Construciton by Tom Smith
Although most real estate professionals tend to quote home values based strictly upon the living area square footage of a home, this is at best an “average” valuation that doesn’t take into consideration many factors in a home. Is a home elevated per FEMA requirements, how many bathrooms, age of the home, and especially all the additional square footage of roofedarea for porches, garages, verandas, etc., are all factors that have to be considered in order to obtain an accurate home value.
With that in mind, how does an informed customer determine a realistic value for a particular home? Equally important, how does a prospective home buyer accurately determine the increased cost of a new home in Pinellas from last year, this year, or a possible future cost should they decide to wait 12-24 months to build their dream home? There are in fact statistics that we see in the Sunday newspapers stating inflationary costs, and these prove to be somewhat accurate based upon the “average” living area square footage. However, what is a realistic and true cost increase for a new home today?
I’m glad you asked! Being the only builder with a model home along the beaches in Pinellas, for the exact same home with the exact specifications, I am experiencing inflationary cost increases each quarter, and the reasons for these uncontrollable additional costs vary. For instance, last year new building codes went into effect, mandating new construction items. Then, “creeping inflation” is the curse in our industry, as prices escalate based upon volume and supply and demand. Government has also been a culprit, as new impact fees get passed in certain municipalities raising costs sometimes thousands of dollars per home. Try as we do, these items are not controllable by contractors.
What does this mean in dollars and cents? Doing everything I can to keep costs as low as possible for my customers, our model home has increased about 11% this past year. That’s great for those that already purchased at the lower price and are enjoying the 11% return on investment, much higher than they realize in their stock investment portfolio. It’s not so good for those that are seriously considering a new home but did not pull the trigger last year. My best “guestimate” is that our industry will experience a 6% – 9% home cost increase in 2020.
Some folks are waiting for retirement which is understandable, yet many of my customers are buying at today’s price, realizing that when the home is complete, they are one year closer to their retirement years. I realize how difficult a decision is to invest (transfer) savings into a new home investment, but remember that a new home along the Pinellas beaches will most probably offer a much higher return than today’s stock investments. And…… you end up with a beautiful new energy efficient, hurricane resistant raised home for your family to enjoy for generations to come.
In March GHD Construction Services Inc. will commence construction on a new waterfront home, with even more bells & whistles than our present model. Feel free to come by our existing model and speak with our sales team with any questions you may have for a new home.
GHD Construction Services, Inc. has constructed 6,500+ homes since 1971, and has a new model home at 239 144th Ave, Madeira Beach. If you have any questions pertaining to new home construction, feel free to email me directly at: info@ghdcsi.com, or request a meeting at our new model 727-954-8345.