If you have been thinking of building a new home or remodeling your existing one I suggest seriously pursuing it. If not, you may just be missing the opportunity of a lifetime. I have been in this industry for more than a few years now, and I cannot remember any time that the market has been more favorable for the buyer / client. Here are a few of the big reasons:
- Interest rates are ridiculously low.
- Contractors and subcontractors are highly motivated. In many cases they are working with little or no profit just to keep their good people busy. And since they are not that busy, they have the time to dedicate to your project. An associate of mine has had a flood of very high quality contractors practically begging to bid on a bathroom remodeling project. I have had numerous local contractors request to bid on a project that is several hours outside of our traditional building area.
- Lot costs have plummeted. Developers are looking to unload. Indeed the banks now own quite a bit of really nice land. Call up a few of your local banks and ask for their property listings. You might find a great deal by buying directly from the bank.
- Many material costs are at 10 year lows. Since no one is building demand is very low and inventories are up. Classic over-supply and under-demand.
- Everyone in the process is open to negotiation. Realtors, Land Owners, Architects, General Contractors, Sub-Contractors, Suppliers, etc.
Seriously this feels like the perfect storm - as in the perfect buyers market. A great opportunity to do a beautiful project at the best possible value.
How long will this last?
Nobody seems to know. But statistics are beginning to show an improvement in the sales of existing homes and once inventory is diminished construction costs will begin to rise again. Nobody knows how long this "window" will be open, but we all know it will not be open forever.
Don't Feel Guilty!
It is true that the current market allows the buyer to take advantage of the situation. But at the same time the builders, vendors, designers, realtors that are surviving are truly appreciative of the work. And if you pick the right team they are going to give you their best.
If you decide to proceed with a project, make sure you do it smart. For instance "McMansions" have a bad name right now and the builders cannot seem to give them away. This might not be the type of home that will be in great demand even after the turnaround. Folks are starting to look for a more modest, smartly designed and quality constructed home. The type of homes as seen below designed by Ron Brenner Architects.
Utilize the expertise of your professionals (architects / designers, general contractors, realtors, etc.). Don't try to design and construct the project yourself. You will get a better outcome and will carry less burden if you have a good team around you. And besides, right now you are practically getting their services for free!