Are you planning a move in the near future? Maybe you dream about building a brand new house. If so, now is the time to move forward. With interest rates on the rise since the election it’s a good time to jump in and take advantage of what are still historically low rates and prices that (according to the Realtor.com 2017 Housing Forecast) are expected to continue to increase this year making for yet another reason to call your agent today about buying your next home.
The 2017 Housing Forecast also has good news for the new construction market, projecting a 10 percent increase in sales and a 3 percent increase in new home starts. These figures are lower than last year’s but still significant. Part of what made 2016 a good year for real estate, and especially new construction, was lots of active buyers and a concurrent low inventory of resale homes, trends that are expected to continue into 2017.
Charlottesville’s market, bolstered by UVA and a growing tech sector, continues to be strong and local agents appreciate the role of new construction in increasing housing inventories that have been frustratingly low throughout the area. Buyers shopping for a new home will have many opportunities to find the perfect house and community 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.
Charlottesville’s Hot New Homes Market
The new homes market is very active and buyers have much to choose from all over town, including the area’s first EarthCraft certified multi-family development, the River House Condos at Riverside Village.
Michael Guthrie, CEO and Managing Broker for Roy Wheeler Realty Co. called 2016 and 2017 “the years of new construction” stating that “the market has picked up significantly.” This is due in part to a number of new communities that have been approved and where the ground is cleared and new homes going up. He gave credit to UVA for bringing in new buyers, but also described our area as one that has “become very much a market for start-ups,” some of which have grown from very small ventures to companies with 30 to 40 or even 100 to 200 employees.
“The new construction market is still excelling,” said Susan Stewart with Roy Wheeler Realty Co., adding that “one of the reasons for that is the resale market inventory is low right now. There are just not a lot of homes for the buyers to pick from and often they require work with renovating and updating in order to make them right.”
The result has been more and more buyers seeking out new construction as an alternative. Of course it helps that, Stewart said, “new construction prices are about in line with resales.” On a recent weekend she talked to a number of couples who dropped into a model home where she was working and told her they were there in part because they hadn’t found what they wanted in the limited number of resale homes available in their price ranges.
The downside to the demand for new homes is the builders are having difficulty keeping up. “there are not enough new homes built to satisfy the market,” Stewart said. This means spec homes are being “snatched up quickly,” while other buyers are looking for rental situations where they can stay comfortably during the eight to twelve months it takes to have their new home built.
Greg Slater with Nest Realty Group described the new homes market as “strong,” although he has noticed that the new homes share of the market as a percentage of total sales has declined recently. He said this is due in part to a growth in home sales in the under $400,000 segment of the market that builders can’t serve. Another reason for a decreasing market share for new homes is that builders are so busy at the moment that it is taking longer for homes to be built, reducing the number they can complete in a year.
“The new construction market is hot,” said Jodi Mills with Roy Wheeler Realty Co. She described the market as one with lots of competition, the most she’s seen since 2010. “It’s an exciting market with lots of niches,” she added.
Why Buyers Love New Homes
There are many reasons why buyers appreciate a new home ranging from being able to customize it to suit their lifestyle to recognizing the long term importance of the newest energy efficiency technology that may not be possible in resales without significant renovation and upgrades.
“Contemporary design and energy plus features are always in high demand,” Stewart said. Many also look for “open floor plans and more private lots.” In her experience the move-up buyers or downsizers—what she calls “seasoned” buyers—she works with are interested in customizing with features such as a first floor master suite, granite countertops and hardwood floors. On the other hand, first-time buyers are more concerned about getting “the best bang for their buck.”
A good example is a single woman—a client of Maggie Gunnells with the Crossroads office of Better Homes and Gardens Real Estate III—who recently bought her first house. While she wanted to live in town, the $350,000 she had to spend was not sufficient to purchase a house she liked that was move-in ready. Instead she bought a new home in Spring Creek at Zion Crossroads where she is enjoying the security of a gated community and working out in the gym that is available to residents there.
“Warranties are another thing buyers are looking at,” Stewart said. “They want that extra protection and a sense of knowing that everything is covered for years to come. Peace of mind is everything these days!”
Unlike in the past, many of today’s seasoned buyers want a home that fits their current lifestyle rather than
just moving up to a bigger house Slater said. While they may find a resale home that suits them, many choose to go the new construction route after seeing homes that are dated with obsolete floor plans. The more liveable floor plans, for example homes on one level or with a first floor master suite, offer buyers additional value that they can enjoy during the time that they live there.
Most buyers also have their eye on utility costs with a desire to save money and be more green in their choices. Rob Johnson with Green Mountain Construction says people are recognizing they don’t have to keep building bigger homes when they are ready for something new. Instead many are interested in the use of sustainable materials, and making decisions that will result in long term payback, such as choosing additional insulation, especially when they plan to stay for awhile.
Another part of planning for the long term in a home is choosing universal design features. Usually this means one-level homes that have been customized to meet the buyers’ age and health related needs allowing them to stay independent for as long as possible. Some are also living on strict budgets and appreciate the cost savings associated with newer more energy efficient homes as well as the lower property taxes available in rural counties such as Louisa.
For example, in the popular gated community of Spring Creek in Louisa County, about 60 percent of the buyers are active retirees or pre-retirees explained Dan Girouard with Spring Creek Realty. It is not unusual for downsizers to relocate to Spring Creek from larger homes in nearby neighborhoods, he continued stating that they like the idea of a smaller house that requires less maintenance, but want to continue to enjoy an amenity-rich lifestyle that includes a gated entry, a golf course, walking trails and tennis courts plus the new clubhouse and restaurant. The builders are well aware of these requirements and have become proficient at offering the customization these buyers require, he explained.
Sometimes customization can involve something as simple as using the latest paint colors or other decorative elements, which, though available to resale buyers, are nice to have in place from day one. For example, “We’ve had a fair amount of customers ask for grey or tan painted trim and doors rather than the white that you typically see,” said T.J. Southmayd with Nest Realty Group who represents Craig Builders.
Another current trend that new homes agents are seeing is the return of brass fixtures. Mills explained that a toned down brassy color is making its appearance in places like drawer pulls or light fixtures. She is also enthusiastic about some popular new siding colors, such as some beautiful grays, that were not previously available. “The new colors are exciting,” she said as “we have been dealing with the same colors for years.” She added that people like them and they are very popular.
Other popular features in today’s new homes include screened porches and outdoor living spaces such as fancy patios and rooftop decks.
New Home Communities
New home communities often offer amenities to residents such as golf, tennis, work-out facilities, walking trails and well-maintained parks and common areas. Some like Old Trail and Belvedere are mixed-use developments that combine homes, townhomes, or apartments with commercial properties such as salons, health care professionals, dry cleaners, coffee shops and restaurants that are easily accessible to residents. They may also offer club houses with opportunities for social events and gatherings.
Some communities feature options for a wide spectrum of ages and needs such as Old Trail where The Lodge provides independent and assisted living facilities at a central location and residents can participate in the lifestyle of the larger community joining friends or family for a walk, a game of golf, or an evening out at a local restaurant. All of these amenities and more are just a short walk from The Lodge.
Similarly the Senior Center with its focus on holistic wellness is in process of raising funds to relocate to a much expanded facility at the walkable community of Belvedere where it will offer resources for seniors and guests and expects to be an integral part of the life of the community there.
Whether their interests include golf, tennis, pickle ball, or bridge, buyers can enjoy them in many neighborhoods along with pros and lessons should they want to improve their skills. Club houses with work- out facilities and social activities are also popular and available in some communities and buyers who are tired of yard work and want maintenance-free options for their next home will find those as well.
If building a new home is in your future, talk to your agent about where to find the homes and amenities that best suit your needs. Then relax and look forward to moving into a house that is customized just for you.
Celeste Smucker is a writer and blogger who lives near Charlottesville.