There’s more than one ‘silver lining’ for those buying a newly-built home in the current buyer’s market. For the majority of American homeowners, the home represents their largest and most significant long-term investment.

Homebuyers who capitalize on the unprecedented new construction homebuying opportunities now available will reap the rewards of historically low mortgage interest rates, aggressively competitive pricing between builders, substantial savings on labor plus material costs and reduced energy/operational costs over the life of the home.

Local builders, suppliers and lending sources who have weathered market fluctuations over the years agree that for those in a good position to buy, it couldn’t be a better time.

Heart of Texas Builders Association (HOTBA) President Brad Alford, of The Alford Group, said home pricing in the Central Texas region has remained reasonably stable over the past few years. Reports from the Texas A&M Real Estate Center indicate that during 2008, Waco experienced positive job growth of 1.3% while the country as a whole lost more than 2.8 million jobs.

In addition, the Waco Chamber of Commerce is predicting $1 billion of new development in downtown Waco and along the Brazos River corridor over the next ten years—fueling the demand for new jobs and opportunities for area residents and service providers.

“Luckily, we’ve been a little more insulated in the Waco area market and haven’t experienced the runaway appreciation and subsequent depreciation that has crippled many real estate markets throughout the country. Waco’s future is bright—it’s growing and our job base is diversifying,” he said. “Right now, builders’ spec homes are taking longer to sell and builders are very competitive with each other. For those considering buying a new home, all the vital factors are in their favor. It is truly a buyer’s market.”

In the past year, builders have also cut back on the number of spec homes they build. Hart & Associates builder Gary Hart, developer of Harris Creek in Robinson, said there is not as much new home inventory currently available as the area as expected. “The inventory of new spec homes in the area is not as high as you would imagine,” he said. “As the economy and consumer confidence improves, I think we’ll see pent-up demand for new housing quickly absorb the existing inventory.”

“Overall, I think the builders in our area offer a great value, amazing amenities for the money. People moving in from across the country and from major cities in Texas recognize the value difference—in homes from 1,800-to 4,000-square feet and up,” he added.

On the lending side of the issue, local banking sources say they are eager to lend.

Ron Nelson, Senior Vice President of The First National Bank of McGregor, said he is encouraged that the local Central Texas real estate market has remained stable during this difficult national economic climate. “Mortgage interest rates are at historically low levels, making this in ideal time to buy a new home—as the economy recovers, the possibility of rising interest rates exists,” he said.

David Hicks, President and CEO of American Bank, N.A.-Waco, pointed out that local banks are well-capitalized, with healthy balance sheets and money to lend to qualified customers. “Besides the obvious factors of low rates and a buyer’s market, other incentives to buy a new home include recently announced tax credits for first-time homebuyers,” he said. “In general, I would say interim lenders are more comfortable financing new construction rather than pre-owned homes. While we can adapt either way, new construction removes the deferred maintenance risk plus it incorporates new technology and energy-efficient systems that result in a more predictable future resale value.”

Barry Gross, of Gross-Yowell Co., said lumber and plywood costs are down approximately 50 per cent from their height in late 2005, with prices down around 40 per cent on sheetrock in the same time period. “Right now, a new home is one of the best values out there—builders are very competitive and are passing the savings on materials along to their buyers,” he said. “The slowdown in building makes it more likely that the choice subcontractors are available, profit margins are narrow at every level.”

Foxworth-Galbraith General Manager Michael Newsom agrees that many suppliers are now operating at zero-profit levels and added it is unlikely that their pricing will fall further.

Area builders are also quick to point out the benefits of owning new construction rather than pre-owned homes. HOTBA builder and vice president, Warren Johnson, emphasized that new homes with advanced energy performance cost less to operate—leaving more discretionary funds available to homeowners each month.

Builder D.R. Horton Division Manager (N. Central Texas), Terry Stanley, said many first time buyers who purchase used homes are amazed at the repair and maintenance issues that they must pay for on their own. “New homes offer new everything—appliances, fixtures, air conditioning, etc. They’re in move-in condition without having to repair or replace anything—plus the buyer has the added reassurance of a limited warranty, mechanical warranty and structural warranty,” he said.

“The fact is that families need homes and that is not going to change,” said LuAnne Butler, Director of Construction and Design, Woody Butler Homes. What is true—there are great homebuying opportunities out there—and people are taking advantage of them.”

In the final analysis, home ownership remains the American Dream, regardless of economic conditions. The home is the hub of family activities and memories, a place to put down roots with a hopeful eye toward appreciation on financial investment.