I recently came across an article published in Fortune Magazine about KB Home, one the country’s premier home builders, who plans to go “back to the basics” when it comes to home designs.
Like many builders during the housing boom, KB got swept up in the oversized
McMansion craze. But today, the company “is among the first home builders to recognize the error of its ways, and it is returning to its roots as a purveyor of low-cost, smaller homes,” the article reports.
New affordability
Industry experts believe that KB’s shift from high-end luxury homes to more affordable start-up properties may lead other big-name builders to follow suit. What will this mean for first-time homeowners? More affordable homes, of course.
As foolish borrowers blindly snapped at 100 percent-financed ARMs for overpriced homes they really couldn’t afford, most people looking for starter homes during the 2005-2006 buying frenzy got locked out due to soaring prices. The move to build smaller dwellings has dropped the cost of new-home prices in some areas by as much as 30 percent, according to Fortune. Today’s buyers, KB found, “are willing to trade size and amenities for far lower prices.”
For the first time in years, buyers may soon find that purchasing a new home can be as affordable as renting. But this doesn’t mean you should rush out and bag the first bargain home you set foot in. Be mindful of other key factors, such as the quality of local schools, property values and number of foreclosures in the area, all of which will have a long-term impact on your home’s value.
Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@HomeFinder.com.