Today's boom in home building is by-passing
millions of families who lack the money to buy the expensive
houses that most builders are putting up.
A new study by Professional Builder, a major trade journal,
finds that $81,000 is about all that most families
are willing and able to pay. A whopping 42 per cent of prospective buyers
are looking for something under $70,000.
Homes selling for less than $70,000 are a rarity in many cities,
but substantial, well-built homes can be had for less than
that in many places - sometimes for a good deal less.
Buy
a "basic" house
It may not be the home of their dreams, but
many families are now settling for a "basic" house
- one that is modest in size and features - to be able to
enjoy the tax and
investment benefits of home-ownership.
In an attempt to slash prices, builders in several cities
have eliminated the family room, extra baths, the garage and
certain appliances. Many are going to standard sizes in windows,
doors and other materials to eliminate waste and are using
more factory-built parts to cut costs at the home site. The
result is a price tag below $70,000, sometimes even below $50,000,
on these houses. Wherever the models are offered, buyers are
snapping them up.
Put
in "sweet equity"
People who make the effort to acquire new skills find that
they can pare thousands of dollars off the cost of a new home
by doing much of the construction work themselves. These families
are linking up with builders who erect only the shell of a
home - exterior walls, roof, interior studs and subfloor.
Financing is sometimes a problem for people who want to try
sweat equity, because many lenders will not grant a mortgage
until a home is completed. Jim Walter provides its own financing
for do-it-yourselfers. The term of a loan is 15 years, and
the interest rate is about 11.5 per cent - well above the 9
per cent charged on conventional mortgage loans. And buyers
are expected to own their building lot free and clear.
Fix up an older house
While existing homes often are priced as high as new models,
some families get over this hurdle by buying older dwellings
in marginal neighborhoods that have a solid chance of reviving.
Many such neighborhoods are benefiting from major renewal
projects, and a number of cities have earmarked thousands of
dollars of local and federal funds for home-rehabilitation
loans and for improvement of streets, parks and other community
facilities.
Consider a mobile home
With the prices of regular homes soaring, more people are
choosing a type of shelter that they might have snubbed in
times past: mobile homes. The only moving of most of these
homes nowadays is from factory to owner's site.
Not only is the quality of factory-built homes improving,
but the price gap between them and conventional housing is
becoming wider every year. A site-built house costs almost
twice as much as to produce as a similar mobile unit.
One
of the fastest selling types of mobile homes is the "double-wide," which
is made up of two sections bolted together. Placed on a concrete
foundation on the home site and provided with a pitched roof,
aluminum siding, shutters and downspouts, the double-wide often
is indistinguishable from a conventional dwelling. Yet the
price is generally less than $45,000.
The manufactured house is not welcome everywhere, however.
Some communities have zoning laws and building codes that prohibit
such shelter. Mortgage lenders are frequently skeptical, and
labor unions in certain cities object to the manufactured homes.
Still, most of these roadblocks are not as big as they were
just a few years ago, and experts predict an expanded market
for mobile homes as the price of conventional housing soars.
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SolveYourProblem.com : 2007
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