Looking back to 2007 it’s now clear that a cottage industry of home builders overbuilt the market for new single-family homes in the $1 million and up range. Prices collapsed for a while, and speculative new construction – homes built without a buyer in hand – came to a virtual halt.
We’re now seeing a flurry of newly-built single-family homes in the North Shore communities. Some of them have the advantage of being built on land acquired at half the price at which teardown homes were selling 5 years ago, enabling them to be price competitive with resales of newer and older homes.
Many new construction homes aren’t listed in the Multiple Listing Service until they’re ready for occupancy, or just before that time. The builder will have locked in all of the materials and finishes and a buyer’s customization options will be limited – if any. The builder will also have locked in a cost structure that includes marketing costs that generally exceed 5% of the selling price of the home.
What’s your best strategy if you’re looking to buy new on the North Shore and want some say in the selection of your home’s finishes and a shot at negotiating the best price?
If you have a particular area in mind, drive the streets looking for homes that are currently under construction. On a recent visit to a small part of Wilmette I found five, including the home pictured above. Site signage in most North Shore communities identifies the builder and the builder’s contact info.
Scan the web for builders who have been and are active in the North Shore communities. You’ll find lists of homes marketed directly by the builder in a number of cases. Keep in mind that many smaller builders don’t have a website.
If you don’t have time to conduct your own searches, look for a real estate agent who has experience with new construction and has client relationships with builders. This may prove to be your best bet, since some of the top-tier North Shore agents become aware of new construction properties even before a builder is applying for a teardown permit on a property.
What approach you take will, of course, depend on your time frame for your purchase.