When my husband and I realized last summer that, since we both work remotely, we could live anywhere, we first decided to move to Colorado and pursue a new build. We found many listings for “new construction” communities with images of beautiful new homes that were supposedly “ready to build.” We thought it would be easy to pick a home and get it built. It wasn’t until we found a realtor and started looking for a homesite that we realized how misleading “ready to build” was.
There was a time you could go into an advertised new neighborhood and pick your lot, choose from a selection of floorplans, then create a semi-custom home by making certain choices like the kitchen cabinets, countertops, and flooring. That’s what we were hoping to do. But now, unless you have nearly $1 million to spend, there are no “ready to build” homes.
At first, I, like so many other people, started looking on apps like Redfin and Zillow. We quickly found a community in Colorado that we fell in love with; its homes had a floorplan with everything we wanted. The base price for the model was well below our budget. It was perfect.
When we spoke to a salesperson in the community, however, we learned that we couldn’t just pick a lot and a floorplan and go from there. They didn’t have any lots available, nor did they think they would have any available until early 2022.
We were dismayed but undeterred. We were put on a waiting list and continued our search, relaxing a bit after knowing we had this chance coming up eventually. But every community in Colorado was the same. We were put on waiting list after waiting list because no one had any lots available.
Meanwhile, the base prices jumped $20,000 in two months and would only go higher by the time any lots came available. At the time of this writing, the base price for the model we wanted is now $50,000 more than it was in February. That’s before the price of the lot is factored in and before any customization, which push the price even higher.
One reason for the limited availability in Colorado is that so many people are moving there, and everyone wants views of the mountains.
It’s Definitely a Seller’s Market
If you’re selling a home right now, things are great – home values are up due to limited supply and sellers are getting many more offers than usual. If you’re a buyer, this is terrible news.
Potential buyers are sometimes offering hundreds of thousands of dollars above the asking price of a home and offering to waive inspections, only to have their offers declined. Buyers are losing out to cash offers or in insanely competitive bidding wars. Because of demand, 50 percent of the homes sold in July were on the market for 17 days or fewer, the National Association of Realtors (NAR) reported.
Limited housing supply is due to many reasons, including supply chain disruption, the increased price of lumber, housing regulations, lack of labor, and demand going up as more people realize they can move and work remotely. Another widely reported issue with the market comes from large businesses buying properties to rent and pushing out buyers with more modest budgets.
NAR also noted that year-over-year median housing prices have seen an increase every month for the past nine-and-a-half years. In August 2021, the median existing-home price for all housing types (condo, single-family, etc.) was $356,700 – a 14.9 percent increase from August 2020.
As one can imagine, the housing market is worst in popular metro markets. Some of the most popular places to move – determined by those with the biggest year-over-year increase in median home prices – are Austin, Texas; Las Vegas, Nevada; and Tampa, Florida. Another way to view the popularity of a city is how many days an available home stayed on the market. Cities that saw the biggest decline in days spent on the market were Miami, Florida; Raleigh, North Carolina; and Jacksonville, Florida.
Year-over-year sales are dropping, however, which could be an indicator that the market is starting to correct. It could also mean that many potential buyers stopped looking for homes out of frustration.
We Tried Heading East
By the start of summer, we realized Colorado was going to be too expensive by the time homes were available, so we decided to look elsewhere. Florida was next, but we ran into the same issue. Next, we tried North Carolina, and things started to look the same. We went through two realtors in two separate areas (including one that covered some of South Carolina as well), before finding a third realtor in a different part of the state.
Then we discovered what appears to be the only neighborhood in those three states where we could pick our lot right now, choose our floor plan, and customize our home. We signed a contract back in June, and already the base price for the model we selected has increased $60,000 (luckily, we had already locked in the lower price). Now we’re dealing with the delays on new home builds that you may have read about.
On October 4, we finally received an update from our original dream home builder. Lots still aren’t available, and we can’t sign a contract, but if we responded quickly enough to the email and met certain standards, we could be moved from the waiting list to the reserved list.
At some point in the future, those who made it to the reserved list will be contacted when lots are about to be released. They would then have to quickly respond to schedule an appointment with the sales team, otherwise the sellers will move on to the next person in line.
Many of the builders we reached out to aren’t even allowing buyers to semi-customize their homes anymore. Instead, they’re choosing the floorplan, lot, and features and then releasing them to the waiting list, which could be hundreds of people long. We’ve seen several builders release four or five homes at a time this way, which of course leads to a massive bidding war.
I realize every day how lucky we were to find the community that we did, but for others looking to buy, be prepared for frustration, whether you’re buying an existing home or building a new one.