Functionality and Value

Most home purchasers will sell their principal residence at some point.  It is imperative that your purchase is approached with this future sale in mind.  Functionality and value are the keys to maximizing capital gains that can be pocketed or used to improve the specifications of your next home.  It is suitable to temper the relationship of visual appeal with the purchase price of your home.

Should the buyer of a home focus solely on creating a breathtaking list of materials?  Or should the buyer focus on the lowest purchase price using sub-grade building materials?  The prudent approach is to find a middle ground that will permit confidence in your selections while maximizing the return on your investment.  A purchaser certainly wants to enjoy their living experience in the home without over-spending on bells and whistles that will not provide a good investment return.

 The most basic value of a home is a safe shelter for your family.  Our industry has gotten away from this foundational concept and has put too much emphasis on a home being a symbol of status.  Many purchasers are pressured by builders, real estate professionals, friends, and family members to choose the most expensive materials available to them.  This desire leads to a loss of functionality and value.  Will top of the line cabinets improve your living experience?  Will the best flooring materials installed with a creative design lower the monthly operation costs of owning a home?  Will the latest and greatest decorative trim package allow you to recapture those costs when it comes time to sell?  We believe the answer to all three questions is no!

The effects of supply and demand traits will be the biggest drivers of home appreciation and capital gains.  In the year 2005, the unofficial slogan of real estate professionals was “buy real estate, they aren’t making any more land.”  While this is still true, the current bear market in real estate has proven that there is sufficient supply, as of today, to accommodate expansion.  This will not always be true.  Population demographics point to a strong increase in household formation (demand) and the decreasing availability of land in our area will eventually lead to strong price growth.  This may be hard to fathom right now with the pervasiveness of fear that real estate values will continue to decline.  This will not always be true.

Our federal government is drafting a bill that may give all home purchasers (that intend to occupy the home) a $15,000 tax credit.  National statistics point to increased numbers of pending home sales even before news of the tax credit came out.  The shift from a bear to a bull market may happen quickly in our area.  We have strong employment numbers compared to the national average and two new hospitals will improve job growth even more.   Timing is a factor that no purchaser or seller can predict or control.  We believe timing is secondary to functionality and value in creating increased home equity over time. 

New home buyers can overcome their market fears by focusing on functionality and value.  If you do not overspend on material upgrades; if you do not focus solely on the lowest priced designs; then you are setting yourself up to reap major investment success.  We have helped our clients over the last few years buy into the market to lock in their opportunity for investment growth by focusing on functionality and value.  Partner with us today to design a valuable and functional new home that will get you on the path toward moving up to your future dream home!