If you’re interested in living in Denver’s Central Park, you have options.
Resale home in one of the more established neighborhoods?
Or a brand new home in Central Park’s last neighborhood, North End?
There are pros/cons associated with both options. But let’s talk about the question you really want to ask:
What’s cheaper?
I get this question all the time from our friends and clients. Most of our realtors at Focus went through the same pricing analysis when they bought their homes. Ashley Parsons Faller purchased a resale in Eastbridge, as did Joe Phillips in Central Park West and Lisa Palladino in Willow Park East.
Kailee Ackerman on our team recently built a new Lennar in North End, while my family built a Parkwood in Conservatory Green. So we’ve been there!
Before I answer the question, let’s talk about new home pricing. The pricing of resale homes is easy enough, but new construction pricing can be challenging.
Homebuilders often market their new homes using just the base price. A builder website might say: “Starting in the low $500,000s.” Or perhaps you’ve seen: “Priced from $600,000.” The final, all-in price of a new home can often be $100k+ more than what’s advertised.
If you’ve chatted with a builder’s sales representative, you’ve probably been able to get a very general ballpark price estimate of what their homes actually cost.
So how much does a KB, Parkwood, Infinity, Thrive, Boulder Creek, Wonderland, Brookfield, Lennar or David Weekley *really* cost?
Here’s generally how to price out a new construction home:
(1) base cost for your floorplan
+ (2) lot premium
+ (3) structural and design upgrades
– (4) lender and other incentives
= All-in home cost.
The problem? While your realtor can get you some of this information, unfortunately (3) is often unknown – even for the builders.
Before you sign your contract and start the new construction process, your builder doesn’t know which structural upgrades you might fall in love with, and they certainly don’t know what you’re going to pick at the design center months after you’re under contract. Perhaps you’ll spend $30,000 on structural upgrades and design center costs. Or maybe you’ll spend $100,000.
Ultimately, new home pricing is TBD. So how do we answer our original question – which is cheaper?
Until recently, based on helping hundreds of clients buy and build in Central Park and similar new home communities, and speaking very generally and knowing there are many exceptions, I can say that for our clients who built the past few years, new construction tended to be slightly discounted relative to resale home pricing for the same builder/model/finishes/amenities.
I used to call this the “patience discount.” Central Park’s builders had hundreds of lots to sell in Northfield. Construction times always vary, but a 6-18 month wait time for a new home can be a long time to wait. Or you could purchase a resale and close in about 30 days.
So the builders had two disadvantages – a lot of inventory and longer wait times. Not always, but this often translated into lower pricing for a new home.
How about today?
Oh how things have changed! For new construction, there’s only one neighborhood left, and those lots have started selling – fast. Once they’re gone, Central Park is done with residential development, outside a few infill projects. Our brokers talk to the builders weekly and what we’re hearing is that lot premiums, base pricing, and more are going up.
We’ve had a number of our wonderful clients (15+) sign contracts to build in North End the past 90 days, and pricing is increasing. I expect this to continue. (We can give you the latest detailed pricing information we have, by the way – just email!).
Meanwhile, resale home inventory is exceptionally low. As Joe Phillips mentioned in his real estate update last week, there were only 16 active listings on the MLS in Central Park. For context, the neighborhood has roughly 9,000 homes. Yikes!
We’ll have to see how new home and resale pricing trends in the new year, but I wouldn’t be surprised if we soon hit a sort of equilibrium, where there’s so much demand for any type of housing and so few options that both resales and new homes are roughly the same price for the same product/upgrades/amenities. You’ll need to dig in more than you ever have with your realtor to figure out what the best option is for you, but I think it’s becoming safe to say there’s no “patience discount” in Central Park these days.
Here at Focus we’ve helped over 150+ of our wonderful clients budget for, design, and build homes around the Denver metro. We’re also a full service brokerage that lists and markets homes for a 1.5% listing commission and have helped hundreds of resale sellers and buyers.
If you’re thinking about building a home, I’d love to chat and walk you through the costs and process! [email protected] or shoot Joe Phillips, Amy Atkinson, Ashley Faller, Lisa Palladino, Kailee Ackerman, Stacy Grissom, or Whitney Barnett an email if you’d like more information.
Also, don’t miss our article Why hire a realtor for your Central Park new build? if you’re curious how we as realtors fit into the new construction process – and what the cost is.
Last but not least, check out these recent Scoop articles if you’d like to learn more about what’s available in North End:
Lennar Next Gen Model Home Opening this Sat 12/19 in North End by Appointment Only (Kailee)
The Scoop on Wonderland Homes Fall 2020 (Lisa)
The KB Villas in the Final Phase of North End Are Here! (Ashley)
