Does it make economic sense to build a new, custom home?  That has been the key question the past few years for most home buyers in the greater Charlotte, NC and Lake Norman, NC markets.  The main reason was because there was and is so much inventory out there that it was hard to justify the new home price per square foot vs. existing inventory price per square foot.  On top of that, if you segment out the distressed inventory (short sale, foreclosures, REO’s, etc.), those price per square foot numbers were dropping the averages even more.   For the past few years I’ve told my clients that they were crazy to look at new construction with all the deals to be had out there.

That is until now.  I recently was out with some out of town clients looking at homes in the price range of $350k-$600k in the Lake Norman, NC area.  What we were very pleased to find out was that there were 2 or 3 home builders and developers offering to build brand new construction homes that were VERY competitive with even the distressed property pricing.  Perhaps these situations are derived from a distressed situation in itself, meaning that the developers and builders have been sitting on these lots forever and have come to realize that the only way to move the lot and get it off the books is to build on it and make a small margin on the construction.  Or, maybe they just realize its a great strategy in response to most buyer’s recent feedback in the industry on buying foreclosures.  We saw this in neighborhoods like Pebble Bay in Denver, NC and even The Point in Mooresville, NC.

What we are finding is that most buyers really can’t see past the “clean up” or “upfit” work needed in most distressed situations.  The result is a home run when they can purchase new construction for similar pricing.

Mike Moulton is President and head Broker at Bee Home Solutions, Inc. serving the greater Charlotte, NC real estate market.  704-885-0488.