December Market Update

This is the time of the year that the children in your life are thinking about new toys, while us adults are

thinking about the New Year. Therefore, I decided this month’s article about the Craven County Real

Estate market is about new construction since 210 of the 395 homes for sale in Craven County are new

construction homes. However, most of those 210 new construction homes for sale have not started

being built yet. Realtors are still saying that inventory levels are low because of the few homes, resales

and new construction, that are currently available to be occupied in the next 30-45 days.

I was told by a local builder almost 20 years ago that there are three components that make up new

construction: Quality, Price and Square Footage. A buyer can have any two of those components they

want, but it is not possible to have all three components in a property. For example, if a buyer desires

to build a great quality house for a low price, the home will be smaller in square feet. A builder can’t put

a lot of square footage into a quality house and not charge for it. If a buyer wants a lot of square

footage and a low price, typically the quality of materials or craftsmanship will be lesser. Currently we

have new construction homes on the market in Craven County for as low as $129.43 per square foot up

to $311.15 per square foot. I believe all these newly constructed homes have a place in the market

space as people have different needs. However, the construction of homes is about like anything else

people buy in that you get what you pay for.

All new construction homes are inspected to ensure they meet code, which is basically the minimum

standard requirements enforced by a local municipality, usually the county or city where a home is

being built. If a buyer buys the most expensive or least expensive new construction home, none of them

should fall down anytime soon. It is my understanding that North Carolina does require licensed general

contractors to provide a full one-year warranty on their homes and a 10-year structural warranty.

However, the quality of materials and craftsmanship typically will not expose themselves in the first

year. Brand new almost always looks and smells nice. It is how the materials used to build hold up over

the test of time with reasonable living conditions. Normal wear and tear on a home is to be expected as

we humans, big and small, as well as our pets, can be tough on a house. If a child hangs on the kitchen

cabinet doors and swings around, they likely will not close properly and that would not be reasonable

living conditions. If the cabinet doors for no apparent reason will not fully close, that is likely a material

or craftsmanship issue. I tell sellers often that the $3/yard carpet and $30/yard all look the same the

first year when people are fixing their home up to sale. The same goes with new construction. A builder

can use any grade of materials they choose and the good, bad and ugly won’t really show up until after

the first year.

The best thing about new construction is that everything is new. The HVAC, water heater, roof and all

components of the house should not only have the builder’s warranty but include the manufacturer's

warranty. For resales, this is very rarely the case to have all major systems of the house being brand

new. New construction can also allow a buyer to customize the house to certain extents. Note, I am

talking about speculative houses for sale and not a true custom-built home where a buyer chooses every

detail of the house. In Craven County we have builders that will not allow a buyer to make any changes

to a house once they decide on the floor plan and color palette, even if the house hasn’t started being

built. We also have builders to the other extreme that will allow buyers to pick out everything from

shingle, siding, paint and cabinet color all the way to the lights, flooring and other details depending

upon the stage of the construction process. There are also builders locally here that will allow buyers to

pick out certain parts of the home, but not others. If the builder does allow changes to be made, it is

customary they will want more of a deposit to cover the personalization of the home. The deposit for

the changes helps protect the builder from a buyer who backs away from the contract after

personalizing the house through their selections. The builder wants this coverage to change the

selections back to a more neutral tone if needed.

New construction makes up 53% of all homes for sale in Craven County. Of the 210 new construction

homes for sale, 115 of them are listed in Fairfield Harbour. In most of the cases in Fairfield Harbour, the

builder doesn’t own the lot the house is for sale on, nor have they started building the home and this

can really skew the overall market data. With 53% of the homes for sale in Craven County one would

think most of the sales in Craven County this year would have been new construction. Of the 1567

homes sold in Craven County this year, only 16.5% or 259 of those homes have been new construction.

Currently there are a total of 218 properties under contract in Craven County and 83, or 38%, are new

construction. In part with new construction dominating the landscape of the local market in homes that

are for sale, homeowners in a good neighborhood with a fully updated house have a great opportunity

to still demand premium prices for their resales. Also, as a homeowner, if you see homes still being built

in your neighborhood, that is a positive as that shows there is still demand for that area and usually

helps prices continue to rise for those neighborhoods.

We are lucky in Craven County as we have some excellent builders here. I am always an advocate of

shopping locally and supporting small businesses. Our local general contractors are mostly small

businesses that employ more local small businesses in the plumbers, electricians, carpenters and others

that it takes to put a house together. We have builders in our area that build 10-20 houses a year and

we have builders in Craven County building hundreds or thousands of homes a year across the state and

country. Buyers have options on what they want their new home to be and with the diverse group of

builders here, one should be able to find what they are looking for. Just don’t be fooled that all builders

and all new construction are the same. This isn’t knocking any of the new construction locally as we

need all of it to meet the needs of buyers. A buyer should just make sure they know what they are

buying either by having the knowledge yourself or hiring a professional Realtor who can help you

discern the differences. Even with new construction, I recommend hiring an inspector as a house is built

by human hands and even the best builder can make a mistake. If you are looking to buy or sell a home

for Christmas or in the New Year and need guidance, give me a call as I know a guy that could help!

Merry Christmas, Happy Holidays and Best Wishes in the New Year from my home to yours!