Choosing To Build A House When Their Is A Home Building Decline

Is it a good idea to build when there is a home building decline. With a decline in home building thanks to the financial crisis, the answer is yes. This is because without anything to build, these people will go out of business.

But is that the only reason? The answer is no. Thanks to the decline in home building and the law of supply and demand, the price of lumber is at its lowest in 5 years. This means you can buy more right now together with other construction materials you will need so you can achieve a lot with your budget.

With that, the first step is to plan your budget. You have to find out how much it will cost to build your home. There are ways to make it cheaper like choosing a home that does not have many corners. The more corners that you have the more cost in building it.

Next, select a house plan that fits within your budget. You can look at magazines, books, the web or even have them drawn up for you with the things that you want in it as you want them. If you choose a plan from a magazine, book or the web and you want to change somethings with that plan will have to go to an architect so that blue prints can be drawn up and this can be shown to the contractor, that you can get some bids of what you want built.

Another factor is where the lot is located. If you have had this for a long time, chances are the area is already well developed. If it is secluded like somewhere in the mountains, be ready to shoulder a little more because it is going to take awhile to clear the trees and remove the dirt from the ground. Finding a way to get power and heat, that is extra costs. Solar is an option or wind power but you will need backup systems as well.

Because of the slump, you can find a reputable and trusted contractor right away so the construction time could be faster then you expected.

The nest thing you have to do is pick the right contractor for the job. As mentioned earlier, the building decline will make it easy for you to find these professionals because they do this for a living. You just have to see which one is offering the best deal.

Make sure to check the contractor out. Are they licensed for the area that you live in? Are they insured-if someone gets hurt on your property you are liable, they could come after you for the injury costs and maybe more. Do they have complaints about them at the Better Business Bureau? Do they have references about the kind of work that they do, can you check them out? Did you look at more than just one contractor? What do they say they will charge you for the construction-compare all the contractor bids for doing the construction. Now that you have chosen a good contractor you can move forward.

Plan on paying the sub-contractors yourself then you know for sure that they get paid. If you pay the contractor and he does not pay the sub-contractors than you can have leans placed on your place and you have to pay that again. That is why it is best to pay them yourself. You make sure that it get done and no one comes back after you when you think it got paid by the contractor. Save yourself that trouble.

The next thing that you need to do is sign a written contract with the contractor and anyone else involved in the project. If everyone agrees to it, then there should not be any problems. You should just be ready to amend it in the event that some problems happen along the way because it always does due to many different factors.

Your dream home will be built in a few months even if there is a decline in the home building industry. After all, you have the money, the plan and the people so you have everything that you need to turn that into a reality. What is even better is that because the market is slowing down, this means cheaper building materials, cheaper labor, and faster construction times.

For those who don't want to build a home but have money to spare, why don't you consider buying an already built one instead. You just have to see the place first to find out if it is worth buying because you may have to do a lot of repairs and restoration first which could be equivalent to what you may be paying for when you build your home. If that is the case, just take advantage of the decline in home building and work from the ground up.

We would love to hear your comments.

copyright Dan and Deanna Finlinson "Marketing Unscrambled"

Home Building Decline And The Hurdles For Building A Home Now

Part 2

If you signed a warranty with your contractor, any problems will be taken care of by them without any additional charges.

What is even better is that you live in a dwelling according to your specifications. If you don't like it or you want to add something, you can make changes and no one will oppose your decision.

Since your house is new, it is more energy efficient compared to older homes thanks to new technology and you are compliant with new environmental regulations.

A decline in home building has not stopped other people from having their own house constructed. In fact, most people you ask will probable tell you that they prefer to live in their own home rather than paying rent. With that, you have a land title under your own name and no one can take that away from you unless you decide to sell and move somewhere else.

This will enable you to establish good credit with the bank when you need to apply for a loan. That may not happen right now because of the financial crisis but when it is over, you will soon realize that this was very handy.

You will also get tax cuts which will never happen if you are renting. You will be happy about this when it is time once again to pay your income tax for both federal and state since these are usually fully deductible.

There is no better time to own a home or face its challenges than during a decline in home building because both labor and materials are cheap. If you have the money to pay for it, you shouldn't have a problem paying for taxes and mortgage.

Home Building Decline And The Hurdles For Building A Home Now

Let's say yo have the money and the resources to build a home. Within a few months, it is completed. Is it happily ever after? The answer is no because there will be a few other challenges ahead even the places where their is no decline in home building.

When you have built your home, one thing you have to deal with is the property taxes and this could range from $1,000 to $ 10,000 depending on where you live. Take note that this does not yet include mortgage expenses if you have not paid yet for the house in full. The only consolation is that you pay for this on a fixed term.

While most home values go up after how many years, in some cases like during the financial crisis, its value could go down. Some analyst said that the average home value has only kept up with inflation over the last few decades so you don't really gain that much.

If you are employed and you told that you have to relocate, it will be hard to move right away since it takes time to sell a house.

Should there be any problem with the house, you can not call your landlord since there is none. You will have to find a specialist to figure out what is wrong in order to fix it.

But these things should not deter you from considering building your own home even during a time when home building is on the decline. Why? Because building a home is a one time investment unlike rent where you pay a fixed amount per month and this could up the following years.

Home Building Declined, How Much ?

Just how bad did home building decline?

The construction industry took a beating due to the financial crisis. Just how bad did home building decline? It depends where you look and what part of the country that you look at, but over all, the numbers are very frightening.

In a report released recently, new order for homes built in the third quarter of 2008 was down 25% compared to 2007. In numbers, that is 2,002 homes for 2008 compared to 2,660 homes in 2007.

Because of what is happening in the economy, there was increase in the number of cancellations from 24% in 2007, to 27% in 2008. While real estate companies tried to curb the trend by offering it to other potential buyers, the market was not biting which is why there were a lot of homes that were not sold.

In terms of home building revenues, that roughly translates to $ 928 million. If you think that is still good, look back at the sales performance last year and you will see that it was lower by 27%. These figures goon and on and they are really depressing.

So are companies making money? No and the worse part is that construction companies have to layoff hundreds or even thousands of workers in order to stay afloat.

If you wanted to build a home, the only way you can do that is if you have extra money flowing around right now because most bank will not be able to loan that amount to you right now.

At this rate, the construction industry will only be able to produce 817,00 new homes this year compared to 1.98 million units in 2006. That is a lot and it is not expected to improve any time soon.

But are these numbers surprising? The answer is also no because it is the right reaction especially when the country is in a financial crisis.

Analysts believe this will change in the next 2 to 3 years because within this time frame, homes that were unoccupied will now have people living in them and only then will home building be once again on the upward trend.

What everyone is hoping for right now is a miracle because we are not yet out of the woods when we talk about the current financial crisis. Yes, a $ 700 billion bailout plan was approved and signed into law but just like Bernanke said, no one expects the recession to end overnight. It is going to take time.

Is the home building decline also happening elsewhere? In the case of Canada, the answer is no. In fact, the opposite is happening. If you were to compare the number of houses built for the month ending September 2008 versus 2007, 6,000 more homes were built in 2008 compared to 2007.

There are many reasons for this such like more people want to settle down so they move away from the rest of their family and most importantly the program they have in place happens to be much better across the border compared to what is available in the US.

But back to reality, no one can deny that over here, there is a sharp decline in home building. The only thing anyone can do is hope for the best in the months and years ahead so we can perhaps forget that this ever happened.

We would like to hear your comments.

copyright Dan and Deanna Finlinson "Marketing Unscrambled"