Cost of Ownership – Resale Value

Cost of Ownership – Resale Value

When looking at your new home investment, one of the considerations is future resale value. Buyer preferences change over time, and the farther out your time horizon, the less confident you can be in a design, amenity, or product’s future popularity.

Americans live in their homes an average of 13 years, according to a study cited in a January 2020 article from the National Association of Realtors. So, here are three plans: a hot new design and two similar size plans that were new and popular years ago:

More than 25 years ago, the Orchard (#2818) was a top-selling home plan. The bedroom suite bathroom’s twin boxed-out windows and whirlpool tub have fallen out of favor with most buyers. Twenty-four-inch wide bathroom doors, a 4-foot shower and 6-foot walk-in closet don’t excite most of today’s buyers. The peninsula kitchen is fairly closed off; open to the entry is a formal dining room; and you enter through the laundry room coming in from the garage—all issues which may depress the home’s resale.

Orchard - #2818

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Orchard - #2818

Though it’s had several birthdays, the Leftwich (#29300) plan is still quite popular today and illustrates some evolving buyer preferences. It is an open floor plan with an island kitchen that flows freely into the eating area and family room. Compared to the Orchard, the Leftwich’s bedrooms are slightly larger and the closets are significantly larger. Plus, there is a rear foyer entry from the garage with separate laundry room.

Leftwich - #29300

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Leftwich - #29300

The Teglia Farm (#42482) is a brand-new plan that is already getting a lot of attention. Embracing the shift to value engineering, this design’s foundation has minimal jogs to keep costs down. In its kitchen, the island has back-to-back base cabinets for added storage, and the expected walk-in pantry. Without the limitation of walls, the dining area can temporarily expand into the family room for big holiday meals. There is a 5-foot shower in the bedroom suite and its walk-in closet enjoys a convenient connection with the laundry room.  Flexibility is illustrated by the buyer’s choice – walk-in closets for Bedrooms 2 and 3; and, something neither the Orchard nor Leftwich have – a powder bath.

Teglia Farm - #42482

(Click on the images to view larger.)

Teglia Farm - #42482

Market Shifts, Trends, and Fads. Shifts in buyer expectations are the most pronounced and universal – having significant impact on a home’s appeal and resale value. There has been a shift away from formal dining rooms as we have become generally more causal, preferring usable space in our homes. Value-engineering is expected. What was an established trend, fueled by the 2020 pandemic, accommodations for working from home have likely become a shift for buyers.   

Trends are obvious departures from the past and tend to address an existing problem or issue but are not as widespread as shifts. Seventy-eight percent of American adults don’t bathe (they shower instead) and among those who do like to take a tub bath, most use the tub only occasionally. A decade ago, some Realtors were telling us that no tub in the owner’s bathroom would hurt resale. Today, most buyers shy away from a home without a larger shower in that bathroom and feel a tub is waste of space…they don’t want to have to dust the tub!

Walk-in Shower

The 25-year old Orchard still has good curb appeal, but the combination of obsolescence and lack of current, in-demand amenities hurts its resale value. It likely also has dated finishes and products. The Leftwich design speaks more directly to today’s buyers, but still its kitchen pantry cabinet and “snout” garage don’t work for some buyers. The Teglia Farm embodies many of today’s buyers’ preferences. So, 13 years from now, which of those designs would you want to be reselling?

Beyond design, resale should be a factor when making other choices. You choose to add the builder’s “first impressions” option package, with the beautiful front entry door, tapered porch columns, and attractive garage door. Not only will you appreciate your home’s curb appeal every time you arrive home,  so will prospective future buyers. In fact, a study by Therma-Tru found stylish entry doors could increase a home’s perceived value by an average of 4.2% or $18,750. What about some extra-cost options that aren’t so easily appreciated? You opt for the builder’s “energy investment option.” Behind the walls, that high-performance insulation is a hidden asset. But you can show your lower utility bills, effectively bolstering your home’s resale value. Know that when a home’s price is higher than expected, buyers will look for the reasons why it is worth more. Contrast that with a home that has a lower-than-expected price. People looking at that home focus on the negatives – what makes it cheaper. 

Next time…Offsetting Home Ownership Costs

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Tailoring Solutions for You – Design Basics’ Concierge Service

Tailoring Solutions for You – Design Basics’ Concierge Service

Adding new home plans to your portfolio is risky. Will the design attract buyers? How much will that home cost to build?

Design Basics’ Concierge Service is designed to help you minimize such risks. We know what is selling in terms of home design. Based on your goals (e.g., affordability); restrictions (e.g., 40-foot maximum building widths); and target market or specific customer needs (e.g. multi-generational households); we can recommend popular home designs that improve your odds of success.

After discussing what you are looking for in a home design, we’ll research our entire library of home plans to recommend top designs that meet your needs, saving you time! While it is easy for everyone to search home designs on our website, with heightened knowledge of our plans and search methodologies, our plan specialists often identify ideal home designs that may otherwise be missed or overlooked. In addition, we may recognize that a certain plan, with minor modifications, might be exactly what you are looking for.

What is the value of working with a plan specialist? You may have the requisite accounting knowledge and software, but you work with a CPA. You might be tech-savvy, but you hire a website design company. Residential design is a similar specialty. Is that neat amenity a fad, or destined to become a “must-have”? Was the home value-engineered, helping with your budget concerns? Our plan specialists are your home design consultants, tailoring recommendations and solutions based on your situation and needs.

Upon request, we can even review your existing design portfolio to identify gaps and opportunities we feel could be better addressed through design to help you sell more homes. Over 60 million Americans live in multi-generational households. Which of your home designs address this market’s needs? You have four one-story homes, which account for half of your sales, yet they all have “snout” garages and the writing is on the wall – several new neighborhoods are requiring flush or recessed garages.

Kickstart Your Neighborhood℠

Design Basics is a builder-oriented home plan design firm. With our Kickstart Program, you can get up to five sets of construction drawings for estimating purposes per year for just $100 each, including the corresponding elevation and floorplan presentation artwork for marketing. You will also enjoy plan and product discounts, FREE upgrades, and more!

Neighborhood in a Box®

Our Neighborhood in a Box Program can save you 50% when buying four or more home plans! Choose from pre-configured neighborhoods or build your own when you choose from over 1,300 designs.

Builder Plan Sets

A great floor plan with multiple elevations. Create a cohesive look for your neighborhood with builder plan sets at a discounted price.

Multi-Elevation Plan Set

Sample Builder Plan Set (#42376)

In addition, our home plans can be licensed for construction on a single-build or unlimited-build basis. Your plan specialist will be happy to discuss ways to get the most for your home design investment. Contact us today about our individually-tailored Concierge Service: 800.947.7526

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Cover Photo: <a href=”https://www.freepik.com/photos/business”>Business photo created by nensuria – www.freepik.com</a>

Design Affects Cost – Size Matters!

Design Affects Cost – Size Matters!

It may seem obvious that the larger the home, the more it will cost. But there are other factors that affect the cost.

Single-story vs. Two-story. Single-story homes typically cost more than two-story homes of the same square footage. The Bonham (plan #42239), below left, and the Moss Bluff (plan #43013), below right, are about the same size in terms of square feet. Both have relatively economical gable roofs and the same size two-car, front-entry garages. But the Bonham has a more expansive, costlier roof than the efficiently stacked Moss Bluff plan.

Bonham - #42239
Moss Bluff - #43013

The Bonham also has a much larger, more expensive foundation with considerably more steel if building on a basement. And being 16 feet wider and 26 feet deeper, the Bonham (below left) will require a larger, more expensive home site on which to build than the Moss Bluff (below right).

Bonham - #42239
Moss Bluff - #43066

Split-Entry Design. Generally focused more on affordability, split-entry designs can be the least expensive to build. For the Dane Mills (plan #35084), costs are reduced because the garage occupies what would have been much of the basement.

Dane Mills - #35084
Dane Mills - #35084
Dane Mills - #35084

Multi-level and 1-1/2-Story Designs. Similarly, many multi-level and 1-1/2-story plans offer good affordability. The Tillamook (plan #43038) has the garage and family room at ground level, so when building on a basement, it’s like a split entry – you go up a half flight of stairs to the kitchen/dining/bedroom suite, or down a half flight of stairs to the basement, which is under that portion of the home. Positioned above the garage, the secondary bedrooms and bath are less costly to build as in a two-story home.

Tillamook - #43038
Tillamook - #43038
Tillamook - #43038

Join us next time as we look at the cost savings achieved through value engineering.

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Cover Image: Cherry Gables – plan #42441

Beauty is Within

Beauty is Within

Aesthetics and Livability

Let’s look at a few of the sometimes overlooked or underappreciated floor plan design factors that drive cost.

Staircase - Grand Manor #9286Staircase design, construction, and materials run the gamut of pricing. One guideline often used relates to the staircase’s public visibility – the more prominent the staircase placement, the more attention it usually gets. In some homes, the staircase is a signature design element; in others it is primarily functional. Simple and straight is the least costly staircase design, but that layout doesn’t work for some home designs. U-shaped staircases and L-shaped staircases with a 90-degree turn are also common but require a landing, which adds some cost. Flared and curving staircases can be stunning but are expensive.

This elegant staircase (at right) is from the Grand Manor (plan #9286).

Staircase finish materials can have a large impact on the staircase cost. Having a wall on either side of the staircase is less expensive than a railing with balusters, cables, or glass panels. Carpeted stairs are usually less expensive than finished woods, Corian, stone, or glass. Regarding steps leading down to a basement foundation, if there is a door at the top of those stairs, they need not be carpeted.

Stair Carpeting

“Waterfall” carpeted steps are less expensive than “cap and band” carpeted steps.

Ceilings. Most new homes today feature 9-foot tall ceilings on the main floor, though some rooms may have even higher ceiling for dramatic effect. Those 9-foot ceilings make rooms appear and feel larger, but the longer framing lumber and larger sheets of drywall mean homes with 9-foot or taller ceilings will cost more than if they were built with 8-foot tall ceilings. Detailed ceilings (e.g., boxed, trayed) look great, but add expense as well. And even though cathedral ceilings may follow the home’s actual rooflines, they are considerably more expensive than standard, flat ceilings.

Ceilings are truly special in the Westcott Manor (plan #9171). There’s the Family room’s cathedral ceiling as well as cathedral ceilings over the tub in the suite bath and over the sink area in the compartmented bathroom shared by Bedrooms 2 and 3. Bedroom 3 also has a ceiling that slopes to 11-feet high in the center, as does the suite’s tray ceiling. 

Westcott Manor - #9171

Natural Light. The physical and mental virtues of our exposure to natural light are well-documented, but there’s a cost to having larger or more windows in our homes. You may notice that some Design Basics’ home designs have the suffix “BL” (Better Living) following the plan number. Looking carefully, you’ll see additional windows on those home plans. Take the Cavanaugh plan for example. The BL version of that plan shows added windows in several rooms. Importantly, those windows are on other exterior walls, providing natural light from another direction, which is especially appreciated if the only windows in that room faced north. Additionally, having windows on two separate walls allows for natural cross ventilation of those spaces, improving the flow of fresh air in your home and those breezes make it feel cooler on warm days, so you may not feel the need for turning on the air conditioner.

At left, the Cavanaugh (plan #8540), and the Cavanaugh BL version (plan #8540BL) at right. Notice on the BL version the added windows on the right side (eating area and den), plus an additional window in the Suite bedroom.

Upstairs, both bedrooms gain windows on the outside walls in the BL version of the plan. There’s even a window to brighten the optional expansion area in the BL design!

Cavanaugh - #8540
Cavanaugh - #8540
Cavanaugh BL - #8540BL
Cavanaugh BL - #8540BL
First impressions matter.

The Durango (plan #50020 below left) impresses, with its dramatic, curving, window-lined back wall and radius peninsula kitchen. It also costs as much to build as the larger Durango Point (plan #50043 below right) that provides a more spacious eating area.

Durango - #50020
Durango Point - #50043

Arches and columns can add distinction – and cost. As seen in the Murnane Manor (plan #42156), arched openings line the home’s front entry, with arches on either side of the formal dining room resting atop columns. Echoing that theme, arched recesses for a hutch space and display niche add further “Wow!” It’s a matter of your investment priorities, the look you’re after, your budget, and how you want your home to live.

Murnane Manor - #42156

Rear Entry Foyer. For homes with attached garages, we go in and out of our homes through the garage over 90% of the time, and that rear foyer entry has become a design focal point. Facilitating how people actually live in their homes, top rear foyer designs will provide a place for coats, a bench for tying or removing shoes, and a drop zone for organization and minimizing clutter. These must-have amenities do add to your home’s price, however, compared to dated home plans where a laundry/mudroom is your entry from the garage. Laundry rooms are a top priority among new home buyers, they just need to be elsewhere. Those laundry rooms are also an expense consideration, especially because laundry room amenities may add to your home’s price twice – the cost of the amenities themselves, plus they often require a larger space, increasing the home’s square footage.

Locklear - #42074

The Locklear (plan #42074) presents an accommodating rear foyer with drop zone, bench topped by lockers or cubbies, and coat closet. The laundry room is separate and provides storage, hanging, folding counter, sink, and window, all of which add to the home’s price.

Bathrooms can have a significant impact on your new home investment. The Cedar Ridge’s (plan #42434) Suite 1 bathroom is accessed via a pocket door, which costs more than a hinged door, but eliminates the door swing conflict potential for someone standing before the first sink. It also has the expense of an extra wall and door to enclose the toilet area, which many buyers value. Three-foot by five-foot showers are pretty much the minimum size today in suite bathrooms. Fortunately, that’s a standard size for shower pans, eliminating the expense of needing a “job-built” shower. An alternate layout loses the private toilet area and some linen storage in favor of adding a soaking tub (and some expense).

Cedar Ridge - #42434
Cedar Ridge - #42434 alt bath

Fireplaces. As shown in the Moss Bluff II (plan #43066 below left), fireplaces positioned inside the home avoid the expense of having to trim around the bump out of a fireplace on the outside (example Portsmouth – plan #8638 – images below right). In addition, the dining area cantilevers (extends beyond) the foundation, avoiding an expensive foundation jog. And the large walk-in pantry provides the kitchen storage you want cheaper than adding expensive cabinetry.

Moss Bluff - #43066
Portsmouth - #8638 Elevation
Portsmouth - #8638 ML

Next time we dive deeper than the obvious when we address how the type and size of home influence its price.

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Cover photo: Perrypointe (plan #56399)

Without a Great Elevation, the Rest Means Nothing

Without a Great Elevation, the Rest Means Nothing

I first heard that truism more than 30 years ago, and home builders, real estate agents, and home buyers agree, it’s still true today. When looking to purchase a home, buyers often use the home’s exterior – and specifically its curb appeal – when deciding whether to consider that home further.

Style is perhaps the most obvious aspect. The three homes pictured below all share the same floor plan inside, but the different exteriors present their own unique appeals and cost-drivers.

Portsmouth - #8638 Elevation

The Portsmouth (plan #8638) may be referred to as “Traditional,” “Farmhouse,” or even “Craftsman.” It offers the simplest and likely least expensive rooflines, exterior siding, trim, and windows, but the covered front porch adds expense.

Woodworth - #8639 Elevation

The Woodsworth (plan #8639) exemplifies French Country styling and while it eliminates the cost of a front porch, its stucco exterior and sophisticated rooflines are pricey. Artistic touches such as the window brackets and shutters, the eyebrow louver dormer set into the roof, and the arched window in the front office add to the home’s price as well.

Collinswood - #8640 Elevation

The Collinswood (plan #8640) is a Craftsman-inspired elevation with a less expensive hip roof due to the lower pitches (slope of the roof) but there are wider overhangs. The home’s shake shingle siding, while a bit more than standard horizontal siding, is considerably less expensive than stucco. Still, the detailed windows and front porch with tapered columns add expense.

Rules of thumb regarding exteriors and new home costs. 

Rooflines. Gable roofs are usually less expensive than hips; complex roofs with multiple breaks add cost, and the steeper the roof, the more expensive it will be. Siding materials. Traditional siding is typically the least expensive, whereas masonry materials such as brick, stone, or stucco cost more. Windows and doors. Using standard sizes, configurations, and materials will save money, whereas more sophisticated design windows and trim details add cost. Porches and outdoor living spaces (front and rear). Such amenities add to the home’s appeal and to its price. 

Teglia Farm - #42482

The Teglia Farm’s (plan #42482) detailed elevation makes it stand apart. Board and batten siding, bracketed shed roofs over the garage door and front window, stone accents on either side of the garage door, and glass in the front and garage doors add to its appeal. But those charming details add cost. What would the home look like without those details? 

42481 Teglia Place

The Teglia Place (plan #42481) focuses on affordability – it has the same floor plan and the same basic exterior for thousands of dollars less. Still, consider resale value. The features that may attract you to the Teglia Farm over the Teglia Place would likely attract future buyers as well who are willing to also pay a premium for the home’s visual appeal. In a Design Basics’ April 2020 Facebook poll, 73% of the participants preferred the Teglia Farm over the Teglia Place.

Most people’s eyes go to the shed dormer above the garage, cedar shake siding in the reverse gable, and tapered porch columns atop stone bases when looking at the Keyser Springs (plan #35124). Would this home have the same appeal without those features? The Keyser Farm (plan #35123) shares the same floor plan and basic elevation, without the expense of the shed dormer over the garage or costly porch columns. But again, details matter, even if they add to the expense. With its pricier design details, the Keyser Springs home plan still outsells the Keyser Farm.

Keyser Springs - #35124

Keyser Springs

Keyser Farm - #35123

Keyser Farm

Garages.

Finally, garages can be another significant cost driver. The preceding homes all feature a standard 2-car garage that enters from the front. About the only difference there is the varying prices of the garage door styles. 

But some neighborhoods prohibit (and some buyers prefer to not have) garage doors facing the street. Having the garage enter from the side increases the home’s price due to having to add visually interesting elements where the garage door would have been facing the street. Compared to the front load garage Cedar Glen II (plan #42229), the Cedar Farm (plan #42385) has additional windows and shutters where the Cedar Glen II’s garage door was located. And, entering from the side requires a longer, more expensive driveway, unless you happen to have a corner lot.

#42229 Cedar Glen II

Cedar Glen II

#42385W Cedar Farm

Cedar Farm

Style…rooflines…siding materials…windows and doors…porches…details…garages…balancing these and other factors to achieve the look you want at the right price is one of design’s many roles. Another is the floor plans themselves, which we will look at next time.

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