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Will it hold its value? Like Dave said, really depends on the location and schools. Lots of people hate tract homes and won't consider them; others will ONLY consider them because they want "new" and the neighborhood planned out for them. In my own area, I've seen locations where they are hugely popular and just a few miles down the road looking like they need to be torn down only 25 years later. If a home meets your needs now and for the perceivable future, if it is in a neighborhood with schools and amenities that you desire and you are financially stable enough to do it, then go forth and don't worry about the "tract" stuff.
I'm not really clear by your "tract home neighborhood" concerns - most new construction neighborhoods are built by one builder, or in a community like mine (planned urban community) multiple builders throughout the larger area.
I would check to see what the reputation is of that particular builder for the quality in general, but my house is anything but builder grade despite being built by a tract builder. Like most of my neighbors, I put in a lot of upgrades when building and on my own after (just had a Trex-type deck installed for instance) and because it's a more upscale neighborhood, the builder included many construction upgrades too. So my house is much nicer than the same exact model built by the same builder in a different, less upscale neighborhood a few miles away.
As far as holding value, my house was appraised last month for a re-fi, and came in at 20% more than I had paid in 2014 (closed in November, but my purchase price was set in June when I signed my contract - by the time I closed, it had already increased in value according to the pre-closing appraisal).
I'm not familiar with the Charlotte burbs. But I know that in the Southern city I used to live in, we saw tract homes in two scenarios: urban revitalizations in the downtown core and in the the exurbs of the city to accommodate new population growth.
In the latter scenario, the concern is that a builder could put up another development a half-mile away and then you would be competing with new construction if you ever decide to sell your home. And when the market turns (as the market inevitably will), people generally prefer to have a shorter commute -- so exurbs are less popular.
If neither of those apply, I wouldn't worry too much about it. You will need to upgrade -- but that's generally true no matter which house you buy. "Move-in ready" and "updated" just mean you don't have to do anything immediately. And a $400k house on a $200k salary means you'll have the wherewithal to put some sweat equity into the house.
Location: Foothills of Maryland Blue Ridge mountains
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Originally Posted by ea1420
If you like it and it has the amenities and location that you want that is all that really matters.
As others have noted no one has a crystal ball and can tell you the future of the neighborhood or resale value. Where I live, there are neighborhoods that were highly undesirable 5-10 years ago, that are now very desirable. There are other areas that were nice that have gone down the tubes. It's kind of a crap shoot to some degree.
One thing you may want to consider is where the school boundaries are in the area. The last house I owned, when I bought my house within the boundaries of the best high school in the district, but over time they changed the boundaries, and suddenly my house was located within the worst high schools boundaries. Granted, I was still in a good school district (and the high school wasn't bad, just not coveted the way the other high school was) but the boundary change compounded the neighborhood changes and hurt the value of my home.
I also know of many people who have had their home values impacted more significantly because they were on the edge of a great school district and the district lines changes and it resulted their home being located in a subpar district. So I would check the school boundary lines carefully.
This is important.
Walk your prospective neighborhood several times. Talk to neighbors and ask about the schools and if there have been any boundary issues. Don't stop there. Call the board of education and ask about school boundaries. Are there any changes being put forth?
I think it would be great for your kids to live in a solid neighborhood with good schools. If the schools wont be changed, I don't see the downside to this.
We live in the Charlotte NC area. For the last 6 years we have lived in a 2,300 sq foot, 4 bedroom, 2.5 bathroom home.. We have two young kids and are planning for a third. The home was built in in 1986. We've done a lot of minor upgrading-- all countertops, master bathroom Reno, modern neutral colors. We bought when the market was down at 180k and now our realtor anticipates that it will turn quickly for 230k.
We are moving because we
-Want more space. The floor plan is very closed off and the kitchen is tiny. A full kitchen Reno or changing the floor plan would be so expensive (we looked into this) and still not give us a truly open concept. Also we would never see that money back in this neighborhood.
-We loathe yard work. Our current yard is large (.3 acres) but it's a huge pain to maintain, not grated (slopes and hills everywhere) so the kids are always in the road or on the deck anyway. And with the southern exposure it gets hot sun all day and the grass it a huge pain to maintain.
-We have much better jobs. We used to make 70k a year combined when we purchased. Now we make 200k.
-We want to be in a smaller school district with highly rated schools.
-Our current neighborhood has no HOA and it shows. Lots of houses are downright dumps. Since the market has come back it's improving, but not great.
We have saved 80k to put down on a new house. That's without the equity of our current home.
We found a tract built home in a perfect location, school district we want, and an awesome neighborhood with amenities. It's a 10 year old John Wieling home and we LOVE the kitchen, floor plan and hardwoods throughout. The yard is managable, grated and fenced. It's definitely closer to our neighbors, but the community is wonderful and kids always out and about playing. 3,500 sq feet, 4 bedrooms, 3.5 baths. Asking 400k. It's the "smallest" floor plan house in a really nice neighborhood.
Here is my question: is this purchase wise? I never thought we would be in a tract-style neighborhood and the house needs no immediate updates. Over time, since everything is builder grade, things will need replacing. Do these type of neighborhoods hold their value?
We have no desire to renovate. We just want to live there and enjoy our kids. This whole process is just so overwhelming and we are soooo financially cautious. Would love an outside perspective on this that isn't family.
How much are you guys socking away? If the worst happened could you afford this house on one income? Are your careers so good that you can walk into employment somewhere else?
I'd probably make the move, but I would tighten up my money to make sure I have a nice little nest egg for the just in cases...that happen.
There is no universal "tract home" neighborhood. Tract homes can be at various price points - some modest, some high end. There are some tract home builders that are only high end. Worrying about a neighborhood due to it being comprised of tract homes is a needless worry. Tract homes built by reputable builders can be similar in quality to custom built homes. The difference, to me at least, is that tract homes are built using builder stock plans whereas a custom home is built using an architect's plans, or even the builder himself if he is a small outfit. The likelihood of someone picking your plan is higher in a tract home neighborhood. Often you don't get much customization, though the higher end tract builders do allow some. This difference doesn't apply to your situation.
It all comes down to your aesthetic preference that has nothing to do with the neighborhood or its value. Obviously, cookie cutter or not, the neighborhood is more well off. As davebarnes said, it comes down to schools, location, economy..not whether a neighborhood was built by custom builders or tract builders. If anything, you sound like the kind of buyer that would live in a master planned, tract community and that's not a bad thing. It's just a preference thing and by the number of people living in tract home neighborhoods, you're not alone. You want a small lot, big house, and newer finishes...the type of buyer that's often attracted to tract home neighborhoods.
Tract home or not, you're leveling up moving from a more modest price point to a higher one. We did a similar move and I can't lie...there's a difference. I hate to say this, but the people in the higher-priced neighborhood have a different mentality. Yard and house maintenance is expected whether you do it or hire someone else to do it. One can't predict the future (i.e. school rezoning, which can be catastrophic) but at ten years, that neighborhood is probably going to hold its value at least somewhat.
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