Custom Home in Vienna VA
Not all custom builders in Vienna follow the same business model.
Most builders buy lots and then figure out a model to put on it. At that point they can determine a target asking price factoring in lot acquisition, business expenses, and construction costs.
Home construction still requires exceptional project management experience to coordinate everything from digging the foundation to applying the finish coat of poly on the hardwood floor.
- One builder mindset is to design and start a tear down or infill home before advertising the home for sale. A “spec” home. Then they can plan out the timeline, establish a certain level of quality, and limit any unexpected design changes. This strategy manages expenses and allows the builder to set precise target dates over the 10-month building process.
- Another builder mindset is to post a sign in the yard and wait for a buyer to materialize, agree on a design, and then agree to a contract. For most home buyers, this scenario is the most grueling because so many decisions need to be made, and waiting 12 to 16-months for delivery will be stressful.
- The final builder mindset is building custom homes only on lots already owned by their customers. These are not “spec homes”, but true custom-builds. For most Vienna home buyers, this scenario is out of reach for a variety of reasons, including the time involved and significant additional expense.
The spikes in the chart below follow factors of builders using all of these mindsets. In an effort to catch the spring market, builders will list their spec homes hoping to land a customer. If a buyer doesn’t materialize, then the builder will remove the listing and start building the house.
Vienna’s rebuilding boom
The Town of Vienna has enjoyed a rebuilding boom for years that is the envy of many communities across the country. With over 100 building permits issued and older properties being sold to builders to establish a pipeline of tear down and infill houses, Vienna is certainly being transformed.
A downside of that transformation is the elimination of single family homes below $600,000 which has been at the core of residential homes.
An upside is a significant increase in real estate values which has created real wealth for those homeowners heading into retirement.
For a real example, many homes that would have sold for $450,000 just three years ago will likely command $600,000 today. That 30% gain can go toward buying a property across the country, further fueling economic growth across the national economy.
Where are tear down and infill homes?
Our custom, new home market is a challenge to understand for the average web-surfing home shopper who has set up search criteria on multiple real estate portals like Zillow, Trulia, or Redfin.
These new homes can hit those apps in bunches… like a big set of waves (I have been on vacation) after waiting months seeing nothing of truly “new”.
I specifically included only data from a price range where new homes are priced to demonstrate the fluctuations in “active” listings.
What happens in those down-months? More about that later…
What is important for web-surfers to understand is the definition of “active” in the data results. New homes are “active” when a builder hires a Realtor who add the home into the MRIS database. And the MRIS database is the trunk, core, or main line for your apps that you have become addicted to.
One lesson many builders have noticed over the last five years (when real estate websites became much more 2.0) is that home shoppers track days-on-market and will likely shy away from homes that appear to be sitting on the market for 100 days. Their assumption is that something is wrong with the house and they won’t want to buy a reject.
It is an incorrect assumption.
Until recently, most builders listed a home before they started digging the foundation. And at 100 days, well the foundation may have just been poured!
To prevent this inaccurate tracking, most small custom builders have reverted back to old-school marketing using a sheet of paper or including an address on their web site.
Many of my clients have run the custom builder gauntlet prior to deciding to work with me because they don’t have the time anymore to wait for builder call-backs or drive around town hunting down coming-soon signs. And, many have been burned by builders who have pitted them against other buyers in auction style bidding wars.
These are good people who are burned out! If that sounds familiar, then we should talk.
When is the best time to buy infill homes?
Timing is critical, but you need to buy a home on a good lot.
Some builders don’t seem to care about lots as much as you should. The long term value of a home is influenced by location, lot size, and light exposure. You can gut an outdated kitchen, bathroom, or living room, but my other top value influencers are fixed positions in space.
In my opinion, the Fall is historically the best season to buy infill homes. One reason is that there isn’t as much pressure on the market, builders seem to have more time to talk, and some of the best lots pop up for sale. But custom homes sell here all year during every season.
The best strategy that I recommend to my clients is to be prepared and be patient. Essential elements of preparation is understanding your location needs, preferred house orientation, and what you are willingness to compromise. Understand your ideal scenario, be prepared to act, but also be willing to wait if the house doesn’t fit the bill.
Vienna’s new home market will be active for years as the region’s economy expends and population grows. There are always homes on the market that you can’t see on those national real estate portals, and understanding the type of builder you will be working with or the advantages of one part of town over another will determine the long-term value of the home you will eventually call home.
