The recent housing market has created a lot of unprecedented “buying” opportunities for the new home buyer. But while it’s a great time to take advantage of some pretty dramatic economic factors, there a couple of things to beware of.

Don’t be fooled by the fear factor generated by overzealous media coverage of a crisis that has rocked the nation.

While Kansas City has felt the tremors of a nationwide mortgage crisis, we are generally steady folks here in the Midwest. We’re also pretty conservative and when things get bad, we tend to hunker down and tighten up the old belt. Historically, while the Midwest is certainly not immune to economic downturn, we typically ride out the storm without the dramatic fallout experienced elsewhere.

The nation had 1 million in houses for sale at the peak of this crisis. Kansas City had about 6000 finished new homes sitting empty.

Now we have about 3500 in new home inventory and it’s dropping at a steady rate of about 200 per month. Typically, 3500 is within the normal range for available inventory. In the current market, it will take a little longer to dwindle than usual.

But in a few more months, the deals of the 2007 housing crisis will be over.

Most builders have dramatically reduced their speculative home inventory. And most of these homes were built based on 2006 pricing.

My advice to anyone who has been waiting to buy and new home is to  jump now! Don’t wait. And while there are still some attractive values in speculative homes, it’s also a great time to build a custom home.  

Don’t be fooled by Foreclosures

 Many of these so-called foreclosures are really “pre-foreclosures” masquerading as the spoils of misfortune ripe for the picking.

I’ve seen buyers buy a “foreclosure” only to discover they could have purchased the  custom home of their dreams for the same price or for an inconsequential increase with a full warranty.
 
Instead, they find themselves wrought with cracking basements leaky windows. Worse yet, they have nowhere to turn.

Truth is, you don’t know what you are getting when you venture into a foreclosure.

All the media hype around foreclosures creates a false sense of urgency. Before you jump into the murky waters of foreclosure, take time to visit with your local builder. Compare apples to apples and you will most likely find that your hometown builder can better meet your needs at a value that may surprise you.

A professional builder knows his product and he stands behind it. He has a relationship with the suppliers and craftsmen who put your home together piece by piece, nail by nail.

Your home is not a commodity

Your home is not a commodity. It is the single most important purchase you’ll probably ever make it in your lifetime. Your decision spins into motion factors that will affect you and your family in profound ways: where you will raise your family; where your children attend school, who your neighbors will be; your quality of lifestyle; the ease or strain of dealing with maintenance issues in your home. 

Your home is a complicated, unique and personal product; a carefully orchestrated symphony of design, materials and craftsmanship

There’s a lot you don’t see that will determine whether your house will add to your families happiness or dominate your time and drain your pocketbook.

Times have been tough and while rising fuel cost are putting incredible pressure on material and labor, suppliers and craftsmen are eager for work as they wait for builders to decrease their inventories.

These suppliers and craftsmen have shouldered the bulk of the price increase burden in order to keep their crews busy and quotas up. But eventually, as inventories continue to dwindle, the market will right itself again.

That’s when 18-24 months of pent-up price increase will unleash itself on the marketplace. And when it does, the face of the Kansas City housing market will look a lot different. There will be fewer laborers and their materials will be much more expensive. Think of it. Lumber, plumbing, tile, plastics and anything to do with steel. Look for everything to increase twenty to thirty percent.

The bargains are almost over.

So if you’re thinking of buying an existing new home or custom-built home, look for a quality builder who will stand behind their product.

Find a community that has remained steadfast in its brand commitment and resisted the temptation to resort to the sublevel scrabble strategy of assuming price is a marketing plan. It’s not.

It won’t sustain the community’s integrity to provide a quality environment over the long haul.

Then get ready, get set and go! That’s right, jump in there and get started with the home of your dreams!

Machelle Riffe, Riffe Homes

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