With shrinking inventory of existing homes for sale in Spokane’s booming real estate market, more people are considering buy land and building their new home.
Joel White, Spokane Home Builders Association executive officer, said demand for homes and builders is “really high right now.”
“The Multiple Listing Service inventory is near all-time lows for this time of the year,” he said. The cost of new home construction is rising, but that is also pushing up existing home prices.”
White said Spokane Valley, the lower South Hill, north Spokane are experiencing a majority of growth in single-family home construction.
Home inventory is down 19.7 percent since March 2017, according to the Spokane Association of Realtors.
Joe Mann, who owns a home in Colbert, experienced that inventory shortage firsthand during his search for a home in Liberty Lake to be close to his grandchildren. Every home he looked at already had several offers on it.
“Homes just don’t last very long in Liberty Lake,” he said. “The market is extremely hot there, to say the least.”
Mann, a former Realtor and a past president of the Spokane Association of Realtors, said the shortage of available homes influenced his decision to build a custom home.
“I found a smaller builder that I knew, talked to them and they made (the process) easier than I thought it would be and financially feasible,” he said.
Mann’s youngest son and his wife built their home last year and provided helpful advice on the homebuilding process.
“We talked about how they dealt with it, and learned a lot from them as well,” he said.
Mann said because inventory is scarce and homes are selling fast, he and his wife didn’t want to run the risk of not having a home ready to move into if their house sold quickly. So, by building a home, the timeline was predictable.
“This way, by building, we can stay in our house until 90 days before the (custom home) is built, put (our existing home) on the market, sell it and move once,” he said.
With a custom home, people get to pick out everything such as colors, flooring and other interior elements, he said.
Mann said they are modifying an existing floor plan, adding square footage and moving interior walls for their custom home.
“It’s good to be able to make all those decisions, but that’s a bit of a challenge as well,” he said.
Todd Sullivan, owner of custom home-builder Sullivan Homes, said business is booming because low inventory is forcing people to think outside the box, and that includes home building.
“The inventory issue is tremendous,” he said. “Every day we are looking at inventory levels here.”
Sullivan’s full design-build company allows customers to pick out specific features for their custom home, schedule appointments, communicate with the builder and access webcams installed at the home site, so they can view construction progress in real time.
“Technology has changed (the custom home process) and made it more accessible for everyone,” he said, likening it to buying a new car.
“When clients come to us, we start at the very beginning,” Sullivan said. “The difference between buying and building a home with us is they truly will design their own home in a 3-D CAD design system.”
Sullivan said typically a real estate agent isn’t involved when people have a custom home built, which means they can save on commission costs. People can also save money through reduced lender fees and rates. Additionally, money can be saved through selection of home features.
“If you build a custom home with us and you are careful in your selections, (then) what you do you can save quite a bit of money,” he said.
White, the SHBA executive officer, said people interested in building a custom home should reach out to various builders and look for the type of home and land quickly.
Mann advises people to have finances in order before building a home by having cash on hand and other liquid assets, because not every lender can do an all-in-one construction loan. He also they should know what the cost is going to be before signing the contract.
Mann is in the process of signing the contract for his custom home, which will be completed in six months.
“This is new for us,” he said. “It’s time to do something like this. We are looking forward to it as an adventure and are having fun with this.”
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