How to Find Affordable New Construction Homes for First-Time Buyers

Steve Houck (00:00)
And one of my main focuses is new construction, which accounts for about 50 % of my business.

Okay, there’s a lot of opportunities for buyers out there in new construction. Builders are offering what we call buyer incentives, which means you can get stuff that doesn’t come with a house, or they’ll pay extra closing cost, or you can buy your interest rate down.

There’s a lot of opportunities out there in new construction and builders are hitting that pretty hard. I’ve got one builder that’s offering $20,000 in buyer incentives. And another plus for the buyers is our inventory is growing rapidly. We had a shortage, an extreme shortage in 21 and 22, but it has bounced back and now the buyers have got a lot more homes to choose from.

Erika Proctor (02:21)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m thrilled to be joined by Steve Houck, who is an expert in real estate, has a big background in construction. Steve, it’s awesome to have you on the show today.

Steve Houck (02:37)
Thank you for inviting me. I’m honored.

Erika Proctor (02:40)
⁓ well, we are thrilled and let’s dive in because our listeners want to know more about you. Steve, how did you get started in real estate and construction?

Steve Houck (02:51)
come from a background in the retail clothing business and ⁓ when that died off, it was a large independent retailer which don’t, they don’t exist anymore. When that died off, I wanted to stay in customer service because that’s all I knew. So I got my real estate license 26 years ago and have been practicing ever since and I love my job, I must say.

Erika Proctor (03:15)
Yeah, yeah, that’s awesome. Within that, what is your main focus these days? Like what markets are you working in?

Steve Houck (03:22)
Okay, I’m in central Mississippi, primarily in the Madison and Rankin County areas.

And one of my main focuses is new construction, which accounts for about 50 % of my business.

Erika Proctor (03:36)
Yeah, that’s really cool. What kind of trends are you seeing in new construction?

Steve Houck (03:40)
Okay, there’s a lot of opportunities for buyers out there in new construction. Builders are offering what we call buyer incentives, which means you can get stuff that doesn’t come with a house, or they’ll pay extra closing cost, or you can buy your interest rate down.

There’s a lot of opportunities out there in new construction and builders are hitting that pretty hard. I’ve got one builder that’s offering $20,000 in buyer incentives. And another plus for the buyers is our inventory is growing rapidly. We had a shortage, an extreme shortage in 21 and 22, but it has bounced back and now the buyers have got a lot more homes to choose from.

Erika Proctor (04:23)
Yeah, yeah, new, you know, new construction, there’s a lot that goes into it. The zoning, the permits, the regulation. What have you learned over the years about that process and how do you make it smoother?

Steve Houck (04:35)
Well, ⁓ actually the permitting part is pretty easy. Basically what you do, you take architects plans in, they approve it and ⁓ give you a permit. Now, there are some pitfalls and some things you would consider to be very minor and they’re not. Buying water meters.

Electric meters, right now they’re having a shortage of people at the local electric company. They don’t have enough employees. So I might have to wait. Where I used to be able to get an electric meter in a day, ⁓ now it takes two to three weeks sometimes. So you can’t order it until you have an electrical inspection. sometimes that part can be pretty difficult.

Erika Proctor (05:29)
Yeah, yeah, I can see that. Now, with your experience in new construction, do you see things that you think other people might overlook, like a land or a project that because you know what you know in new construction that there’s an opportunity that other people might overlook?

Steve Houck (06:37)
definitely. ⁓ Number one, I’ve had two agents contact me lately and say, Steve, I know that you know about houses that are not in the MLS yet. Could you tell me about them and show them to me? So yeah, see these homes don’t get on the internet until they’re complete. Well, I might be two weeks from completion, which the buyer can see what’s there. It’s not fully complete, but

they can tell whether they like it or not. So I’ll show them the homes and I’ve sold two lately ⁓ just like that. And then plus my experience, I know what goes into these homes and I could recognize the difference in qualities that a buyer may not

Erika Proctor (07:21)
Yeah, that makes a lot of sense. know, Steve, we have a lot of investors that listen to this show, and I’m sure as you’re familiar with, new construction can be capital intensive. How ⁓ would you recommend investors finance these projects and what kind of advice would you give them?

Steve Houck (07:39)
Okay, I work with some investors. Now, my investors are mostly not buying new construction. ⁓ They’re buying homes that have good bones, but maybe they’re dated. Maybe it was an older couple who lived there and they lived there since 1970 and never did anything to update the house. So they buy the homes at a reduced price and update them and flip them. ⁓

There have been a couple of investors that have bought new construction homes ⁓ in order to ⁓ rent them out and have a rental income. Now, that’s a good thing.

Erika Proctor (08:18)
Yeah, yeah. Steve, are you involved in any real estate networks? And if you are, what kind of advice would you give for people looking to build their own networks?

Steve Houck (08:28)
⁓ Yes, ⁓ I have a couple of things. My ⁓ AI group that I belong to ⁓ has a real estate broker network and they extend all the way from Hawaii to Guam. So there’s like when we have a zoom meeting, there’s normally about 50 or 60 people that show up and ⁓ we talk about different

projects, hard things in real estate, easy things in real estate, how we use tech in real estate, how we market to our potential clients and that type of thing. So I enjoy that. Now we have some smaller networks that are like referral ⁓ companies.

And we’ll have Zoom calls, but see these other Zoom calls that I was speaking about, we do that once to twice a week, where these others come up about once a year and we just share our opinions on how we ought to operate this and how we should communicate our basic

Erika Proctor (10:13)
Steve, can you share a specific connection or opportunity that came from your network that affected your business?

Steve Houck (10:20)
yes. ⁓ Now this technically is not a network, it’s social media, ⁓ the LinkedIn ⁓ format. I’ve had several people contact me just recently saying, I’m not in the market now, but I will be soon. Show me what’s out there. And then over the years I’ve had buyers and sellers that would ⁓ come in from there. Now, as far as my network, my AI people,

⁓ I have not gotten a referral from them, but other people within the network have. People moving from, like for instance, there was one gentleman that was moving from California to Arizona. And ⁓ one investor that wanted to buy property in Hawaii. So people referred people back and forth that way. But I haven’t had any of them ⁓ coming to Mississippi. ⁓ I am a member.

of realtor.com, homes.com, and several others like that. And I have received a good bit of business in the past year from the larger ⁓ sites there.

Erika Proctor (11:31)
Yeah, that’s really great, Steve. When we were talking earlier, you were sharing with quite a lot of excitement about what’s going on in the Madison area of Mississippi with the market. Can you share more about that?

Steve Houck (11:46)
I surely can, because this is huge. ⁓ This drives a lot of my business. I mentioned to you that Amazon was adding a $10 billion, B, not ⁓ billion dollar facility, and they’re bringing people in to run it. These people are coming in from out of state. Our Nissan plant is expanding, and we’ve got several high tech companies that are coming in and bringing people with them. So.

All this, they’re looking for our area which has a lower cost of living than most places, lower crime, lower expenses. Because you really don’t, in my opinion, you really don’t need private schools if you live in Madison or Rankin County because the school systems are rated so highly. So these people are looking to have their budget get stretched a little bit.

⁓ farther, and they did.

I do need to tell you this. This was a couple of years ago. I saw an article in Realtor Magazine and it showed the cost of buying a home based on average income and average home price. And at that time, we were the number two ⁓ lowest. Youngstown, Ohio was number one.

Our area was number two, so I was very proud of that.

Erika Proctor (13:10)
Yeah, yeah, that’s, that’s definitely good for affordability for people. Steve, what do you see next on the horizon? Is there a goal or vision that you have in mind?

Steve Houck (13:21)
yeah, every year I write down my goals and I look forward to the next year what I would like to see happen. And ⁓ that is I would like to see more homes, new construction homes built that are in the price range that the average person could afford when they’re just starting out. ⁓ First time home buyers. I see a huge potential there.

⁓ if we could give them more affordable housing. Now not low quality housing, ⁓ that’s out there. But I’m talking about good quality homes for ⁓ first time home buyers that they can actually afford. ⁓ If we expand that part of the construction business, that would be huge. Also, now there are more of

mortgage programs out there than they’ve ever been in history. that’s going to help us a lot because it’s giving the buyer a choice. In other words, instead of saying, okay, you’re going to either go conventional FHA or VA, those are your choices. No more. They’ve got all sorts of programs anywhere from ⁓ the first time home buyers zero down payment plan.

all the way up to the jumbo loans for the people buying million dollar homes. There are more options and programs out there for it.

Erika Proctor (15:29)
yeah, that’s really awesome. like we were talking about earlier, there’s so many opportunities out there for people.

Steve Houck (15:36)
yes. And I mentioned before that our inventory is growing. Now, country as a whole, the inventory is growing, but more so in ⁓ Mississippi, Alabama, Florida, and ⁓ Louisiana. Those states, the inventory is growing faster than in other ⁓ parts of the country. So,

There for a while, if somebody was in a particular price range and was looking for a particular type of home, ⁓ I might have three homes to show them, and that’s it. Now, I can show them for days. that’s very good for buyers because they’ve got a much wider choice than they did even a year ago.

Erika Proctor (16:24)
Yeah, yeah, absolutely. Steve, this has been an awesome conversation for listeners who want to connect with you or learn more about your work. What’s the best way for them to reach out?

Steve Houck (16:36)
⁓ yes, I love to talk to people, but I do communicate with text too. 601-942-2683. My email is easy to remember. It’s my name, Steve at stevehawk.com and my website, you can contact me through that, realestatepartners.info.

Erika Proctor (17:01)
Great. Steve, thanks so much for your expertise and insights today.

Steve Houck (17:04)
Thank you, Erika. It was a pleasure.

Erika Proctor (17:06)
And listeners, if you enjoyed this episode, make sure that you’re subscribed to the Real Estate Pro Show. We’ve got more conversations coming up with experts like Steve. Until then, keep building your real estate dreams. We’ll see you on the next one.