Buying a brand new home is suddenly becoming a viable option for buyers moving to the Sequim area. During this past seven year recession, home builders have not been building homes. Home building just died back in 2007 or 2008. Many builders went out of business, and a number of Sequim developer/builders went bankrupt and lost their their subdivisions to bankruptcy trustees. The inventory of used homes has been shrinking as those homes have been slowly selling since 2007, and now we have a crisis. There are hardly any homes in the inventory that retirees want. Unless a brand new listing comes on the market, you may not be able to find what you want. So builders are suddenly finding buyers knocking on their doors, and once again they are getting orders to build brand new homes. It has been a seven year drought for home builders in Sequim.
Brand New Home
There is a definite advantage to a new home, aka new construction. If you have a home builder build the ideal floor plan for you, you get exactly the new home that is best suited for you. That’s a good thing. But you also don’t have the maintenance of a used home (roofing, heating, heat pump, plumbing, appliances).
The reason buyers have been buying used homes rather than have a new home built is because used homes have been about 30% cheaper during this past seven years. Buyers are willing to compromise a little to get a home close to their ideal retirement home for a 30% savings.
Brand New Home Prices v. Used
But that savings has almost vanished as the inventory has been shrinking and buyers are thinking, “I’ll just buy a brand new home or have one built, since I can’t find a used one on the market that I like.”
Even newer used homes are hard to find if we are talking about a 3 bedroom, 2 bath 1,800 to 2,200 square foot home in a nice area priced from $275,000 to $425,000. So buyers are finding that they need to consider building a home. This is a big development in Sequim. I have been watching this for seven years wondering when we will find balance again between sales of used homes and new homes.
Of course, you should exhaust all efforts to find a used home that you love, but if you are looking at homes in the MLS, and if you are having trouble finding the ideal home, you might want to consider building a new home.
Last Updated on January 4, 2015 by Chuck Marunde
Given that the cost of used homes have increased to the point that there isn’t much difference between Used VS. New, then it would seem like that is the way to go. Even if there was a larger disparity in the selling price of a used home compared to building a new home, I would still recommend building a new house because you can then build according to what you want instead of compromising more with purchasing a used home.
Jake, yes, but the risks of building a new home are risks you do not take if you buy an existing home. For example, if you buy a vacant lot without power, without a well, and without a septic, those are all expensive to get done, but there is a risk. While we are very fortunate in this area to have fantastic water quality and we have never had water levels dropping as they have in California and Arizona, there are a few people here who have had to dig deep wells, especially if your lot is on the side of a mountain. One gentlemen had to drill a well 535 feet deep, and he still got a very low quantity. While that’s rare, still it is a risk you take when you buy a vacant lot that is outside the municipal water systems. And septic systems are expensive to install now, because counties are requiring mound systems over conventional systems, so that’s another $24,000 or $27,000. And that assumes the land will perc sufficiently for one of the 24 septic designs that are allowed. If electricity is not already to the corner or boundary of your lot, you’ll have to pay to have the power company bring it to your lot, and then you’ll have to pay for a box and to run it from the corner of your lot to your building site. And here’s something I just learned that I’ve never heard of before. There’s a nationwide shortage of transformers, and I’m hearing there are none available here. That means no new homes at all, at least for now. Crazy!