My wife went to a church retreat this weekend in the Virginia Beach area. The church still had some time left on the rental (they had paid through today at 10 AM) so there was some time for others (like myself) to come down to enjoy the house for a bit.
The house was right on the beach, and it was huge (10 baths). The one next to it was huge as well, but only had a mere 7 baths. They were very new construction. My wife said that they were one of the first groups to rent the big one. Zillow.com doesn't even have the new house on their site. This place had an indoor pool, home theater system, game room, as well as two refrigerators and lots of kitchen space. Also, high-speed wireless internet throughout.
As nice as this sounds (and it was nice!) it still didn't look like the best materials and construction. Paint was already peeling in the room with the indoor pool. The glass on the windows facing the ocean was already etched and cloudy. I could see gaps in the mitered corners of a window frame. The steps in certain areas weren't the same width. The wireless network was really bad — almost no signal. Three of the internal doors wouldn't latch shut, and wind could be heard whistling through the doors when shut. The locks on the front door were already showing signs of wear. There were nails and screws sticking out of the sand on the side of the house.
Numerous signs of a cheap, hurried job.
To be fair, I could say that it's not worth the bother to use the best materials for a home right on the beach in hurricane country. I could also say that new homes have “bugs to work out” and since it's so new, a little roughness around the edges should be expected. And it was a nor'easter rattling the house this past weekend.
But is this “contractor-grade” quality the exception? I don't suspect so. It's by no means ubiquitous, as my mother-in-law's buildier is great. Copper plumbing throughout, seamless drywalling, studs that are square and plumb everywhere, and not a single nail on the ground after work was done for the day. So I'm not making a blanket statement about every home builder.
What I do suspect is that the low-interest-rate years at the beginning of the decade got banks lending as fast as they could to buyers who bought as fast as they could, which resulted in builders building as fast as they could to take advantage of the real estate bubble that was inflating as fast as it could. There was so much liquidity and financing sloshing around that getting into real estate was as close to a no-brainer as you could get. And since it's wise to strike while the iron is hot, builders were gorging themselves on the feast, perhaps looking forward and preparing for the famine, or maybe not. Ticky tacky houses, holding together for the time being, built and sold wholesale to buyers clamoring to get in more for fear of missing out than for buying value.
But why spend any extra time on the details — painting correctly, lining up the strike plates on the doors, cleaning up the nails — when your buyer/investor doesn't care about such details? (They must not care that much, or they wouldn't have accepted the house.) Why be concerned with building, or purchasing, a house for the long haul when you're only concerned about making a quick buck, either on the profit from the house (which goes up the cheaper and faster it's done) or on the appreciation? Rent it, hope it holds up until next hurricane season, then sell it to someone for a cool $100k profit?
Many of the big houses in my home town are 100 years old, made of brick. Dwellings in Europe are hundreds of years old. Most of the newer subdivisions around here are overpriced junk. Will the houses be up in 100 years? I doubt it. Thirty or 40 years seems better.
Having money that's too plentiful and too easy to get makes everyone sloppy. I wonder how that will change after the pendulum swings the other way.
I love my old house… solid as can be and beautiful. It's got many amenities that I couldn't have afforded in a new house, including high ceilings, walk-in closets, and solid wood floors throughout. Give me an old house over a new house anyday!
I agree with savvysaver. Old houses are much better built than the new ones. For one thing, the fact that they are old already means they are well built, as the poorly built ones are long gone.
The vast majority of new houses today are junk. My brother in law works for a construction firm as the "cleanup guy". He comes in to take care of issues from final inspection. On some houses the drywallers go right over the outlets to save time. On most houses the moldings are poorly cut/installed. On almost every new home the normal appliances are the absolute cheapest garbage the builder can find. Check the corners too. I have seen new homes where walls are anywhere from 80 to 100 degrees.
Then there are the clone subdivisions where the 150+ homes come from 4 or 5 unique designs. Great for the builder but reminds me of a military base.
We bought new construction a little of four years ago and the quality sucked. But we sold that for a sizable profit and moved into a five year old house (so about a year older than our first house) and it's much better… The big difference is that the guy that owned this house was a builder, and he built it for his family. Our first house was built by a developer just trying to build and sell houses as fast as they could. The nice thing about our previous house was that it was the only floorplan of its type in the subdivision, so at least it was unique. And it was on a great lot.
Great post. My DH and I were just talking about this over the weekend. John Public says it reminds him of a military base – my DH says it's a trailer park for the middle class. Which we boguht into, hook, line and sinker.
New homes built by scam artists (builders) are all overpriced oversized junk – garbage. They are created with the sole purpose of ripping people off. NEVER EVER buy a house built during a real-estate boom/bubble. That is unless, you yourself are a scammer rip-off artist yourself. If you intend to live there, always buy things built during a recession or forget about it.