Considering New Construction In The Denver Area?
New Can Be Nice!
What have the builders done?
Well, if we take a look back to the beginning of the decade, single family new construction starts were at 15,000 units per year. For calendar year 2009 the new start figure was 2,400 (not a misprint). That is a huge reduction. It does indicate that this time around the builders are not getting so far ahead of demand that they have huge amounts of excess inventory. It is also significant to observe that several large regional and national builders have left the denver market. Many smaller builders are simply out of business.
How does that affect you as a potential new home buyer?
If you have your heart set on a new home where you get to select a site and all of the options and and finishes, then you should expect that you will be paying more than if you purchased a very similar home constructed in the last 3-5 years. How much more will depend on your negotiations with the builder. They builders will not build below cost, but they do want to keep their activity, employees and subcontrators busy so will build a lot closer to “cost” than in the past. If you find a new home that is esentially complete, there may be some room to negotiate price, additional upgrades or perhaps landscape.
Is there a better/best decision?
Over a 3-5 year ownership, you will probably be ahead by negotiating a purchase of an existing newer home. It will probably have basic landscape and window coverings in place and components should not be “wearing out” over that period.
How can I make that determination?
With an experienced agent on your side you can evaluate both options and then know what the financial difference is between the new vs. the existing. For some buyers, the incremental cost of “new” is simply worth it.
You can contact me for assistance. I am familiar with the builders and how to negotiate with them.
Russ Murray 303-721-1100, ext. 1 russ@buyerbroker-denver.com