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Remodeling is in
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By Justin Hunter
The days of having a home custom built are definitely
slowing and may be ending in the not too distant future.
Especially as overall home prices have escalated over
the last several years, it may be wiser in saving time
and money by passing on a custom built home to instead
do a complete
remodeling of your existing home.
Realty Times columnist, Broderick Perkins explains in
further detail why remodeling is threatening the custom
home industry, in his article, “Remodeling Replacing
Custom Homes,” which was posted November 10, 2005.
“Custom
homes are high-end homes. High-end homes are high-priced
homes. Resale or new, sales of homes with the highest
prices are the first to choke when the air gets a little
thin and starts to seep out of the bubble.”
Current homeowners are wising up a little and discovering
that they can save time and money, while staying in their
comfortable home by remodeling. But the type of remodeling
we are discussing is not just adding a new border around
the bathtub, this is complete “Wow, is this still
our house!” remodeling.
Although the housing
market has since peaked since the time this article
was written, it took about 10 months until prices began
to drop and they have dropped less than 2.0 percent.
Custom home builders, like Toll Brothers (“America’s
Luxury Home Builder”), are experiencing lower than
anticipated production levels. At the end of 2005, Toll
brother were cutting back on escalated projections for
2006.
According to the August 9, 2006 article, “Builder:
Oversupply slump worst in 40 years,” posted on CNN
Money, “Toll Brothers said the current slump in
residential construction is unlike any it has seen in
40 years as it became the latest to warn of a glut in
new homes for sale and a slowdown in the closely watched
real estate
market.”
“The Pennsylvania-based
builder said it expects to deliver 2,500 to 2,800 homes
in the current quarter, a cut of at least 14 percent from
its previous guidance of 2,900 to 3,300. And the company
announced signed contracts in the just completed quarter
plunged 45 percent to $1.05 billion from a record of $1.92
billion a year earlier.”
Toll Brothers is just the face for virtually every custom
home builder in the U.S. Home developers in general are
offering greatly reduced prices and other incentives just
to generate interest of a sale. Luxury, custom home builders
are feeling the affects of the weak market even more,
with a gloomy outlook for 2007.
Getting back to remodeling your home, although construction
prices have increased, unless you plan on completely demolishing
the exterior of the home, you will stand to save thousands
of dollars.
Home builders’ worst fears have been realized for
several months now, but it is shaping up to swing in the
buyer’s
favor. This could be beneficial in a few more months
as people who originally were going to remodel decide
to just start over with a new luxury home since prices
are lower. |
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