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The Dirt on Spec vs Custom Home Development

Posted by John Hathorn on November 5, 2020
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DID YOU KNOW? Construction spending this year is up 4.1% from last year, according to new data for September. During the first nine months of the year, some $1.058 trillion was put toward public and private construction, compared with $1.016 trillion for the same period in 2019.

Speaking of construction; have you ever wondered why some homes tend to seemingly “go up overnight” while other construction projects in the neighborhood seem to take forever to complete? Similarly, have you ever wondered whether a home being built is going to hit the market versus a project where the owners will be moving in and keeping the home for themselves?

The answer almost always points to the fact that spec home builders have systems in place to ensure that the project gets completed quickly and efficiently. Spec home builders have refined the process of building and usually worked hard to remove the inefficiencies. They can usually get a new home completed within 10 to 12 months. Meanwhile “end-users” or “owner-users” tend to struggle and agonized over the myriad of decisions that must be made when building a new home for themselves. There are end-user custom home construction projects that take 2+ years to complete. Another reason for this is that some owners finance the project with cash rather than construction loans. When lumber or drywall prices increase, and costs go beyond what was originally budgeted, owner-user projects can stall.
Then of course are the dreaded “change orders” that can stall a custom home build. This happens when owners visit the site and realize that they want a window moved, a room enlarged or maybe the kitchen should be bigger….you get the idea. Many of these changes mean going back to the architect and then to the City for approvals. This can add months to a project.

So, if you see a home that has framing that looks dark and weathered, it’s been exposed longer than a spec would have been and that is your tell-tale sign of an owner-user project and not a spec home.

DID YOU KNOW? Federal data shows US men represent about 66% of Covid-19 deaths among middle-aged people, similar to overseas. Scientists say the likely reasons include health problems like high blood pressure and diabetes that men tend to have more often and that can lead to worse Covid-19 outcomes. Women also have more able immune systems. Men are more prone to poor hand hygiene, lax mask-wearing habits and delaying medical care.

 

DID YOU KNOW? Bathroom technology has arrived! Trying to get the water temperature right for washing or shaving by manually altering the flow of hot and cold is a thing of the past with the Santorini Faucet. Its LCD screen displays the exact temperature, changes color from blue to red as the temperature of the water rises, and touch-sensitive controls allow you to set a desired temperature. Other useful features include a timer and date, time and water pressure level displays.

 

DID YOU KNOW? Agents often point out speakers in showers as a fabulous home feature. Now there is a less expensive quick fix: The Bang & Olufsen Beosound A1 2nd Gen is a quick and convenient alternative. It is a portable wireless bluetooth speaker with powerful omnidirectional sound that has an 18-hour rechargeable battery. Two devices can connect to it at once and control the tunes, while a built-in microphone and voice assistant means you can ask Alexa to change the track or make a phone call. Maybe a nice add-on feature for shower or a great Christmas idea!

Here is some real-time 90402 market info:

There are currently 28 active listings, they have been on the market for an average of 66 days. The lowest is listed at $2,150,000 and the highest is listed at $18,500,000.

The newest of these active properties is my listing at 519 Stassi Lane. Incredible ocean and canyon views surround this open-floorplan 5 bedroom, 5 bath home. We have it listed for $5,190,000 and I think it will be one of the next sales in our market.

There are currently 11 homes in escrow.

In the last 30 days, 8 properties have sold. These sold after an average of 43 days on the market. The average sales price is $4,528,000, selling for an average of $1446 per square foot.

There are new MLS rules that restrict our ability to publicly market “pocket” listings. If you are in the market for something and not finding it in the public inventory, call me! I might have just thing you are looking for- 310-924-4014.

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