The Gem City and its surrounding suburbs are absolutely booming right now with growth! If it’s time for your family to find a new home, there are so many options out there. And, with all of the new construction neighborhoods going up in the greater Dayton area, determining whether to build your next home or purchase one already on the market can feel a bit confusing.
Which will give your family the best quality of life and be a better investment?
When we moved here over three years ago, it was a question that we struggled with, especially tasked with having to do this sight unseen from overseas. Here are some of the things we learned through our home-building process, and some of the things I wish we had considered prior to making our decision!
(Full disclosure – I worked as a new home sales agent for a nationwide builder for a couple of years, but I am NOT a real estate agent. These are just my insights from having gone through the process, both as a sales agent and as a buyer.)
1) Does the home you are shopping for exist in the current market? – We were specifically looking for a 4 bedroom home plus an office as my husband would be working from home on his PhD. We worked with a real estate agent to see what the current inventory offered, and determined that it was fairly limited in the areas that were important to us. This was what initially spurred us to look at new construction because the option to build offered us flexibility on floor plans. Had there been more options that fit our family for sale, we would have had a harder time pulling the trigger on building a home.
2) Are housing prices comparable between new builds and existing homes in the areas you’re looking at? – When we looked at the current homes that were on the market that had most items on our wish list, we realized that they were priced at or above what we could build our own home for. In fact, we would have needed to do a bit of updating in the older homes that would have cost money out of pocket that we couldn’t roll into a mortgage – clean carpets, a new roof, and an updated water heater don’t come cheap!
3) How long will you be living in this home, and what stage of construction is the neighborhood in? – Some new construction neighborhoods have a build-out time projection of 5-7 years and will offer enticing “introductory” or “Phase I” pricing; others are in their final phases and will be wrapping up within a year with “last chance” specials. If you’re only planning on being in the home for 3 years before needing to sell, buying in a neighborhood that will still be building means that you’ll be competing with the new construction sales team and you probably won’t make much of a return on your investment, if any. However, if you plan to build early in a neighborhood’s development and then can sit tight in your home until well after the neighborhood is complete, there’s potential for major equity in your home!
4) Have you considered what the new build will cost you plus all of the extra hidden costs of new construction? – While upfront the purchase price of a new construction home might look lower than existing real estate, there are a number of things you will need to purchase with a new home that might be lower priority with an established home. I’m not talking about the builder upgrades offered with a home, though when you walk through a model home, know that there are probably $100K worth of upgrades to the base model. I’m talking fences, backyard access via a deck or patio (if you have a pet that NEEDS to go out multiple times a day), window treatments of some sort so you aren’t mooning your neighbor after every shower, overhead lighting or ceiling fans, a water softener system (depending on where you live; I’m looking at you, Xenia)… These were just some of the things we needed to drop money on within the first couple of months of purchasing our home. Every family is different, so our must-do list has things not applicable to everyone, but the cost of things you might need right away can really add up, so consider it when you think about your overall real estate investment to make a better-informed decision.
5) What is important to you in a neighborhood? – This is the area where I feel like we didn’t make the best choice, and also where it’s the biggest gamble with a new build. No matter what the sales team promises, you never know for sure how new construction neighborhoods will turn out, unlike an existing neighborhood where there are far fewer surprises. When we were looking at the location of our new neighborhood online, it appeared that there would be a park less than a quarter-mile away, lots of sidewalks connecting to other neighborhoods so I could safely run long distances, a new elementary school just a 5-minute drive away, and our sales team assured us that the road we were backing up to was a quiet country road.
These were all big selling features of the location to us, and we were hugely disappointed that the listed “park” is actually a soccer field that hosts busy tournaments in the summer and has no playground equipment for our young kids, our small neighborhood will never connect with another neighborhood as previously planned, and that quiet country road? It’s a 50-mile an hour highway that is noisy and busy at all hours of the day. In an added twist, because of all the new construction in the area, my kids may no longer be attending that closeby school and, instead, be shuttled 20 minutes to the other side of the district. Now, some of this could have been avoided if we’d be able to drive over and take a look around, but we were living overseas and had to rely on others to help us with this decision. But sometimes, things just don’t work themselves out until the neighborhood has been finished – like realistic HOA dues (most builders subsidize them while under construction to keep them low) or tax assessments!
There are, of course, so many other aspects that go into choosing the right home for your family. These are just a few that played the biggest factors in our decision. When we consider if we made the right choice for us, the answer is: we made the best choice we could have given the information we had available to us, and that’s truly the most we could have done. We love our neighbors, and our home fits us well for this stage in life. It’s safe, it kept us warm during a certain polar vortex last year, and when spring finally arrives, our kids can get back in the yard they love. Whether you buy a home on the market or build a new one, those are the things that really matter.
