If you’re in the market a new home, you’ve probably heard the myths about new construction. But before you trust generalities, consider these observations from John Wozniak, president of Chicago home builder J. Lawrence Homes.
1. It is cheaper to rent than buy a new-construction home.
Not true, says Wozniak. Quality rentals are at their peak price points and have been rising steadily. It’s actually less expensive to buy than rent in the Chicago area right now. And most builders are happy to work with buyers to find new construction financing options that facilitate a monthly payment that works for them.
2. It is cheaper to buy a used home than a newly-built one.
Not so. While the scenario does vary from case to case, in general, a newly-built home with brand new carpeting, appliances, wiring, plumbing, furnace, etc. is usually the better value. Buyers move right in rather than fixing existing problems and upgrading fixtures. And, unlike a resale home, all J. Lawrence Homes come with a two-year warranty on all mechanical components and a 10-year warranty on the structural elements.”
3. It will be better to wait until next year.
No one can predict when prices will start to rebound, but data shows we’ve been skirting along at the bottom here for more than a year, so Wozniak predicts that prices will start to rise in the next 12 months. When prices start to rise, there’ll be very little supply to meet that demand, which could drive prices up even more. Buyers who act today will find a good variety of new home inventory at a historically low interest rate.
4. It is impossible to get financing.
While credit certainly is tighter than it was a few years ago many buyers think they won’t be able to get a loan without 20 percent down and great credit, but that is simply not the case. Builders like J. Lawrence Homes have relationships with various financial institutions and we are able to work with lenders and buyers to find a mortgage, monthly payment and down payment that is good for everyone – even if your credit isn’t perfect.”
J. Lawrence Homes’ CEO Jim Chittaro adds, “Over the next several months, banks and lending institutions will be given a clearer idea of how the industry will be regulated in the future, which will make it easier for those banks and lenders to know how much they can lend and to whom. This will make credit much more available to a wider range of people than what we’ve seen in recent years.”
5. New-construction homes take too long to build.
In reality, buyers can move into a new-construction home in as little as 30 to 45 days.
The general assumption seems to be that it will take at least nine months to build a new home, but builders like J. Lawrence Homes always have a selection of immediate-delivery homes ready that are either complete or nearly complete. They’re finished with the most desirable options, but we can be changed per buyers’ request so the new home is uniquely theirs.
Ground-up construction can be completed in as little as four months, which allows buyers to completely customize their new home, while having time to sell their current home.
Wozniak’s biggest piece of advice for buyers looking for a new home this spring is this: ask questions. The market isn’t the same as it was five years ago or even one year ago, and the J. Lawrence will be more than happy to help you make the right home-buying choice.
J. Lawrence is currently building homes in seven Chicagoland communities, with base prices ranging from $169,000 to $339,900.