Buying and Building Houses in the Current Housing Market
Hi all – Well this is one hell of a situation. Is anyone else trying to buy or build right now? The pandemic has upended my plans to buy/build (the latter requires me buy land first). I was about to choose between Tucson and Vegas, and now I’m kicking myself for taking my time. I thought I had all the time in the world…
Has anyone tried the video tour option for checking out homes? I haven’t been willing to go that route just yet. A house is a heck of purchase to commit to based on video telepresence alone. And I was going to run wireless signal tests, and do home inspector type things like IR tests of HVAC systems. I also feel like I need more than vision to get to know a home, e.g. how it smells matters to me. So while sending a home inspector take a look would improve on the video method, it wouldn’t be enough.
Land might be an option for remote buying, but I’m still reluctant to buy land without standing on it and doing the dramatic 360 degree turn 🙂 And even if I was willing to buy land remotely, in my context I’m choosing between 1) buying an already built house and living in it, 2) buying a house, tearing it down and building a new one in its place, or 3) buying land and building a house. The decision to buy land will be informed by what existing houses are available (and where they’re available), which requires that I inspect those houses before pulling any triggers…
So have you dialed back your plans too?
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Replies
Always looking but I always find a reason not to. The majority of homes sold in my area are built by production builders. Consequently, buying one of these homes is like buying a car. You don't have any input on how the structure is built because you don't own it and they have no problem letting you walk because demand is so high. It's a take-it-or-leave-it approach.
On a side note, I'm glad we passed because two communities we looked at are now having problems with water on exterior walls (Brick and Stucco). I'm so happy I didn't double my mortgage payment just to have the builder re-build a 3 story brick wall because the bricklayer couldn't be bothered to leave an air-gap between the sheathing and the brick (copious amounts of mortar bridged the gap).
John, what do you mean about not owning a house built by a production builder? Why wouldn't you own it, if you bought it?
What part of the country are you in? That's interesting about the brick and stucco. So it's not EIFS stucco? (https://thestuccoguy.com/what-is-eifs-stucco/) The water problem is because there's no air gap?
BlueSolar the way I understand it, with the subdivision builders. A salesman shows you the model you select from a list of a few options, pick a lot and give them a deposit and at that moment you own a piece of paper that says they will build a house at some later date.
So while the home is under construction the land the lumber and the concrete is all owned by the seller up until the day of closing. In fact some of the contracts prohibit the buyer form visiting the site without notice and an escort. Some that ignore the contract have been arrested for trespassing.
Walta
When you buy what is essentially a spec house before completion you are taking a leap of faith in the quality of the build. In return you get a slightly reduced price and some very limited input into finishes. There is no way a developer wants to turn that into some version of a custom build, and have clients, who at that point have very little skin in the game, wandering around the site making comments and changes.
Many custom builders write limitations on owner visits into their contracts too. Because the majority of posters here are getting houses built, or trying to contract one themselves, the comments tend to be a bit weighted against builders, but I could spend days recounting stories about intransigent or annoying clients too.
Walter basically summed it up. Something like 75 percent of the housing stock in my region are built by production builders. Btw..much of Las Vegas was/is built that way as well.
I'm in the S/E USA. EIFS isn't really used anymore in my area due to the scandal with DryVitt some 30 yrs ago. With the brick homes I know for a fact the bricklayers didn't care about mortar bridging the gap due to my own visual inspection of a wall on another unit. The unit I'm talking about is on the West SouthWest side and consequently entirely exposed to weather. One day a three story scaffold went up and sections of brick had been removed. I think around that time we had 3 weeks where it rained every day so I suspect that because the wall was never allowed to dry the mortar in contact with the WRB eventually caused a problem with the sheathing.
Similar situation with the stucco example. That neighborhood was literally across the street from the other. The stucco units have other issues as well which I anticipate will reveal themselves in a couple of years.
To my mind if you can swing this as a cash deal you are the king right now. Prices of homes are down at this moment and sellers maybe more motivated than ever.
My guess is if you are seriously considering making an offer agent will find a way get you thru the home law or no law.
A few months ago getting a contractor to bid a job was not easy. I am guessing they will be standing in line now.
I had a friend that built a house 2008 and most of the subs would shake his hand and thank him for the work.
Walta
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Housing prices are the highest they've ever been in Canada, pretty much across the board.
Trevor, do you have record low interest rates on mortgage loans just like the US is currently seeing? Low mortage rates are another reason for a rise in housing prices. In the US, we're also seeing a huge surge in people looking to get out of cities after all of the recent scares, which has driven up prices in suburban and rural areas. I'm in a semi-rural area, for example, and I've heard from others out here that homes get multiple offers over asking within the first 24 hours after going on the market. Crazy.
Bill
What a difference a year makes! While Walta might have been right then, right now you can't book a decent contractor for hardly anything until NEXT year as they're all booked out.
All cash doesn't even matter for a buyer right now as there just aren't many homes for sale at all.
Even though construction has stayed open in BC, I've had one construction job, and two design projects cancelled. No tea if they will ever re-start.
We bought our property four and half years ago and finally decided to build starting this year even despite the ongoing pandemic and the lumber and steel prices threw the roof, we are still going ahead with it.
We've been waiting for the right timing and seem to have always found an excuse to delay things. One positive thing we have going for us is the house prices have really increase which is helping offset the increase in building material.
Arnold
The price craziness isn't the only problem right now. My suppliers have been warning me about SHORTAGES too, and most of them expect the shortages to get bad sometime this summer. The materials I've been hearing are probably going to be in short supply by summer are:
1- Copper wire: I'm being told there may be issues keeping some gauges in stock, but no one knows which ones. From what I've been seeing so far, I expect the wire gauges that will be in short supply will probably be the most common building wiring used in residential projects -- 12 and 14 gauge. I've been seeing the most issues with those sizes myself.
2- PVC, which includes both conduit and pipe. There is a global shortage of PVC feedstocks, a MASSIVE shortage, apparently, due to a lot of chemical plants being offline for various reasons. I've seen box stores start to ration PVC conduit, and I've seen at least one box store run out of 1" completely along with a note that their vendor can't supply them with product. My commerical supply house says they haven't had problems getting PVC conduit so far, but they know problems are coming and expect to start seeing issues in the next few months or so.
3- Pressure treated lumber. My lumberyard is expecting to have similar supply issues with treated lumber this year as they did last year. That probably means a lot of the most common deck building materials, with decking especially, being in very short supply.
My electrical supply houses (I work mostly with electrical stuff, BTW) have been telling me there are all kinds of supply issues with various switchgear like circuit breakers, but they can usually find the stuff when needed, they just have to call around to different suppliers more than they used to.
My recommendation to you is to keep an eye on materials, and buy your stockpile earlier than you normally would. If you buy stuff earlier than usual, you'll have more time for things to come in before you need them, and less chance of stalling your project.
These are exciting times to be in the construction industry...
Bill
A couple weeks ago there were no single or double gang receptacle boxes to be found within a 20 mile radius. Weird.
My expierience so far has been that the shortages on component level stuff is kinda random. Some network jacks I use I can get in single packs, but not in the cheaper 25 packs, for example. I have some relays on backorder with Omron that have missed their ship date now by a bit over a week too. It makes it hard to plan projects.
Allowing extra leadtime to get everything you need for a project is a good idea right now.
Bill
I've been hearing the same thing but not about the cooper wire and PVC. This year I am only planning on doing the excavation and concrete for both the house and detached garage and build the garage. Not much I can do since I don't really have anywhere to store the material and leaving it at the property is not an option due to theft.
I'll have to take it as it comes. Not much I can really do at this point.
Arnold
All I know is that in my sleepy Midwest town, the price of a stud grade 2x4 is almost 10 dollars. That alone would keep me from building, and I thank the lord I finished the bulk of my last project house 6 months ago.