If you have a steady job and can get a mortgage, there has never been a better time to buy your first new house. Why? In order to get their share of this shrunken market, builders of new homes are catering to the first-time buyers’ market.
The first-timers, meanwhile, are wiser shoppers than their parents, said Cheryl Bonk, vice president of M/I Homes in Naperville, which offers starter houses in St. Charles and town houses in seven towns in Kane and DuPage counties. “They know what they want, and it’s different from what previous buyers wanted,” she said. “They don’t want formal spaces like living rooms and dining rooms. The kitchen/great room is where they want the space and where they get upgrades if they can afford them.”
First-time buyers also are no longer looking at their first homes as temporary.
“They know home equity doesn’t appreciate like it once did, so they’re not planning to move up soon. They’re looking at their first home as a place where they’ll still live when they get married and have kids,” said Jeff Benach, co-principal of Lexington Homes. “They may not use the extra bedrooms now, but they say they will use them as kids’ bedrooms or playrooms in the future. In our Lexington Square (development) in Chicago, I think there are six pregnant women now.”
Tony Moy chose a town house in Lexington Square for its open floor plan on the main floor (the second floor). Then came the upgrades.
“Before I bought, I watched HGTV and kept hearing that the kitchen is where you should put your money,” Moy said. “So I upgraded the sink, appliances and cabinetry and made the island bigger. When friends come over, that’s where we spend all our time.”
Moy is single but wanted his town house to have enough room for his future family. “Right now, it’s too much house,” he said. “But when I get married and have a family, I’ll have the room and I won’t have to move.”
“First-time buyers want an open layout, and our floor plans reflect that,” Benach said. They dress their new homes with hardwood floors and granite countertops, he said. They tell him other features that can be easily changed, like lighting and plumbing fixtures, can wait.
Add energy efficiency to the first-time buyers’ checklists, Bonk said. “They ask to see utility bills,” she said. And higher gas prices make proximity to work or train stations important to them as well.
Moy echoed other buyers of his generation when he said he wanted a low-maintenance exterior.
“I don’t want to spend my weekends doing yardwork,” he said.
Inside, they want their places move-in-ready, Bonk said.
“They’re planning their weddings, working out, going to music festivals,” she said. “They don’t have time for home maintenance.”
“No fixing broken appliances, no mowing, no shoveling” were among Caitlin Butler’s demands when she and her husband, John, bought a condo at the Heritage of Palatine this year. “That’s not for us.”
As for foreclosures, some first-time buyers would rather take a pass. Katie Windelborn, who bought a tri-level spec house with her husband, Jason, in Poplar Grove (from Gerstad Builders in 2009), said the more they saw foreclosures, the more they wanted to buy new.
The pluses: a backyard for their two Boston terriers, an open floor plan and a kitchen that overlooks the family room. “Then, when we have kids, I can be at the kitchen counter and I can keep an eye on them,” said Katie Windelborn.
The couple also liked their house’s interior railings, which she said gave the home a more open feeling.
They compromised on upgrades to stay within their budget, Windelborn said. Now, they’re replacing products as they can afford them. “We took out the kitchen linoleum floor and put in a (wood-look) laminate,” she said.
The Butlers were glad to get a laundry room and heated floors, said Caitlin Butler. “We had these floors in our apartment, which was an R. Franczak & Associates building too. They save energy. There are winter days when the heat from the floor is plenty to keep you warm.”
Other features first-time buyers want arise from their baby boomer parents and big houses with rooms they didn’t have to share. “Even if they are a couple, they want their own bathrooms and closets, especially if they can afford it,” Bonk said. “If they have roommates, they want the second-master-suite option.”
Moy does not have a roommate now but added a first-floor full bathroom. That way, it could be a stand-alone rental.
The needs of buyers whose housing needs vary for cultural reasons also are starting to be met, although there is little evidence of it in the Chicago area. Nationwide, more starter-home builders are addressing the needs of the growing percentage of such buyers, said Stephen Melman, director of economic services of the National Association of Home Builders. Buyers who apply feng shui rules to their buying decisions, for example, reject houses that face oncoming streets.
“Hispanic households have an average of 3.54 persons, compared with 2.47 persons in non-Hispanic households,” said Melman, which prompts the need for more bedrooms for first-timers. There’s also more room for families that are more likely to have relatives from abroad stay for extended periods.
No matter the needs, plan ahead, advised the first-timers. “Buy a place that’s big enough to get you through more than the next few years but not so big that you’re heating and cooling a lot of unused space,” Windelborn said. “But make sure you have enough money left over to pay unexpected bills like the high electric bills from this summer’s heat wave.”
Although the National Association of Home Builders said 22 percent of first-timers have no down payment, Moy recommends waiting until you have enough money for the traditional 20 percent down. He lived with his parents while he planned and saved the cash. The result: He not only went into homeownership with his financial feet on the ground but was rewarded for his frugality with a low interest rate.
This story was first published on August 12 in the Chicago Tribune. This article from Tribune Company news outlets has been republished for additional education purposes. Please note that this editorial content was produced by Tribune news staff who are not employed by ForSaleByOwner.com or by Tribune Digital Marketplaces. This article is not affiliated with any links or products that appear on the on the same pages. Read more about our editorial policy.