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In many areas of Colorado Springs, it’s not uncommon to see new communities being developed with homes that are under construction. Compared to the Denver and Boulder real estate markets, the cost of living in Colorado Springs is considerably less, and with so many people moving into the area, the housing market is experiencing high demand with an extreme shortage of inventory. As the need for new homes in Colorado Springs continues to rise, home builders and land developers are working hard to keep up.
In the Colorado Springs area, new home construction makes up about 25% of the total market share. In 2017, 14,576 single family homes were sold in El Paso County. During that same timeframe, 3,504 new building permits were initiated with the Pikes Peak Regional Building Department. According to the permit data from 2017, the average raw construction costs to build a new single family home in El Paso County was $405,000 (excluding builder profit margins). With the prices of building materials and land development costs also continuing to increase, filling the inventory gap in Colorado Springs for homes under $400,000 remains to be a major challenge.
If you choose to build a new home, you will want to involve yourself with the process as much as possible to gain the most benefits. After all, why build a new home if you let someone else pick out the paint colors, flooring, kitchen cabinets, light fixtures and appliances? If you decide to buy a new home in Colorado Springs, your building project will advance in several stages with a few important checkpoints along the way. Most home builders will meet with you and your REALTOR® several times during the building process with a construction timeline similar to this:
Pre-Construction Meet-Up – Your builder will meet with you to review the final construction plans, approve any upgrades, and confirm all of your selections before any kind of construction or excavation takes place.
Pre-Drywall - After the majority of the framing is completed, your builder will schedule a walkthrough with you during the HVAC, plumbing and electrical rough-in phase, just before installing the drywall. This walkthrough is important if you are building a custom or semi-custom home as it will be the last opportunity for you to make any minor changes to the framing.
Pre-Closing Walkthrough - As your new home construction nears completion, you’ll have a chance to conduct a pre-closing walkthrough of the home. This walkthrough is necessary to insure that all the specifications were met according to the contract and that the standards of construction are acceptable. This is also referred to this as the builder “punch-list” walkthrough, where you can carefully inspect the house and flag any imperfections with blue painters tape.
Closing Day – The big day is here at last! This final walkthrough doubles as a homeowner tutorial, ensuring that you know how everything works and that you understand the warranty process. Then, it’s off to the closing table to sign the paperwork and pick up your keys!
There are three kinds of home builders to choose from. Custom Builders, Semi-Custom Builders and Production Builders.
Custom homes are typically the most expensive to build but also grant you the most design freedom. When designing a new custom floorplan, architects and structural engineers will also be involved so you’ll need to budget your project accordingly. Depending on the level of detail that your project requires, creating a new set of house plans with structural engineering can easily cost $10,000 (or significantly more). It’s not uncommon for a fully custom home project to take between 12-18 months to complete due to the extra time required for the design and plan approval process.
A semi-custom home is a great choice if you want your home to feel unique but don’t want to spend the time or money designing a new set of plans. Most semi-custom builders will have several variations of the same “master” floorplan to choose from. For instance, you might have the option to move a wall, alter the exterior appearance or substitute a bedroom for a bigger walk-in closet, etc. Many of these minor changes don’t require any additional engineering and can be done in the field. This can help keep the front end costs down considerably. The timeframe to build a semi-custom home is between 6-8 months on average.
Production builders construct their new homes on a large scale. They are able to keep prices affordable by buying lumber and building materials in high volume and employing their own tradesman versus hiring independent subcontractors. Some of the larger production builders will also develop their own land, eliminating the need for a middle-man land developer which can help reduce costs even more. A production home is the most affordable way to buy a new home in Colorado Springs but you will only have a few basic options to choose from regarding the exterior color scheme and interior selections. Productions homes are usually fully completed within 4-6 months.
In the Colorado Springs new home market, there are a wide variety of architectural styles to choose from, but one of the more popular house designs that is making a comeback is the contemporary concept. Contemporary homes will offer an open, spacious environment to home buyers with amenities that generally include the following features:
While the majority of the newer homes are being built in the northern and eastern parts of El Paso County, the areas to the south near Fort Carson including Fountain, Security and Widefield are also experiencing significant growth. Here are some popular subdivisions that are offering new homes for sale in Colorado Springs:
The first step to building a custom home is choosing the right lot. Be sure to consider any of these fantastic, luxury communities in the Colorado Springs area if you are considering building a fully custom home:
There are many pro’s and con’s to consider when comparing new homes to resale. One of the biggest benefits when buying a new home is getting a builder warranty. Most builders offer a one year bumper to bumper warranty along with a longer term structural warranty.
The two other major considerations (and common oversights) between a new home versus a resale property are the window treatments and landscaping. Most builders will omit these costly upgrades in the base pricing of their homes but a resale property will already have these upgrades completed.
Although it might be a little tough to find the deal of a lifetime in the current Colorado Springs housing market, new home builders still discount their inventory from time to time. One of the best ways to find a good deal on a new home is to track the days on the market after the home has been completed. If a new home sits for more than 30-60 days, builders will typically drop the price or offer more incentives to get them off their books. Another thing to look for is a newer subdivision that is nearing its completion. Quite often, these remaining lots are a little less desirable and will be offered at a discount price.
Buying a home without the help of a REALTOR® probably won’t save you any money. In fact, it can cost you money if you don’t know how to negotiate with the builder’s sales representative! The biggest reason why most builders won’t discount a home just because you don’t have a real estate agent is because they still need to rely on a strong sales price to support future appraisals. High valued appraisals are extremely important for maximizing a builder’s full borrowing power with their bank. The additional leverage allows them to cover their overhead, make payroll and keep the new inventory coming. So, be sure you bring along your favorite broker when you are shopping for your new home!
At the end of the day, it’s great to know that you have several options when it comes to purchasing a newly constructed home. Whether you are looking for a certain location, a specific architectural style or just want something brand new and affordable, you’re sure to find it here in Colorado Springs!
Are you interested in new homes for sale? If so, be sure to contact the Pfeffer Group team! We know the best home builders in the Colorado Springs real estate market and look forward to finding you the perfect home!