Tract Home Value
Mom wants to move so I went with her to a tract home development yesterday.
In my opinion, this particular development was above average quality for tract homes. From the outside, it looks pretty typical with a trillion houses tightly crammed together on postage stamp lots. However, the yard maintenance of existing homes was above average. The houses all have a "same" look to them but there are a variety of plans to choose from as well as different types of stone/brick combos which gives the development more interest.
The interior standard features really set this development off from the rest. For example: Wide baseboards & trim, 10-12ft ceilings, solid wood 8ft front door, 8ft interior doors, vinyl tilt-in sash windows, drop-in appliances, granite countertops, sprinkler system, full sod and (tiny) landscape package, etc.
I couldn't see the structural features (they are on-site stick built) but I was told that the average utility bill is $200 a month for a 2500sf house, which is pretty good in Texas. I did see that they had several return vents all over the house. The literature says the HERS (home energy rating system) index is 73.
You can google Gehan Homes in Texas if curious.
The options are pretty much endless which can jack up the cost of the home up to $150k. The sales lady was surprisingly forthcoming about specific upgrade costs and she did say that they have appraisal issues when upgrade options are over the top. She also said that rarely happens and most people pay cash if they are upgrading that much.
I took all this info home and did some research. Based on figures the sales lady gave me, I took the price of one of the plans and added $75k worth of upgrades. Stuff like adding a 2nd floor gameroom, extended patio, frameless shower, wood floors throughout, etc. I came up with a price per square foot of $116. Then I went online to see what homes in the area/same development are reselling for. This development started in 2009 and I found six homes on the market that averaged $123sf.
I know I need to see what homes actually sold for but this is a seller's market so I'm guessing they are getting pretty much the asking price. This area is just outside of Austin, and if you watch real estate news, you know that this is the fastest growing area in the country right now.
So, after all that I come to my point: Is it possible that a tract home development is a better deal (I won't say investment) than building custom or buying pre-owned?
I have a theory that these tract homes don't appeal to everyone even with a lower price per sf because you have to put a cash 25% deposit down on upgrades and these houses take about six months to build from contract signing. However, they're selling like hot cakes.