By Geoff Smith
It should be no secret that homebuilders are having trouble keeping up with the demand in the market right now. So it appears that homebuyers thirsty for newly built homes are finding what they want in recently built homes.
A new chart released by Atlanta’s own Smart Real Estate Data shows that 33% of all Metro Atlanta resales(homes sold that are not new construction) in 2017 were homes built between 2000 and 2007. That’s pretty significant when you think about the fact that we’ve been building new homes in the metro area since the 1960’s with the attitude that we can’t build them fast enough.
Mitchell Palm with Smart Data says homebuyers are attracted to homes from this area for several reasons.
“These 10-15 year old homes offer decent layouts, a lot of home for the price, and larger lots than what most homebuilders are providing today,” he said. “Update some flooring, counters, appliances, and a fresh coat of paint, and you have practically a brand-new house.”
Housing designs have gone through many iterations throughout the years, but a relatively new tool to builders became mainstream in the late 1990’s: the engineered beam. This improvement made it cost-effective for builders to start offering more open floor plans. Before this, if a builder wanted to have an opening from one room to the next of more than, say, 10-16 feet, they probably had to use a custom-built steel beam. Today, you can go to any professional supply store and pick up an engineered beam and cut it to size.
That’s why houses built in the 80’s and 90’s all have those similar layouts – you walk into the foyer with a dining room on one side, a formal living room on the other, and the kitchen and den in the back. The engineered beam made is so that you didn’t have to walk through a small doorway to get from one to the other. And we seem to like that.
In fact, when I had my remodeling company 10 years ago, we went into several homes built in the 1980’s and 1990’s and used engineered beams to remove walls and open up floor plans. It certainly made the house feel bigger. Brenda and I used engineered beams to open up the floor plan in our first home – an 1,100-square-foot cabin originally built in the 1920s. The difference there was night and day.
But there are a lot of things people want out of a new home. Just the fact that it’s new is attractive to a lot of homebuyers. I have people come to me all the time interested in getting a construction loan so they can build a house themselves. They love the idea of picking out all the finishes and the layout and making the home that much more personal to them. Few actually have the stomach for it though. Building a home today is no joke. Homebuilders in our area have this down to a science, and even they are having trouble keeping costs down. It’s a pricey market to build in right now. First of all, there is nowhere near enough labor to build the demand, and builders are having to lure subcontractors away from other builders by paying them more. Regulations have made building more expensive. And wood prices are through the roof – pun intended.
Most of those that come to me wanting to build themselves either end up buying new construction, or doing what Palm from Smart Numbers said and buy a recently-built house and upgrade all the finishes.
It’s an interesting market right now. But with home values and interest rates going up like they are, there’s no time to buy like the present.