Home market sees new generation of buyers

First-time buyers today are much different people than their parents were at the same age.

Many are single. Those who are part of a couple may not have children, and even if they do, both may work outside the home at full-time jobs, so their free time is at a premium.

They are accustomed to having active social lives that they don't want to sacrifice because of time or financial constraints. And many are used to instant gratification thanks to the immediacy of the Internet, cellphones and the fast-paced nature of today's world.

So the idea of buying an older home that may need work can be overwhelming to many of them. They don't have the time, money or patience to devote all of their weekends to rehabbing or upgrading their house.

That is why many first-time buyers are purchasing newly constructed homes and others are buying older houses in established communities that have been rehabbed top-to-bottom by a professional builder.

“In our business we call the purchase of a foreclosure or short sale home a ‘divorce maker',” Andy Konovodoff, president of K. Hovnanian Homes, said. “People buy these things for a great price, but even after they put $25,000 to $30,000 into it, they still aren't done.”

First-time buyers can have a difficult time searching for a resale home that is perfect for them.

“There are always the questions of how old is the carpet? And this bathroom is too small. Maybe we can move the wall,” Konovodoff said. “And then there are the hidden things that no one even knows about. It's a risk.

“With a new home people get their preferred floor plan at their price. They get to watch the home being built and spend about six weeks making all of their selections. They can even roll all of their amenities into their mortgage. If they added those things to an existing home, they would be pulling out their credit card for each item,” Konovodoff said.

Builders also are the ones worrying about the bank appraising a new house correctly.

“If someone tries to put in so many amenities that we think the home won't appraise out with the lender, it is our job to put on the brakes,” he said. “In addition, most public builders own their own mortgage companies, so it is totally turnkey. We help our buyers with everything.”

All of that has added up to a blockbuster spring for K. Hovnanian, Konovodoff said.

“We sold more than 35 homes in March alone.”

Katie Wallis and Frank Rafa also purchased a new home in March. They bought a four-bedroom house from Pulte Homes in Carpentersville's Winchester Glen community.

Wallis and Rafa expect that by the time they get married in mid-August, their home will be ready. The couple currently rents in Arlington Heights.

“We started out looking at used homes but then we saw some model homes in Carpentersville on the Internet, and when we went out to see them, we fell in love with the Wilshire model,” Wallis said.

“Frank and I love the idea of making our own home from scratch,” the British native continued. “We won't be replacing things and it even comes with a 10-year warranty. We also felt that in the new house we were getting a lot more for our money, like the open floor plan, fireplace, bigger island kitchen and master suite with walk-in wardrobe we wanted, along with other customized options.

“We did look at some foreclosures and short sales and we were willing to renovate a home, but why live in a mess and do all that work when you can get everything you want and have it all included in your mortgage? We honestly felt that we were trying to do enough this year without renovating a house, too,” Wallis said.

By purchasing a new house, she said, they are getting many more amenities than they would have expected to get in a first house.

Rob and Tiffany Czajkowski and their three young daughters moved from his parents' home in Hampshire to a new five-bedroom home in DR Horton's Cambridge Lakes community in Pingree Grove in January.

“We looked at both used and new homes last summer but we wanted our oldest daughter to stay in the same school, so the area where we could look was limited,” Rob said. “And the used homes we saw just didn't meet our needs. Many had very small rooms. The foreclosures we saw needed lots of work. Other homes had lots of land and I didn't want to spend all of my weekends working in the yard and around the house.”

So the Czajkowskis eventually chose the new DR Horton home, reasoning that by contracting to have a new house built, they would be able to pick out things that they really wanted in their home instead of eventually spending additional money to change the things they didn't like in a used house.

Molly and Scott Russell took a different route. They wanted a home in an established neighborhood in an older community after living in Lincoln Park for several years. Both are full-time teachers in Northwest suburban schools and she is pregnant with their first child.

“I am pregnant and we are both working, so it was not an option for us to buy a home that needed lots of work,” Molly said. “And we didn't feel that we could afford the kind of new house we wanted in Arlington Heights.”

So the Russells chose to purchase a newly rehabbed older house in Arlington Heights from Right Residential LLC. Run by Buzz Hoffman and Chris Shaxted, formerly of Lakewood Homes, Right Residential serves buyers who don't have the experience to research, buy and renovate a foreclosed home. The of Hoffman Estates-based company purchases sound, reduced-priced homes from lenders, fixes them up and offers them for sale at low prices.

Through Right Residential, the Russells were able to purchase a three-bedroom, three bath 1950s-era home that had recently had its kitchen updated with hardwood floors, granite countertops and stainless steel appliances; all new windows and carpeting installed; and a skylight added to the master bath. Much of the landscaping around the home was also replaced and a new detached garage with attic storage was built.

“It all feels so fresh and brand new,” Molly said. “We are thrilled with the home just the way it is now. It is perfect for us. There is nothing we have to do to it and it is close to work for both of us and close to my parents. The first time we walked in it felt like home.”

Eventually, she said, they may put more color on the walls, add landscaping and do window coverings, but there is nothing that needs to be done urgently.

“My husband says that he feels like he is on vacation living here. Moving into a recently-rehabbed home like this is just like moving into a rental or a new home. There is nothing you have to do except arrange your things,” Molly said.

Add to that an affordable price, good interest rate and a quick closing of only six weeks and the Russells are very happily ensconced in their “new” old home in Arlington Heights.

For more information about K. Hovananian Homes, visit www.khov.com; about Pulte Homes, visit www.pulte.com; about DR Horton, visit www.drhorton.com; and about Right Residential, www.rightresidentialllc.com.