The current state of the Maricopa real estate market has more homebuyers considering new construction than since the heyday of 2006.
Yes, new builds are back with a vengeance.
To put the current market into perspective, 89 city homes are currently listed for sale, according to MLS, and 29 of them are new builds. That’s a full third of the homes with listings that have no photos, just an artist’s rendering of what the completed home might look like. In all actuality, a current aerial view of the “home” is probably a dirt lot, or a concrete foundation.
Typically, buyers are focused on resale homes, but purchasing a new build should not be taken lightly. The most limiting factor in the decision would be the buyer’s timeline.
The time factor is so important it can almost force a buyer to focus on one over the other. For instance, if a buyer needs to move into a house with, let’s say two months, they really only have one option, and that is to go resale. There is an outside chance of getting a new build that is already completed, but in the current market, choices are limited. If a buyer has an “open time frame,” meaning they are open to move in two months or 12 months, they can consider both new and resale homes.
It’s worth taking a moment to review the pros and cons of new builds and resale homes in the Maricopa market:
• Financial assistance. Builder may pay buyer’s closing costs if using a preferred lender
• Customization options. Some builders will have minimal choices; some will have a full array of customizations.
• Greener homes. New homes are more energy-efficient and environmentally-friendly.
• Newer community. Some buyers like new things.
• Lower maintenance costs. The mechanical, electrical and plumbing systems are new.
• Smart homes. Some newer homes will have wi-fi controls on your air conditioning system that can help save money on electrical bills but also allow you to walk into a nicely cooled home after a long day of work.
• The wait. There is a longer timeframe to move in with a new build. Builders are quoting at least eight months for a completed home as builders deal with heavy demand and supply chain delays.
• Uncertainty. Completion date for a new home can be a huge window. A four-month timeframe for completion will be narrowed down toward the finish.
• Location. Many of the new homes are on the outskirts of town (though probably not forever).
• Price. Specifically, base price vs. final price. That is, the price you see on the sign driving up to the models compared to the price after you have made all of your structural changes and upgrades. There can be a large difference.
• Interest rates change. You’re probably going to lock in your interest rate before the house is completed. But what if the interest rate goes down in the meantime?
• Specific timeframe. You will know when the home is yours.
• Location target. Homebuyers can search for a specific community or school district.
• Cheaper pool. A pool that’s included in the sales price takes advantage of the lower interest rate on a home loan. Buying one later means paying a higher interest rate on a pool loan.
• Mature look. The vegetation and trees are mature in an established development.
• Cost. The cost of a resale home versus a new build is going to be less expensive per square foot than a new build or spec home.
• Maintenance costs. There is more risk of an expensive item breaking down. Resale buyers should know during Arizona’s brutal summers that the average life of an air conditioning system is between 10 and 15 years.
• No customization. What you see is what you get.
• Utility costs. Older homes are less environmentally friendly/energy efficient, so your utility bills may be a little bit higher than a new build or spec home.
• No warranty. Insist on a thorough home inspection before buying and consider purchasing a warranty
• Seller’s market. Currently, buyers are making several offers before getting an offer accepted. Supply is down and demand is up. Buyers are bidding over asking price and still not winning the house.
When looking for a home in the Maricopa real estate market, having a local agent by your side can make all the difference. Even with a new build, your agent can get you the best deal possible, and look out for your interests.
Your agent should accompany you on your first visit to the model homes. Generally, there is no cost to you having your own buyer’s agent.
Brian Petersheim is a Realtor with HomeSmart Success in Maricopa.