Why More Buyers Are Turning to New Construction This Year

There’s been a lot of talk lately about how a government shutdown impacts the housing market. You might be wondering: Is it causing everything to grind to a halt? The short answer? No. The housing market doesn’t stop. It keeps moving. Homes are still being bought and sold, contracts are still being signed, and closings are still happening. The difference is that a few parts of the process may slow down a little, but overall, the market continues to function. Here’s What Typically Happens Whenever the government shuts down, some federal agencies temporarily close or scale back their operations. That can cause a few hiccups in real estate, especially when it comes to processing certain types of government loans and insurance requirements: “ Applicants for FHA, VA, or USDA loans—which account for about one-quarter of all mortgage applications—may encounter significant processing delays due to agency furloughs.” - Selma Hepp, Chief Economist at Cotality “By recent estimates, more than 2,500 mortgage originations per working day are at risk of delays during a shutdown . . . ” - Zillow Flood insurance approvals may also be paused. The National Flood Insurance Program can be temporarily affected , which delays closings in flood zones. Even with those challenges and delays, most transactions still go through. Buyers keep buying, sellers keep selling, and agents keep helping people move forward. The Housing Market Usually Bounces Back Fast And you can see that play out in this data. If you look back at the most recent government shutdown that began at the end of 2018 and lasted for 35 days, sales activity dipped very slightly during the closure but picked right back up once the government reopened.  Data from the National Association of Realtors (NAR) shows existing home sales slowed for about two months, and then rebounded quickly as delayed closings worked their way through the system when the government reopened (see graph below):

If you’ve served in the military (or if your spouse has), you have access to one of the most powerful homebuying tools out there. The chance to buy a home without having a down payment. Unfortunately, 70% of Veterans (that's 7 out of every 10) don’t know about this benefit, according to Veterans United. 

These days, you’re going to want to get your price right when you get ready to sell your house. Honestly, it’s more important than ever. Why? While you may want to list high just to see what happens, that’s a plan that can easily backfire, and it’s going to cost you in today’s market. And the risk isn’t just missing out on offers, it’s missing out on the move you needed to make in the first place. The Real Pitfall of Overpricing  Many homeowners remember what their neighbor’s house sold for a few years ago, and they want to chase that same sky-high number. The problem is, that was a different market. Today, there are more homes for sale . Buyers have more options to choose from. They don’t have to get into bidding wars where they offer way over asking just to compete. Now they can come in at, or even below, list price. And if you’re not open to that, they’ll move on. Lisa Sturtevant, Chief Economist at Bright MLS, explains: “Buyers will have more leverage in many, but not all, markets. Sellers will need to adjust price expectations to reflect the transitioning market.” But here’s the good news. You still have one big advantage as a seller. According to the Federal Housing Finance Agency (FHFA), home values went up by a staggering 54% over the last 5 years. So, even if you compromise just a little bit on your sale price today, odds are you’ll still come out way ahead. The challenge? Most sellers aren’t thinking about it that way. They’re stuck on what a neighbor got months or years ago – and that’s a costly mistake. Overpricing Can Stall Your Whole Move Here’s what happens. A seller lists too high. Buyers stay away. No offers come in. The house sits. And suddenly, that seller is facing a tough decision. Do they cut the price? Stick it out? Or give up altogether? Unfortunately, a late price cut may not be enough. Buyers often see that as a red flag that something’s wrong with the house. That’s why some sellers are opting to just pull their listing off the market entirely. In a recent survey from John Burns Research and Consulting (JBREC) and Keeping Current Matters (KCM) over half of agents (54%) say there are more homes being taken off the market than usual.

If you’re toying with the idea of selling your house, you’re probably wondering how much it’ll cost. To be honest, the final number will depend on several factors like the offer you accept, if you help with your buyer’s closing costs, how many repairs you tackle, and more. So, to give you a ballpark of what to expect, here’s some information on a few of the expenses you’ll want to be ready for ( see graph below ):

For some buyers, there’s a misconception that newly built homes aren’t made to last or fall short of the quality you can find in older homes. Unfortunately, this is turning some buyers away from what may be one of their best options in today’s housing market. As Builder Online says : “As resale inventory remains limited and the price spread between new and resale homes narrows, new homes are increasingly an attractive value proposition for buyers, with incentives such as rate buydowns a way to help address ongoing affordability challenges. ” So, is there any merit to the myth? Let’s break down the best way to make sure you feel good about looking into new home construction. That way, you’re not missing out on such a great option today. Choosing the Right Builder The key to making sure you get a quality newly built home is to choose a good builder. Reputable builders adhere to strict building codes and standards, use advanced construction techniques, and often offer warranties that cover structural issues for several years. That’s why the Mortgage Reports offers this advice: " When embarking on the journey of buying a new construction home, one of the most important steps is selecting the right builder. This decision can significantly impact the quality and satisfaction you derive from your new home. ” And while you could dig into research about all the builders in your area, there’s an easier option to get the job done: lean on a pro. When you work with a local real estate agent , they already know about the builders and the new home communities under construction in your area. Beyond that, maybe they’ve even worked with other buyers who opted for a home in one of those neighborhoods. Here are just a few of the things your agent will help you with: 1. The Builder’s Reputation: Your agent will help point you toward builders with strong reputations and positive reviews from previous buyers. Additionally, your agent will make sure the builder is licensed and insured. Membership in professional organizations, such as the National Association of Home Builders (NAHB), is also a good sign of a builder’s commitment to industry standards. 2. Their Model Homes: Your agent will also be able to tell you if the builders have model homes you can tour. And when your agent walks through the model with you, they’ll draw your attention to the little details that matter most. Things like the quality of finishes, layout, and overall feel of the home. 3. Builder Warranties: Your agent will also be able to help you navigate any builder offers or incentives. Reputable builders often provide warranties to cover major structural elements of the home for a significant period of time. This is a testament to their confidence in the quality of their construction. 4. Getting Inspections : Even with new homes, inspections are crucial. Your agent will coordinate the inspections with licensed professionals to ensure the home meets safety and quality standards before you move in. Agents Are the MVP When You’re Buying a Brand-New Home Maybe that’s why data shows homebuyers unanimously scored their agents higher than their builders when looking back on their recent purchase: