Price of new construction driving up “Used” home prices

Used to be that new construction in your area held back the value of your house. The “Used” houses needed to sell for much less than a new one would. Even in a mildly appreciating market, your newer home didn’t really go up in value until that last brand new house sold. It was like the thought was “Why wouldn’t I just get a brand new one instead of buying a ‘Used’ home?” I know this is hard to believe for those of you new to the real estate market, but you used to be able to be the only offer on a completed new home and if you had time, you could pick your lot and pick your floor plan and have your house built. Today, builders like to finish the house and put it on the market to see how much they can get for it. Construction times have gone from 6-8 months to 10-12 months. Builders don’t want to be locked into a sale price where they won’t get paid for 10-12 months in inflationary times and with supply chain issues.

While an existing home will still sell for less than a brand new one in the same neighborhood, I am seeing something that hasn’t happened before. Since new construction is sooooo expensive these days, I am seeing the value of existing homes being boosted by the sticker shock of new construction homes. Yeah, the market is good and inflation is driving the prices of everything up, but prices are rising even faster than I expected in some neighborhoods with a lot of brand new homes going up, such as Masterson Station and The Home Place.

A brand new 2000 square foot home in Masterson is about $325k and the same size in The Home Place is about $440k. Now, instead of saying “Why wouldn’t I just get a brand new home instead of a used one?” buyers are saying “This existing home is a bargain compared to what the brand new homes are!

What’s it really like living in the country?

I’ve been in the sticks for almost a year now. I get asked this a lot. For the most part, it has been everything I hoped. I enjoy it. I did have some concerns before we moved, and of course there are a few things I had not thought about.

My biggest concern was getting stuck out here in the winter. I don’t know why, but for some reason ice on my street in the country bothered me more than ice on the street at my old house in a neighborhood. It was about two miles inside the neighborhood at my old house before I got to well maintained road. Well, I live about the same distance from a major state highway. Guess what? Two miles of ice is still two miles regardless of where you live. The good thing for me is that my road gets plowed and salted faster than my old neighborhood road did. My next door neighbor out here is the police chief, so I guess they want him to be able to get out easily if there is an emergency.

I was worried about crime. That is probably because having grown up in neighborhoods, the thought of nobody being close by was scary. That’s been a non-issue. Only your neighbors drive past your house unless you live on a main road and there seems to be a real strong sense of respecting the property of others out here. And for those that aren’t so respectful, they assume everybody has a gun so they don’t really want to risk getting shot at for your stuff.

There are really only two things that I didn’t think about. Neither are big deals thankfully.

The first is that most people in the country keep to themselves. My neighbors will wave to me. Several stopped and introduced themselves to me when I was new. But most of the time it is just like a neighborhood where you mostly just smile and wave. I guess small talk is harder to do at the mailbox when your houses are so far apart.

The other thing, and this one is what bothers me the most, is that there are no storm sewers. In a neighborhood, the rain water runs neatly down the curb into the storm sewer and disappears. Out in the country, the water runs down a hill, crosses the road leaving mud and gravel for daaaaaaaaays after it quits raining. This probably wouldn’t bother me if I wasn’t trying to keep my cars clean. As soon as it all dries up, here comes another rain to do it all again.

And that’s it. Other than these few things, it really isn’t that much different than I expected. Sure, I have to drive longer to get anywhere and I have a lot more grass to mow. That is totally worth it to me to get the peace, quiet, calmness and beauty that county life offers.

I love showing rural properties. Nothing like a fun drive in the country and then getting to see a house and some land. Here are the counties I work in for both rural and neighborhood properties: Fayette, Scott, Jessamine, Clark, Madison, Woodford, Bourbon, Montgomery, Franklin and Garrard Counties.

5 things I like/dislike about country living

I never thought I would live in the country. I’ve always been a neighborhood guy. I like having pizza delivered. I like not having wild animals around, especially snakes. I hate snakes. When I was a kid, I was convinced that living in the country was the surest way to be murdered since nobody was around to hear you screaming for help. Or get eaten by a wild animal. I never investigated the statistics, but I was sure that living in town was MUCH safer than living in the country.

My love of seeing trees instead of concrete, hearing nature instead of traffic and leaf blowers, feeling calmness over chaos eventually convinced me that I could only get all that in the country.

So, here are my top 5 things I like and dislike about being in the country. I hope it helps you decide if country life is for you!

THINGS I LIKE:

  1. Peace. You can’t get this type of peace anywhere else. You wake up and everything is so calm. You notice more enjoyable little things like the wind blowing through trees.
  2. Space. I used to think having a big yard was space, but there is nothing like neighbors being 500 feet or more away from you.
  3. Sunsets. I have always loved the sunset. It is even better when paired with hills and trees than your neighbor’s roof and power lines.
  4. Being alone. I am either the world’s most introverted extrovert or the world’s most extroverted introvert. Whichever it is, I really enjoy when I am home. It recharges me.
  5. Being outside. When you live in the country, you tend to think of your property as land, not a yard. I don’t know if this makes sense, but when I was in a neighborhood, I thought my house was the property and it was just on a lot. Now I have switched it and think of my property being the land on which my house just sits.

THINGS I DON’T LIKE:

  1. Gravel. It’s usually all over the road and at the end of driveways. I am too into cars to not have this bother me.
  2. Snakes. I have only seen two of them but I did find a 5 foot skin that one left…..which means it is bigger than that now.
  3. Mowing. I actually love mowing. Always have. I just don’t like that it is a half day commitment. I especially don’t like it when you are half way done and it starts raining.
  4. Mowing.
  5. Mowing.

That’s it. Overall, being in the country has been super nice. The positives far outweigh the negatives. Every house in the country I have sold, the sellers have all missed their homes. Most of them moved back into town because they were driving more than they wanted to be. It can be a little tough for those with kids who are always needing shuttled to and from band practices, sports and other events.

What do these 3 sellers have in common?

I’ve got a busy week coming up. I have 3 people who the only thing they have in common are that they have houses to sell and have picked me to be their realtor.

Two of the clients have used me before. One of them is a family member.

The house in the first block of Kenwick is owned by a person whose mother used me to sell a house in Palomar. I don’t even remember how they found me. They were great to work with. I had lost contact with the daughter. I had often thought of her since she lived in Kenwick, and I did too when I was much younger. One day out of the blue, she calls me and says she is buying and selling. She didn’t think I would remember her since it had been close to 15 years, but I couldn’t forget her. She had to do a little digging to track me down since I had gone out on my own several years ago. It has been great catching up with her and working with her on her new home. She is fun, laid back and very wise.

The house in Beaumont is owned by a very special family to me. They used me to buy the house many years ago. I thoroughly enjoyed working with them and was very excited when they told me it was time to move again. We found their perfect home within walking distance of their old home. We had quite a dramatic time buying the new place since it was in multiple offers. This family is just so nice and pleasant to work with. It has been one of the highlights of my summer to work with them again.

The house in Landowne Merrick is owned by my cousin’s family. It has served them well but it’s time to move up to something that better fits their stage in life now. I don’t get to see my cousin all that much so it has been a lot of fun to go look at houses with her and her husband. Sometimes my aunt and uncle show up to for the showings so it is like a family reunion but at some stranger’s house.

I’ve got two more listings in the pipeline that should be ready before long. It’s been a great year and an especially great summer. Selling these three houses for these three fantastic sellers will be a nice way to wrap up my summer.

Are prices going to drop?

I’m reading a lot of headlines and seeing YouTube videos about the market crashing.

Is it going to happen? Short answer is NO.

Is the market slowing down a little right now? YES. It always does this time of year. People go on vacation and those with kids like to be in their new home before school starts. I always like this time of year because I can catch my breath and enjoy a break before it picks back up a little for the rest of the year. When I go to a track and I get used to doing 120 MPH in a straight, hopping on the interstate on the way home and doing 80 feels slow. Right now we are all so used to a crazy fast market, that even a strong but not super strong seller’s market feels like a major slow down.

Are we seeing more houses come on the market right now? YES. I think this is because all the sellers who would have sold during COVID now feel it is okay to put their house on the market. We started seeing more listings hit the market after the vaccinations rolled out. This makes me think that the sudden increase in inventory hit all at once. We will see if it keeps up. Really though, I sort of hope it does. I would love to see a balanced market where there aren’t 5 offers the first day on the market for a loser house and 15 offers the first day for an HGTV worthy house. Simple economics tells us that as long as there are more buyers than sellers, that it will remain a seller’s market. As long as it is at least a balanced market, meaning supply is equal to demand, prices will remain the same.