When it comes time to purchase a vacation home, a retirement property or your new Sarasota dream house, you have several options available to you. The two most popular options are buying a resale home or building a new custom home. Many people wonder – how does the current state of the real estate market affect my decision making when it comes to procuring a new home?
Although there are many considerations which go into your choice for a home, the real estate market may make your choice easier.
Which Real Estate Market is Best for New Homes?
When the Market is Up: When the Sarasota real estate market is hot and properties are selling easily, this is known as a “seller’s market”. The term refers to the fact that the seller has the upper hand in negotiations. Simply put, a seller is generally not motivated to give concessions or lower the price if there is a steady supply of possible home buyers. In these cases, home buyers are often forced to choose a home that may not meet all of their specifications, settling for something “less than” they wanted due to the higher cost of home acquisition and the competition for available properties.
In these markets, building a custom home may be a great option. Your dollars can be used to construct a home which has the features you desire, and the floorplan which works for you. While these considerations are always important, they may be even more so when the real estate market offers less than desirable options for homebuyers. If you cant find what you want within your budget, call a local home builder to discuss your new construction options.
When the Market is Down: Conversely, when the real estate market slows down, a “buyer’s market” is the typical result. Under these conditions, buyers have much more leverage to negotiate price or to purchase “more home” for their money. This provides a wonderful opportunity for homebuyers to find the perfect location for their new home. Because the Sarasota and Longboat Key markets offer few available lots, a down market allows buyers to purchase a more affordable home on their dream lot. After doing so, they can either renovate the home to their liking, or demolish the older house and build a new custom home. Because some of our most desirable neighborhoods have no vacant lots, a down market offers a rare opportunity to achieve “location, location, location.”
Here’s a Hint: In a down real estate market, buy an older home on your perfect lot. If you are not ready to move to the area just yet, rent it out for a few years for income and to save the money you’ll need to build. You can then construct your new custom home when you are ready.
Should You Worry About Resale?
When renovating or building a custom home, should you worry about the resale value in the current real estate market? Unless you are planning on flipping the property, the answer is “No”. The real estate market is always in flux, and there is no guarantee that your home will be more valuable (or less valuable) when the time comes to sell. While you can design a home to be more marketable no matter the market, building a dream home is often more about having the home of your dreams – and less about what you will make when you sell it.
No matter your goals and dreams, call Lindahl Construction. We will help you to assess your options based on all the factors, and can professionally manage your renovation or new home construction – no matter the real estate market at the time.