Making your new (custom) home plans? We can help
Recently, the housing market features uncertain mortgage rates and new lending rules cause some confusions to the general public. It leaves potential buyers wondering if now is a good time to invest, and if their investment will be safe in a new home.
I would tell people to think of building a new custom home that they want to live in at least 5 years, if they want to make the time and investment worth it. With the luxury of having a new home and not putting money into repairs and updates, you can use that money on landscaping, finishing the basement and/or completing the garage.
But once these items are complete, does it automatically mean that a brand new home will appreciate or at the least hold its value? Are all new homes equal? Are all locations of new homes equal? This is what I want to discuss today.
The oldest saying in real estate is also the truest: location, location, location
Let me tell you my personal story. In 2011, I wanted to build a new home so I would be a better asset to my employer, and it would be an example to my clients who wanted to build a custom home. I was stuck between a few lots in a desirable neighborhood. I ended up spending $180,000 for a 50’ park backing lot. At the time, the park was not completed and I didn’t have any idea what my neighbors’ homes would look like. But with a little faith, I signed on the dotted line and moved ahead with building a new custom home, with a unique floor plan that I thought would be great to live in or great for resale. The other option was to build the exact same home on a non-park backing lot. I would have spent around $50,000 less and had more money for other things. Now six years passed since I moved in, and I do not regret the decision. During this time, I have finished my basement, landscaping and fencing. Now there’s no major housing expenses, repairs or worries, and I get to enjoy the view of a fully developed green space.
If I wanted to replace my lot now, I would be looking at a minimum of $250,000 and up. The land values have risen and the supply of park backing, top locations have been gobbled up by new home owners. I am confident I would get closer to my asking price and a quick sale if I put my home on the market this year. It’s simply because I invested money into my location. That money allowed me to enjoy the perks and views of a park, and I don’t need to worry about the potential selling in a slower time. This is not because anything special I did other than working with my home builder to ensure I had a top location.
With the golden “location rule” in mind, Deveraux is always working with land developers to make sure we hold great lots in our inventory. It is not always about backing a park. Maybe it’s about being on a nice street with diversity in the homes and comparable values that complement each other. Or, it’s owning a lot in a bay with a large yard that would accommodate a pool in amazing outdoor space. It could also be getting a wider lot that allows you to create amazing curb appeal that also adds to resale value. For clients who want to invest in a new home and a good location, Deveraux Homes is your best choice.
Locations that Protect Your Investment with Value Appreciate
Compared to what you may have bought in the 90’s or earlier, land values have gone up to a level that could make you scratch your head. However, as we keep a finger on the pulse of western Canada, there’s no reason to believe that top locations are going on sale or be at a big discount. In the resale market, we see that homes in top locations provide protection to the home owners’ investment during a slower time. In good times, it creates the biggest increase in property values.
When a new home prospect comes to meet with Deveraux Homes, we spend a lot of time talking about current needs, wants and future growth. We talk about budgets for now and the future, we also talk about size and style of home. But before any of these, the most significant discussion is about LOCATION. Not all lots are equal. In times like these, you want to ensure you invest in a location that allows your new built home to appreciate.
Please feel free to contact Deveraux to discuss where you would like to lay roots, and we will get you a location that you can be proud of and feel safe investing in.