I’m interested in buying a starter home in the next few years.
In my area, there are several large-scale home building operations in which a builder comes into an area, buys a zillion acres of land and puts as many homes on the site as possible as soon as possible.
The houses look nice enough, are brand new, and affordable. I’ve heard though that the construction is shody and the homes actually depreciate in value in a very short time.
Is buying into a neighborhood like this a good idea for the money? Or am I just buying trouble?
I’d like any first-hand accounts if possible. Thanks Dopers!
Are these spec houses or custom-built (for some small value of custom)?
The lots are usually smaller than the houses should have, because people want big houses, and the developer wants lots of houses, and those two things just don’t go together.
Yeah, these are decent-sized homes on quarter acre lots, so the houses are close to touching each other on the sides, with a small front and back lawn.
As far as custom vs. spec, I’m not really sure. You can go into a model and say “I want that kind of banister”, or “I like this type of kitchen…”. So I don’t know what that would qualify as.
I just want to know if anyone Dopers out there have any light to shed on the aforementioned suspicions I have.
The market has been insane for the last several years and houses, regardless of quality, are appreciating in value by around $1000 per month. You should check the state of your local housing market and look for trends in both new houses and older places.
I spent a number of years in the renovation business and I can tell you without exception that the worst built houses were the ones built during boom years when manufacturers were more concerned with volume than quality. We found walls 5-8 inches out of square, shoddy drywall work, entire exterior walls that hadn’t been insulated, etc… Where new housing is concerned, I’d be very cautious about choosing a builder with a top-notch reputation, and maybe plan to spend a few thousand extra for a better job.
My dad found the same thing in our area during his 25-year remodeling career. Our local pre-fab or “panelized building” corporation is Barden Homes, which I believe has dealers in your area also. I wouldn’t recommend buying from them, despite all their propaganda about how they build quality homes. Incidentally, I worked for the Barden Corporation for a few months, and resisted their brainwashing about how they are better than “stick built” houses. Also, some of the plant workers that put together trusses and such graduated from my high school and were not known for their intelligence or attention to detail.
I’m sure there are going to be a wide variety of opinions regarding this issue from a variety of different professions.
My years as a cable technician gave me a lot of insight on where the well-built homes are located locally. Furthermore, an excellent point has already been made that homes built during “boom years” are usually lower quality. However, this is not always the case.
We have several different “mass-builders” in town, but there are three that do the most business. The first I associate with the big houses/small lots. They sell good-sized homes at very low prices. My old adage goes: you get what you pay for. Stay away from a deal that sounds too good. The second company is one I associate with the “get-what-you-pay-for” ideology. Their houses cost a bit more, but are still reasonably affordable (depending on the size of the home). These are generally the large lots of homes that all tend to look alike, but have generous lawns. If one is willing to put the work in to improve/maintain this sort of home, it is money well spent. The third group is the one I associate the most with quality. They usually sell smaller homes (to keep them affordable), but they put the time in to make sure that the home will not fall apart. They build a lot of duplexes as well. In fact, I’m looking at buying a half-a-duplex made by this contractor simply because I have seen their work.
Most of the other homes in this area are either independent contractors or upper-class housing developments where a single contractor works for several years building homes in one area (instead of all the homes popping up in a year or two).
Thanks for the corroboration, beegirl13. I’ve seen top-notch work in houses that were 50 years old, and crap in houses built with high-tech tools and modern building practices.
Again, I recommend you exercise caution in selecting a builder. I might also suggest you pay close attention to the insulation. IIRC, you do have winter in Ohio, so drafts in spots where corners were cut are not a good thing.
I’m an urban planner, so I’m not really a building expert. However, I did some building inspection duties as part of my previous job, in a community where houses were built by mom & pops, large regional builders, large national builders, and even a builder from the UK who wanted in on the hot Florida housing boom.
I’ve found that it’s not so much the builder that matters, but rather the subcontractors. Very, very few builders actually build their own houses; they contract all the work out. The builders that have been around the longest typically employ subcontactors that produce quality work. No builder wants to deal with the hassle that comes with post-occupancy repairs, arbitration, and so on, so if a problem keeps popping up in a certain area, they’ll fire the sub.
If the builder is national, find out whether they’ve done projects in areas with similar housing styles as what’s found in your area. Straight Dope Homes might dominate the Las Vegas market, for instance, but have they made adequate provisions in their spec plans for houses in … oh, Chicago, where they have basements? Orlando, where homes are built with concrete block? Miami, where homes are built to more stringent hurricane resistance specs than Orlando? Dallas, where almost every house has a brick veneer surface? Albuquerque, where homes have flat roofs?
After a few years, people forget who built the homes; only occasionally will you see an ad for a resale house that names the builder, and in that case it’s usually only if the builder is prestigous or has been around for decades. Don’t worry about resale.
This is true. However, many contractors (substituted for the term “builder”) gain reputations by consistantly hiring good subcontractors. Also, some additional points need to be made.
One of the contractors I mentioned was the one that was associated with cheaply built homes. This contractor also happens to be the largest contractor in the area. About three quarters of the “sub-contractors” actually work for them. For instance…they have their own carpetors, they have their own drywallers, they have their own siders, etc. This is the sort of company I would stay away from.
But the important point is this: good sub-contractors cost money. Good sub-contractors also tend to stay in business. The best contractors are usually the ones who are best at hiring the best sub-contractors.
This is a very good point. Do they build in Fargo, ND where buildings need deep foundations, good flood prevention, and sturdy wind resistance?
**
This is debatable. All homes in my area built since some time in the late '80’s are required to display the name of the contractor as well as certain subcontractors (electrical and plumbing) somewhere near the electrical panel. This information is pertinent when discussing with a realtor what the potential value of a home is.
However, when it comes to home value, location is always more important than structural soundness.
$1000 * a month? * Is this a typo? That means the average house appreciates by $12,000 per year, which seems astoundingly high to me. Does this only apply to homes that are valued above a certain dollar amount?
My mother purchased a nice, but small, condo in Apple Valley, MN for $65,000 in 1994. She sold it for $160,000 in 2001. $95,000 in 7 years is about $13,500 a year.
I paid $158,000 for my condo in November 2001. Some people in my development are now asking as much as $215,000. Of course, they may not get any offers at that price, but if I did it would be a $57,000 appreciation in 17 months, or $3,350 / month.
My mom bought her condo in Watertown, MA, for $112,000 back in 1996. Similar units in her building are now selling for $260,000. That works out to something like $1750 per month appreciation.
I think the market has just about peaked around here, though. My fiancee and I are in the process of buying a 2 story prefab townhouse (2 bedrooms and a full bath upstairs; livingroom, kitchen, dining room, 1/2 bath downstairs; and a partially finished basement) for $235,000. It probably cost well under $100,000 when first built 11 years ago, but I have a feeling it’s not going to appreciate much more in the coming years. We’re fine with that, however, since we really like the place and the current interest rates are so low that the mortgage is dirt-cheap on it.
If you looking for quality, stay away from house’s in which the floor supports are built with pressboard. If you want a strong floor, make sure it is built with 2x12’s, not ‘I’ Beam type wood built supports. (Ex. |, Good. I, Bad.) Although for a starter house, if you’re looking to build equity and all, I suppose it’s ok.
“MN for $65,000 in 1994. She sold it for $160,000 in 2001. $95,000 in 7 years is about $13,500 a year.”
Well, sort of, you have to take that 6% real estate agent charge out first don’t you?
I think the best thing to do is to inspect the property yourself. Check cabinets to see if they use real wood or pressed wood. I’d Hire some construction guy to come out & look at it & check for plumb & such.
They want to put in a big housing complex nearby & the guy doing the project is charging $100,000 per unit for his fee. That seems pretty extensive. Is there a reason for this?
yme, I have to disagree with you here. LVL (Laminated Veneer Lumber) beams have many advantages over ordinary lumber - strength-to-weight ratio, dimensional stability, longer unsupported spans, and a few more. We’ll be using these products when we build our home. My husband and I are engineers - we’ve done a little research on building products.
Regarding the OP - we’ve had 2 houses built - one on a lot we bought and one in a development. Neither were high end and both had out-of-square issues, poor drywall and exterior finishing, and assorted other quality problems. But higher price doesn’t necessarily mean anything. Friends of ours built a $250K+ home some years back and I wandered thru it as it was being framed. I was appalled at the poor quality of building practices, to say nothing of the subs not following the plans correctly.
“Many of the advantages that engineered wood I-beams offer contractors are also applicable to the theatre. (1) They are lighter in weight for a given span or load capacity, which makes them easier to lift into place and install. Two men can easily lift and install a 24-foot I-beam which also makes the work safer. ( 2) They are more rigid than dimensional construction lumber of the same size, resulting in longer spans and wider spacing between joists. ( 3) They are constructed from carefully graded and closely inspected materials to be highly consistent from piece to piece. Since I-beams are truer and straighter than sawn lumber, there is no need to examine a stack of lumber to select the best pieces. (4) They are manufactured in lengths and heights far beyond the range of dimensional lumber. consequently. they can be used in buildings which require open spans of 20 to 40 feet. (5) Each I-beam is cut to a specified length at the yard so there is less labor on site and less waste. ( 6) Wooden I-beams do not require blocking or bridging so they are faster to install and save on labor costs.”
I see on preview that FairyChatMom beat me to it, but I’ll post anyway for the cite.
