associated with energy saving features such as additional insulation, especially when they plan to stay for awhile.
Interest in green and energy savings is also evident in the increased use of solar panels in new homes. Akers’ company has responded to this interest by partnering with Sigora Solar, a local solar energy provider. The cost of the panels can be included in the buyers’ mortgage, or not, she added.
High performance HVAC systems are also popular, Pike said, as are low-e windows that, according to energy.gov, will help pay for themselves over time by saving homeowners on the cost of heating and cooling their homes.
New Homes Market Continues to Impress
Given all the reasons for the popularity of new homes, it is not surprising that the market is expected to continue its impressive run. The third quarter Nest Realty Market Report observes that year-over-year contract activity was up 10 percent indicating a “strong end to 2017,” and that “new construction continues to be a driving force in our market.” The Report continues adding that there was a 49 percent year-over-year increase in contracts on attached homes of which “31 percent…were new construction properties.” This kind of momentum plus the continued inventory shortage of resale homes also bodes well for new construction in 2018
The years of 2016 and 2017 were “the years of new construction,” said Michael Guthrie, CEO and Managing Broker for Roy Wheeler Realty Co., who added that new homes have been “an increasing percentage of total home sales the last two years,” and he expects this trend to continue.
One important reason for this phenomenon is the number of new communities that have been approved, the ground cleared and new homes being built. In addition, Guthrie explained, not only does UVA bring in new buyers but our area has “become very much a market for start-ups.” He referenced some of these formerly fledgling companies that have grown from very small ventures to ones that now employ 30 to 40 or even 100 to 200 employees, all of whom are good buyer prospects who appreciate homes that take advantage of new technologies.
We are experiencing “a robust year for new homes,” explained Jim Faulconer, Broker with McLean Faulconer Inc. While most of the action is within two miles of Charlottesville, he is also excited about activity further out that he described as “a glimmer of hope.” In his estimation jobs are the main driver of this action, however he noted that new homes also appeal to second home buyers and retirees.
New home buyers value the fact that “everything works,” when they move in, Faulconer continued referencing some current clients who chose new in part to be “free of worry.”
“Market conditions are helping new homes sales,” Slater said citing statistics that show year-over-year resale contracts up just one percent while, in contrast, new homes sales were up 23 percent. “When existing homes aren’t available, buyers have to consider their new construction options,” he explained, cautioning that “buyers have to be educated to the process and the differences between buying new vs. resale. Having a REALTOR® offer advice in this regard can be very helpful,” he said adding that the belief that buyers don’t need agents to buy new construction is “a misconception.”
Market conditions have helped accelerate the boom in new construction in another way: “The biggest change we’ve seen recently is the ability for our customers to sell their existing homes,” said TJ Southmayd with Nest Realty Group and Customer Representative for Craig Builders. “This peace of mind allows them to move into a home and/or location that better suits their needs—whether that’s a little bit larger, or smaller, depending on the buyer.”
Jodi Mills with Nest Realty Group stated that she has been “swamped” lately, especially with the opening of the new Riverside Village Condominiums in Charlottesville, the first EarthCraft certified multi-family project in Virginia. She is especially proud of the solar canopy over the covered parking that she says “is a real conversation piece and looks like a work of art,” while it also helps offset the cost of power for common areas keeping HOA fees lower.
Customized Interiors
New homes open the door to customization of everything from paint colors to extra tile to adding the perception of increased square footage by including outdoor living spaces.
“Shiplap is number one these days,” Mills said. This trend that uses horizontal boards is the “hottest thing right now.” Another hot commodity is rooftop terraces that are popular in recent townhome construction, as are open tread stairs that “let in more light,” and are especially in demand among buyers choosing three-story townhomes and some condos.
Kitchen design is an important consideration these days, Guthrie said, stating that more and more this room is the focus for much of a home’s social activity.
“Light and bright colors are popular as are white kitchens and granite countertops,” Faulconer added. Buyers are also asking for a more contemporary look that includes “higher ceilings, open floor plans and lots of glass.” He indicated that this is a change from previous years (when more traditional floor plans were popular) and, of course, helps drive the interest in new homes.
If building a new home intrigues you, talk to your agent about where to find the amenities that best suit your needs. Then relax and enjoy the excitement of customizing it to fit your family’s lifestyle.
Celeste Smucker is a writer and blogger who lives near Charlottesville.