Fairbanks New Construction starts decline to 1999 levels.
It’s no secret that with the dramatically changed lending landscape, existing home buyers are facing a more thorough examination of their income and credit profiles. Home builders, especially small builders have found the lending environment for speculative building projects has all but dried up. In an era where multiple buyers were on every corner, lenders fears about a builder defaulting was at a minimum. Fast forward to today and we face an uphill battle to convince lenders speculative building is worthwhile, and on the right scale, relatively low risk.
As you can see from the above chart, Fairbanks new construction starts have dropped to their lowest level since 1999. Today there are less than 30 new construction homes on the market. When we started building in 2002 it was because clients were telling us daily that the glut of existing homes were too dated, unmaintained or the homes simply didn’t fit their lifestyle. Today, we’re hearing the same cry from buyers who have their sights set on a brand new Fairbanks home.
If you’re one of those buyers for whom only a new home will do, take heart as there are options. Realize that the spec homes currently for sale (and priced correctly) are in demand; be prepared to make an aggressive offer if the situation warrants. An increasingly popular option is to contract with a builder to build a home from his (or her) existing plan library. Many builders have a library of homes they’ve already built and in some cases, land upon which to build it. Although many lenders have curbed speculative construction lending, most will extend credit to a builder with a contract in hand from an approved buyer. Granted, the latter can take some time but you could end up with a brand new home for about the same price you would otherwise pay.
Have questions? Ready to start the search for your piece of the Last Frontier? Call us at 907.699.6024 or contact us online.
