During the COVID-19 pandemic, one market recognized opportunity. The property market has exploded in the previous two years.
Despite the fact that a pandemic changed everyday living dramatically, property sales soared to levels not seen in years.
What is the reason?
It’s a little tricky, but three variables contribute:
- Reduced mortgage rates
- Millennials who are first-time homebuyers
- Homeowners saw the need for additional space after being compelled to spend more time at home due to the COVID-19 pandemic.
We frequently receive inquiries from homebuyers who believe that creating a custom home will be less expensive than acquiring an existing home. Many believe that the custom house building process expedites the process of purchasing their next home. Their perception is largely shaped by what they are witnessing as a result of the housing boom: a restricted supply of houses, bidding wars, price inflation, and many properties in need of differing degrees of investment to bring them up to date.
While the real estate market fluctuates, custom house building remains a consistent alternative for people seeking a genuinely unique property.
While building a new home is not always speedier or less expensive than purchasing an existing home, there is an intangible value that’s attached to the home.
Moving into a home is a significant life event — the kind that warrants a photo with your family to commemorate the occasion. Consider walking into your newly completed home and immediately familiarizing yourself with every square inch of it. Consider the peace of mind you’ll have knowing that no surprises from the previous owner will counteract any cost savings.
Creating a home is a long-term investment; you can be confident that it was made with modern materials and adheres to the most stringent building codes.
Most importantly, consider the sense of pride you’ll feel knowing that you designed your home to fulfill all of your needs.
Stone Creek Building enjoys collaborating with prospective homeowners to help them realize their idea of a dream house. Our in-house design staff is happy to assist you in creating your next home or modifying one of our pre-designed floor plans.
BUYING EXISTING PROPERTIES: YOU RECEIVE WHAT YOU PAY FOR
Remember the boom we discussed?
It slowed in 2021 and has now reverted to pre-pandemic levels. According to Realtor.com’s October 2021 housing report:
Nationally, the inventory of active listings decreased by 21.9 percent from 2021 levels, while the overall inventory of unsold houses, including pending listings, decreased by 14.8%. Active listing inventory is down 51.9 percent year over year.
Newly listed properties fell by 2.3 percent nationally and by 4.8 percent in large metro areas during the last year. Sellers are still listing at a rate that is 11.6 percent lower than the average from 2017 to 2019.
October’s nationwide median listing price for active listings was $380,000, an increase of 8.6 percent year over year and 21.8 percent year over year. In large metro areas, median listing prices increased by an average of 5.2 percent over the previous year.
In October, the average home stayed on the market for 45 days, down 8 days from the same time last year and 21 days from 2019.
And, while the housing market will likely be tight in 2022 (more on that later), it will likely be less so than in 2020. Nonetheless, the housing deficit is projected to persist.
With the real estate market projected to stay tight, finding a home that fulfills all of your requirements precisely will be difficult. Existing homes were not created with your family in mind. You’re almost certainly going to have to make some concessions.
Acquiring an existing home is similar to purchasing a used automobile in certain ways.
Newer used autos are more expensive. Likewise, modern residences do. If not properly maintained, a secondhand vehicle can soon become a money pit. The same is true for existing homes; years of neglect eventually catch up with them.
To continue this metaphor, similar to a classic automobile, older residences were not built to new standards or with modern materials. At some point, something will require replacing. And acquiring period-appropriate components becomes increasingly difficult as time passes. Installing contemporary aspects or employing procedures that are regarded typical in the modern era might be a pain as well.
FORECAST OF THE HOUSING MARKET IN 2022
Housing market forecasts for 2022 all indicate that the present real estate inventory will continue to stabilize. However, market experts anticipate that buying and selling homes will continue to be extremely competitive.
As of fall 2021, there is a supply shortfall of approximately five million dwellings relative to demand. And the shortfall is unlikely to abate very soon. Not only would it be more difficult to acquire a new home, but it will also likely be more expensive than in pre-pandemic days.
Additionally, industry analysts are concerned that the mix of events that lead to the housing boom is indicative of a burst housing bubble. In other words, if potential home buyers opt to stay put until demand and prices decline, the housing market might swiftly return to pre-pandemic levels.
Things appear to be improving on the custom house development front for 2022. Despite supply chain concerns that are driving up the cost of building materials such as lumber, faith among individuals considering new house construction and home builders is growing.
Another encouraging sign for new home development in 2022 is that, despite a decline in new home construction, the number of new home permits issued climbed.
CONSTRUCTION OF A CUSTOM HOME AS A BETTER INVESTMENT
Choosing a new home is one of the most significant decisions you’ll ever make. Whether it’s a custom-built or existing home, it’s a significant investment that you’ll live with for years.
While creating a custom house is not the cheapest option in terms of upfront expenditures, its long-term value is unmatched. If you’re in the Portland, Oregon area and need a custom home built or renovations, contact us to see if we can help!