The lure of contemporary floor plans, custom finishes and upscale amenities drew Chicagoans to new construction in record numbers in the early 2000s. Now, as the market stabilizes, new construction has become attractive once again. In fact, today might be the best opportunity to invest in a new home for years to come. Here's why:
Below Replacement Cost - While land has gotten significantly less expensive, labor and material costs have not come down proportionately. That means many developers simply cannot build the homes they are selling today for the prices at which they're being offered.
See Before You Buy - Traditionally, one of the biggest obstacles to purchasing new construction was buying from a floor plan. However, almost all new homes on the market today are completed. That means buyers can see room sizes, touch finishes and experience views before making a decision – a luxury that wasn't available at the height of the market.
Locked and Low - Another obstacle that has been removed is interest-rate uncertainty. Buying new construction used to mean rolling the dice on where rates would be when your home was finished six to 18 months after you signed a contract. With today's move-in-ready inventory, buyers are virtually assured the lowest rates in history.
Tax Credit - The Federal Homebuyer Tax Credit (up to $8,000 for first-time buyers and up to $6,500 for move-up buyers) is available for new-home purchases as well as re-sales. With the April 30 contract deadline approaching, builder inventory gives new-construction buyers some added flexibility.
Cycling Out - Believe it or not, if you like the idea of owning a brand new condominium in downtown Chicago, the window of opportunity is closing. While 3,400 new condos were delivered downtown in 2009, only 1,200 will be finished this year. In 2011, less than 300 new condos are slated for delivery, and no new condominium deliveries are scheduled for 2012 or beyond.*
Buying or selling, new or existing, I'm here to help with all of your real estate needs. Contact me anytime, and please remember that I always appreciate your referrals.
*Source: Appraisal Research Counselors Downtown Benchmark Report
