The real estate community has contended for decades that real estate is all about “location, location, location” – but what may be paradise to some buyers may look like purgatory to another just because each one may have a different idea of which attributes are paramount to their idea of “home,” no matter how great a location may be.
Residential developers do a LOT of homework before they buy tracts of land upon which to develop master-planned and other types of neighborhoods.
They get geological reports to see if the area is an environmentally good investment they check with the local city and county planners’ offices to see what the future of a particular area may offer in terms of utilities, roads and access to commercial and retails businesses.
Then they look at population growth trends – demographics that tell them the types of buyers, which age groups and what income levels they can target.
They also look at local industry and see where the most likely job bases are so that they may be able to draw potential buyers from them.
After all of that – plus a lot more research – homebuilders begin to design “product.” If they take seriously all the demography they just paid for, the floor plans they come up with will reflect that what consumers within that demography look for in both lifestyle and housing designs.
Even if all that research doesn’t hit its mark, however, builders somehow count on finding a driver for every seat – or eventually a buyer for every house. How stable the value remains on the home you buy may be may depend a lot upon location. No matter whether the location is stellar or mediocre; in the end you must imagine yourself waking up there every morning. It’s a good idea to drive through more than one neighborhood a given homebuilder has built, especially if you are a first-time homebuyer. Neighborhoods occupied by owners that care about equity and appraisal values will naturally show pride of ownership by the way they keep their homes’ exteriors and landscaping.
The first item to keep in mind when considering new home areas is budget. It doesn’t really matter how much of a magnet new homes are in a certain area if they’re out of your price range, which should be pre-determined by your mortgage professional. (You can use a wealth of online mortgage calculators just to get an idea.)
In general, builders scrutinize values and pricing as being affected by:
the proximity to employment centers, schools, commercial and retail (too close to some is bad, too far from others can be equally detrimental)
other home values that have been already established
initial land costs, labor and materials costs
New home values and their locations can sometimes “set the pace” in a given area, whether they are rapidly appreciating or builders are minimizing loss in a challenging market. Hopefully, however, even in a market where builders are offering the moon to homebuyers, you’ll end up in the home you love and not just a home from a builder offering the largest incentives.
Dena Kouremetis is a veteran freelance real estate consumer journalist and California real estate broker. She may be reached by email at REritr@aol.com.
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