By Hinsdale Magazine staff
In this unprecedented, volatile housing market, it continues to be difficult to make the best decisions for either building or remodeling. Because so much is at stake that will be life changing, extremely expensive and time consuming to completion, you want to make the smartest best decisions. Couple those concerns with positives such as interest rates continue to be low, homes are still selling at a rapid clip, and just in the last few weeks, at last, lumber prices are dropping as mills pick up the production slack. What to do now, as we get out from under the pandemic, and we soon will be heading into 2022? What is your best direction?
Build or remodel?
Among others, you can turn to real estate agents who have their finger on the pulse of what is selling now. You can turn to lenders who have insights into trends in rates. And, you can turn to builders, who are facing all these issues, and interact with all the players in the housing market. It may be smart to talk to all three types of experts in the housing market. When it comes to builders, you may want to consider Marcin Kawa, owner of MK Construction that he founded nearly two decades ago.
Here are a couple of his key observations.
1. “I try to stay on top of trends in new home construction and remodeling markets. For example, in an article by Robert Hughes, American Institute for Economic Research, June 21, quoting Refinity Data stream, let me quote you: ‘Sales of new single family homes fell sharply in May, decreasing 5.9 percent to 769,000 at a seasonally-adjusted annual rate from a 817,000 pace in April. Weakness over the last few months in sales of new single-family homes is consistent with signs of slowing in the market for existing single-family homes as well. Nevertheless, sales are still up substantially vs. a year ago for both.’In my opinion, the record high prices are a key factor in slowing sales and helping to push up inventory of both existing homes and new home construction. If you are trying to sell your single family home, that means there is more competition which is reducing the rate of price increases. Those high prices have also driven some people out of the market for the time being. I see a moderation of the rush out of dense urban areas like Chicago, where we build, to the suburbs. The slight slowing in sales is also due to the recent slight increases in mortgage rates. But some people see those rising interest rates and say maybe I need to act now.
2. I also pay very close attention to the costs of construction. There has been a lot of talk over the past several months that the price of lumber has made new construction and remodeling so expensive that consumers and builders are holding off. However in just the past few weeks, believe it or not, lumber prices have started to come down. Let me quote you from an article from the New York Times, by Matthew Phillips using data from the Commerce Department, Federal Reserve notes: ‘Lumber futures surged to unprecedented heights, peaking at more than $1,600 per thousand board feet in early May. Lumber prices in the futures market, for example, are down more than 45 percent from their peak, slipping below $1,000 for the first time in months as saw mills ramp up supplies.’ In other words, supply and demand is at work at many levels. If you want to stay up with trends, I would be glad to talk with you so you can make decisions on whether to build or remodel, and when.” Here again, from Marcin, are some of the practical pros and cons of building a new home vs. remodeling.
“There are a lot of other decisions. What kinds of cabinets, flooring, roofing, appliances, fixtures, landscaping, on and on. Then there are the inevitable “hidden costs” unless you have planned exceedingly well.”
The Pros of a New Home
There are several reasons people choose when it comes to building a new home. “First, and foremost: Appropriate customization. This assumes you have thoroughly thought through your potential future for the next 20 to 30 years, beyond the last unusual 12 months.” “You have been cooped up with your family for last year, more than ever before, so you have gotten to know everyone a little better and vice versa. You know yourself and your significant other better. You know the kids a lot better. That means you know what interests each family member has and what they don’t like. We all know how important the kitchen is in most homes. How important has the kitchen been the last 12 months? Has it become the nerve center for the family, where the meal making takes place as well as meal eating takes place? Is it a study center? When things get back to ‘normal’, will family members still want to get together as much in a central place like a kitchen?”
“Or should a dining room or dining area be the focal point? Is a lot of open space the future for a new home? Is a home office/study area a permanent requirement, or will that space go for other activities? Is the company you work for going to allow you to still work at home. Or, will you be commuting and going back to an office? Or, is your work situation going to be a hybrid of work from home and work from the office? How about your bedrooms? Is there a great desire to have not only a great bedroom suite but also a spa/ bath where you can get away and luxuriate? Separate bath for the kids? Study areas in bedrooms for the kids? Is it a family room? Or is it a tv/tv games room? Or a workout room? Or all three?. Or do you need separate rooms?” “How about not so mundane factors such as lighting and windows and landscaping? Do you like to have the outside view of a beautiful backyard, or do you want more privacy? Do you want both?” “Are you big into outdoor play and entertaining, inside and around the home? What kind and what size patio would you like to have in the future? How important is “grilling” to you? How about the location of outdoor entertaining relative to the kitchen? How about the garage? Besides the cars, has it become the mud room, back-pack room, and outdoor play equipment room? Should it?”
“The last 12 months have been a stress test, not only for the family, but the home you are living in. You’ve learned a lot about your home and how it has survived … or not. This not only includes the home itself, but all your furnishings and appliances. How have they performed? It is all part of an experience you can use to your advantage in thinking through your customization for a new home. Now you know better which appliances to buy.” “Obviously, those who want new vs. remodel have concluded that new is the better answer.” “Besides newer, more energy-efficient appliances, there will be newer, better materials for flooring, cabinets, more modern fixtures and furnishings, and decorating schemes, just to your liking because you are installing just what you like.” To sum it up, there is real excitement and expectation that comes with new and better! And last, but not least, you can cross house tours and the stress for competing for a home, off your list.
How About The Cons of New Construction?
“First of all, when you decide on a new home, statistics from the Census Bureau and the National Association of Home Builders indicates that the sales cost of a new home vs. an existing home will continue to be tens of thousands of dollars more. That just makes sense, if only from the standpoint that new housing is using materials that cost more than when existing homes were built. “Not only that, National Association of Home Builders statistics indicate the physical construction of a new home can take an average of 7 months from start to finish, and that doesn’t include planning and approval stages. That length of time could also involve arrangements in selling where you currently live, and the potential of having to rent.”
“In addition, you might not have the “wiggle room” to negotiate on price on a new home vs. an existing home. On top of all that, there is the continual inconvenience of visiting and revisiting a home in progress…not always the neatest experience. And there are lots of decisions to be made along the way. Where to find a lot…which is becoming scarcer and scarcer here is the western suburbs, in a location you like. Then there is actual design of the home. What square footage will you need for the next 20-30 years and will you be able to afford it? Or do you plan for the future, in stages?”
“There are a lot of other decisions. What kinds of cabinets, flooring, roofing, appliances, fixtures, landscaping, on and on. Then there are the inevitable “hidden costs” unless you have planned exceedingly well.” “Do you know or can you get referrals for a designer, architect? How about a lender? Do you know a realtor you can trust?” “Then there is finding a builder you can trust. MK Construction and Builders is renowned for building excellent housing and is recommended by architects and designers.” “We pride ourselves in providing the finest construction techniques and the finest building materials, no matter the project. We also pride ourselves in our willingness to listen closely to our customers and then work with them to realize their dreams. We are very price competitive on a comparable basis. Please go to our website to see the testimonials.” “We also always have spec homes where customers can actually see some of our homes for the quality of design, construction and materials.” Marcin concludes, “Of course, in the end, you decide on whether to build a new home or remodel. Don’t let anyone talk you into something you don’t really want.”
For more, please go to mkconstructioninc.net or call 773-817-1861.
*Photos provided by MK Construction