CHICAGO, Jan. 9, 2016 – More home buyers in the seven-county metro Chicago area have been choosing new construction of late. RE/MAX estimates that purchases of newly built homes and condominiums increased 35 percent in the Chicago area during 2016.
That trend should continue in 2017, according to Jack Kreider, executive vice president and regional director of RE/MAX Northern Illinois, in part because resale homes are in short supply in many market segments across the area.
“Purchasing a new single-family home involves a markedly different set of options than buying an existing home,” Kreider said.
The major benefits of buying a new home are twofold, noted Kathy Dames, broker/owner of RE/MAX Ultimate Professionals in Plainfield and Shorewood, Ill., who has extensive experience marketing new homes for builders. “You usually have much more input into what the finished product will be like than you can have when buying an existing home, and you end up with an entirely new home, so that maintenance issues will be minimal for the first 10 years or so. On the other hand, there are issues that are unique to new construction because typically the home being purchased is not yet complete.”
One big limitation involved in buying a new home relates to location.
“Existing homes are for sale in every neighborhood, but that’s not true for new homes because vacant land is scarce in many established communities,” said Dames.
The other major issue presented by new construction is timing. Building a new home from the ground up typically takes six months or more, reports Cathy Peters of RE/MAX All Pro in Sugar Grove, Ill.
“New construction buyers with an existing home to sell can either wait to sell until the new home is ready, which can mean paying two mortgages for several months, or sell their old home sooner and find temporary housing until the new house is ready. Either choice can put buyers in an uncomfortable position, which is why it’s so important to work with a builder who has a record of delivering homes on schedule and a real estate broker who can help make the transition as seamless as possible,” Peters said.
A custom home, which gives the buyer a chance to choose every detail, is also likely to involve the longest wait, reported Jackie Wilkinson of RE/MAX Signature Homes in Hinsdale, Ill.
“With a true custom home, the time involved in picking things out is considerable. The builder needs the buyers’ input on everything from woodwork, cabinets and countertops to sinks, tubs, shower tile and paint colors. With a custom home planned from the ground up, it can be a six-month process to make all the selections and can be a bit overwhelming if you aren’t prepared,” she said.
“In the Quad Cities, most new construction buyers choose custom homes,” said Chris Taylor of RE/MAX Elite Homes, Moline, Ill. “I urge those clients to do their research on builders, then pick the one with the best reputation for quality and on-time delivery and one in whom they have confidence. Many custom builders in our market now have software that allows them to show in 3-D how various layouts and finishes will look, which makes the custom-building process much easier for buyers.”
On the opposite end of the waiting-time spectrum is the completed “spec” home ready for immediate occupancy.
“In that case, buyers don’t get to make many choices about layout or finishes, but everything will be new and the home will usually have most of the contemporary amenities that buyers want,” Wilkinson said.
Spec homes are most common in higher price brackets but often they are also a good value when compared to other types of new construction, Dames observed.
The third new construction alternative is the production builder who typically has multiple model homes on display at a subdivision.
“This is an easier route for most buyers because there are fewer choices to make, and the buyers can walk through a model home,” explained Dana Cohen of the Dana and Sadie Team at RE/MAX Suburban in Buffalo Grove, Ill. “However, buyers have to understand what is included in the basic price and what are extra cost options because that isn’t always obvious in the model. Helping buyers understand those options and decide which ones are worth the added cost is one way a broker can help achieve optimal results in a new home purchase.”
RE/MAX agents consistently rank among the most productive in the industry. In 2015, RE/MAX Northern Illinois agents averaged 18 transaction sides. RE/MAX has been the leader in the northern Illinois real estate market since 1989 and is continually growing. The RE/MAX Northern Illinois network, with headquarters in Elgin, Ill., consists of more than 2,250 sales associates and 106 independently owned and operated RE/MAX offices that provide a full range of residential and commercial brokerage services. Its mobile real estate app, available for download at www.illinoisproperty.com, provides comprehensive information about residential and commercial property for sale in the region. The northern Illinois network is part of RE/MAX, a global real estate organization with 104,000+ sales associates in 90+ nations.