Every now and again on our blog a debate about new vs resale pops up. One such discussion relating to condos the other day made a light bulb in my head go off.
In the recent past there have been plenty of law suits from recently completed condo projects; the new owners of projects around Edmonton are suing the devlopers who built the projects. It doesn’t take me long to think of a few such projects. These law suits take years to get sorted out…
These law suits occured in an environment where the builders should have been able to build a decent project (wages were reasonable, tradespeople were well trained and available to work, projects went up in a reasonable timeframe, materials were affordable etc). Overall it was a great environment to build a complex (I'm talking about pre-2006) but there were still problems – leaky roofs, flooded parkades, mis-representing specs, building code issues etc…
Which brings me back to the light bulb that went off… What about those projects that were put up at the heat of the market, when skilled labour was hard to find and keep? And now, what about those projects that were conceived started with different revenue projections? With the current environment such that it is, will there be more developers being sued?
Time will tell, but I fully expect to see more statements of claims listed in the condo document packages of recently built complexes in the near future.
Maybe there is something to be said for the tried and true complexes that have been around for awhile and have (hopefully) their major issues behind them.
I couldn’t agree more – when I bought last year I wouldn’t go near anything built from 2003-present. Bought a 1994 built condo and so far so good.
Meanwhile, friends of mine who bought brand new homes and condos have had issues with their structure and had to contact the builder on a few occasions… – yikes!
Last year, we looked at a significant number of never occupied high-end single family homes for which construction started in 2006/2007.
While the showhomes put their best foot forward, many of the other homes displayed an amazing lack of finishing skills in the woodwork, the tiling, the installation of cabinets, etc.
I prefer not to think about the less visible but much more critical elements, such as framing, electrical, plumbing…
Who was supervising the scores of high school drop-outs and other novice “craftsmen” who got hired quickly – and then fired first, when the construction boom came to an end?
As much as I like many of the architectural features of these homes (other than the napkin-sized lots), I will happily let others deal with the inevitable issues and stay clear of anything built during the boom.
Nathan from my office forward me the AB new home warranty buyers guide for buying new condos. Its only 112 pages, but does have some good information if anyones looking for a new condo they may want to check it out.
There are a number of very good and thorough guides on the Alberta New Home Warranty web site at: http://www.anhwp.com/key.html
really, anything after 2003 shouldn’t be trusted? I was thinking closer to 2006? just can’t believe how frustrating home shopping is in even in this market! the only thing in our price range are those really new homes of course who’s quality we doubt, or really old small homes in questionable neighborhoods….what to do….we haven’t started looking seriously yet, but a couple of friends who are looking are telling us that home owners are generally not ready to budge on prices that are not reasonable, so once again, we’re left with those brand new homes.
Would now be a better time to buy new homes with most temp workers being laid off and a lot of supervisors left to do all the work?
I know most companies in Vancouver construction have only kept on their most experienced builders and let all of the fly-by-night labor go.
I believe so. I believe you’re going to see improved quality and innovation. Look for smaller players who have great quality in their work to grow as some of the bigger boys have some pretty hefty debt and operating costs that will make it hard for them to compete. (Excepting economies of scale of course).
I think alot of new housing companies will form or alot of the smaller builders will grow as Developers will begin to open up their subdivisions to other builders not in their builders group.
I see alot of signs in subdivisions around edmonton that say “Lots for Sale”. The opportunity to buy residential lots has been greater than ever.
These small builders do not have high overhead costs because they do not have a large staff. Their margins could be better. But then again, like Sheldon said, when you factor in economies of scale, they might not have the negotiating power that the Jaymans and Daytona’s of the world do.
As a side note, I occupied a brand new house in October, and I noticed a crack (diagnol)above my ensuite doorway…on both sides of the wall in the same location. I dont know what to make of it….
But rest assured it’s going on my list for the 3 month warranty walk through!
Don’t rely on National Home Warranty to fix anything. They won’t. Just ask anyone who has bought a new home in the last year or two (like me). If NHW were to repair all the mistakes that the so-called “tradesmen” created they’d be bankrupt within a week.
So they will use their standard line, “That’s not covered under the warranty” or “That’s not considered to be a defect” and hope you don’t argue with them. They love it when the original owner moves and sells the place. Then they’re off the hook.
Forewarned is forearmed. Take it from one who has been through it all.
would a good inspection prior to purchase uncover these problems?
It could and certainly couldn’t hurt
Sent from my iPhone
It means Realtor are not going to sale newly made condos?
I’m not sure what you mean. If you mean that REALTORS can’t sell new condos that is inaccurate as most projects have a REALTOR involved in the project management. Many are listed on MLS and some are actually good complexes.
Rhettro & realty junkie: New construction can settle, cracks happen and will be repaired, contact your builder at the 10 month point (or whenever they have specified) and they will come and fix it.
Oh, and btw, there are deals to be had by brave purchasers right now. We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. – Warren Buffett
G: Read the docs, it’s all in there, what’s covered and what’s a defect and what isn’t. A good reputable builder will look after you…and the wait times should be shorter now with more tradespeople available. When building/buying a new home or condo choose a builder that’s been in Edmonton 20+ years, member of Alberta New Home Warranty (builder has to prove and maintain more) and who has a good reputation. Price isn’t everything. Quality takes time and money. Choose a smaller home with less upgrades and a better builder. Buying new gives you choices you can’t get with existing…and there isn’t someone elses toe nail clippings in the carpet.
I concer Condo Salesperson – most builders I’m sure will come back and fix any problems – but this is a hassle that I don’t want to worry about. Hence my choice to purchase something a little older….
Just who are the better builders?? I just checked out Bedrock homes in Schonsee, the prices seem too good to be true. Does anyone have any dirt on these guys?
Lando: Usually if it sounds too good to be true….but right now builders good and not so good need to move product…hence the good prices. Bedrock is part of Carrington who has deep pockets and has been around for a long time. (I don’t work for them btw.) If it meets your needs and you can afford it (if you are looking you should be fully pre approved) then make an offer. If it’s standing inventory have it inspected. Bedrock and other solid builders will make it right.
Hey guys, nice stuff! i admire your blogs,bloggers will always keep in mind that visitors can check out their site,and thanks for having you as one. Keep up the good work.
-stephen-
even if a new home is built to good standards – would it be considered a good investment in terms of resale? when i see 30 of virtually the same home in the same neighborhood for sale, it makes me wonder if i were to buy a new home now, what are my chances of selling it in the future – esp at a good price.
any thoughts?
Show me a neighbourhood with 30 of the same homes for sale. That is not a good area to invest in. There are deals on the resale and new home side of things. You just have to know what your looking for. If you’re going to look at something new for 430 you might as well compare that to 460 on resale and you’ll see you’ll more than likely get a property that is higher in quality and finishings, landscaped, with a deck and fence, has all the window coverings, and all the appliances. There are many areas where there are only a few homes for sale. Good luck
I’m thinking of neighbourhoods like Rutherford in SW edmonton, there are a ton of similar 3 bedroom 2 story homes there for sale right now. some really good deals for the square footage etc, but makes me think i’ll never be able to sell in a few years when it’s time to move on…..
any one have anything to say about pacesetter homes? they have a few great deals out there right now on spec homes….
For me, I won’t get an old condo, I’d rather choose a new one. As long that I am satisfied I will never object about it. Nice post!
Filicity