In this highly competitive housing market, the persistent low inventory of existing homes has led many buyers to look to new construction as an opportunity to customize a home to their needs, without having to beat other buyers to the closing table. However, the challenge for homebuilders to meet this growing demand, without sacrificing quality, has been compounded by obstacles such as labor shortages, inflated material costs, and supply-chain delays. The result has frustrated many new construction buyers. A recent survey from Clever Real Estate revealed that roughly two-thirds of new construction buyers, “feel some form of regret about the home-building process,” and over a quarter of those surveyed said they wished they opted to buy an existing home instead.
Additional key findings from the report:
- 66% of buyers feel some form of regreg about the home-building process–including 26% who wish they had purchased an existing home indeed.
- 59% of people who built a new home felt stressed, anxious, or frustrated during the construction process.
- Home buyers’ top regrets about the home-building process include conflict over decision-making (36%), premature maintenance (36%) and overstretched budgets (35%).
- 48% of people who bought a new construction home say doing so is actually a good investment.
- 64% of respondents would buy a newly built home again.
- 32% would not recommend their builders or contractors to others–including 11% who would turn down a financial incentive for referrals, and 9% who wouldn’t recommend their builder under any circumstance.
- 85% of new construction buyers experience some type of delay, with 50% waiting three additional months or more for their homes to be completed. 35% experienced delays exceeding six months.
- 92% of new construction buyers say the process was more expensive than anticipated.
- 40% of people who built a new home during the COVID era of soaring inflation report cost increases for basic building materials.
- 88% of new home buyers wish they made different decisions during the construction process, including 39% who wish they spent more on luxury upgrades–only 30% wish they spent less on finishes.
- “Buyer beware” still applies to newly built homes, with 65% of buyers uncovering issues during their home inspections.
- 89% of buyers deal with premature repairs or maintenance after moving into their brand-new homes, including problems with major systems such as security systems (37%), plumbing (36%), and electrical systems (36%).
- During the COVID era, issues with premature maintenance have increased in nearly every category, particularly electrical systems (41%) and HVAC (38%).
The takeaway:
“In the past, the premium for buying a new single-family home could cost up to 30% more than an existing home,” according to Patric Duffy, author of the Clever report, “but that gap has narrowed dramatically during the COVID era. By December 2021, competitive market conditions drove the median sale price for a newly-built home to $377,700–just 3.7% more than the median price for an existing home on the market of $364,300.”
“Interestingly, 49% of the new construction buyers we surveyed worked with a real estate agent during the process,” says Duffy. “This suggests agents may be missing an opportunity to educate or advise their clients on the implications of buying a new construction home.”
Click here to read the full report.
