The Twin Cities’ bi-annual Parade of Homes Showcase enables builders across the state to showcase their latest developments. Real estate representatives and builders alike man their model homes all weekend, Thursday through Sunday, as they anticipate potential homebuyers and new construction aficionados.
As reported by the Builders Association of the Twin Cities, “The shortage of single-family homes is driving demand for new construction,” said Tom Wiener, president of Housing First Minnesota. “Builders are also trying to meet the demands of first-time homebuyers and boomers alike by creating more options through townhomes and villas.”
“We know the demand is there,” said David Siegel, executive director of Housing First Minnesota. “We believe if builders were not constrained by the labor shortage and the high cost of land and regulations they could better meet this demand.” Even amid COVID-19, the number of single-family build permits pulled in April of 2020 was up 16% in 2020 compared to 2019. The Housing First Minnesota’s Hot Sheet for May of 2020 shows that the most residential building permits have been issued in Lakeville, Rosemount, Otsego, Woodbury, and Corcoran/Plymouth.
Before heading to a model home, do your homework. We compiled a few pros, cons, and tips for you to take into consideration.
Pros:
- Less competition overall. The market’s current dilemma around low inventory often leads buyers to compete for their home due to multiple offer situations.
- Low initial maintenance costs
- Low utility bills – energy efficient
- Built to today’s construction codes (Fire safety – no potential fires sparking due to old electrical issues)
- Natural lighting – more windows than older homes
- You choose your finishes: paint colors, countertops, cabinets, flooring
- Multiple floor plans to choose from – especially various versions of today’s popular open floor plans
- Your home comes with basically a bumper to bumper warranty for two years
- Today’s homes are much more energy-efficient than homes that were built even just 10 years ago
- Most builders have multiple neighborhoods that you can choose from, allowing you to place your dream home in the location you most desire.
- Everything is new…furnace, water heater, appliances. Limited repairs for the first 10 years.
- You’re the first owner. You create the story and the memories that this home will hold.
Cons:
- Longer commute as most undeveloped land is farther from city centers
- Landscaping costs
- Often higher prices
- If you build, your home may not be ready for 6 to 9 months or longer.
- The builder knows exactly what the home cost to build so negotiating on price is rare. When touring the parade’s model homes, remember that most of the bells and whistles shown are likely not included in the base pricing.
- New construction can be costlier in the short run as you are purchasing new appliances upfront vs replacing those of an older home over time.
- Generally, you will need to stay in your home at least a few years so that you are not competing with new construction at the time of resale. Who will buy used when they can buy new?
- Window treatments are rarely figured into the price of a new home.
- There are a lot of decisions to be made: colors, carpet, mirrors, window locations, window styles, door styles, cabinets layouts, lighting, tile, door handle color and style, and the list goes on. Working with a designer can help you get through these smaller, but important decisions.
Tips:
- Talk to a Realtor® that is experienced in new construction for a more detailed explanation of the process of building.
- All builders are not alike. Check references and ask for testimonials.
- Change orders add up quickly. Make sure you know what you’re ordering even before the basement is being dug.
- Lot selection is important. Choice lots often cost more but may prove beneficial at the time of resale.
- Ask about the master plan for the development. Future roads, parks, retail and school locations may directly affect the aspects of the property/neighborhood that you first fell in love with.