Increasing competition, tightening profit margin, access to consumer lending has forced new home builders , smaller Scottsdale area builders, to the larger new York stock exchange public builders to rethink and take a sharper pencil to their costs to find profits (or minimize losses).
How are the Home builders constructing homes cheaper and better ?
The layman’s language is Build my Phoenix area home with the same quality, functionally, and safety, with modern materials for less.
The industry term is what is known as “Value Engineering” and is presenting a unique opportunity to the Pheonix area buyer.
What is it ?
Value Engineering , as it relates to Home building, is an analysis of the cost of building home and how one can reduce cost and provide an equal product at lower cost.
Primarily, this is done in 2 main areas.
1) Removing what is desired and wanted (luxury items) versus what is necessary and functional without sacrificing the overall quality of the home , thereby passing on the cost savings to either the buyer or the builder. and (hopefully) pass on the value to the consumer. This is an elegant way of saying get rid of the bells and whistles, passing on the savings to both the builder and buyer make homes more affordable.
2) Re-Bidding of Trades – due to less home building, there are more contractors and suppliers for less customers , New Home Builders are going back to their suppliers, etc.. and asking them to quote a new (and lower) price and bid against competitors , in a sense, if you cant build for less, than I will find someone will ! (and they will!) .. this cost reduction in development costs allows builders a little more room to lower pricing
How do you win ?
In a seller’s market, what we saw in what now seems the distant past, Home Builders used this as a way to ‘Pad’ profits, today, in high inventory and dropping prices environment, this so-called “Value Engineering” allows builders to sell the same house for less passing on the value to you, the buyer.
——————————————————————————–
Copyright © 2008 By James Wexler, All Rights Reserved. *Build My New Home better and Cheaper, or I will find someone else who will!*
Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.
