Suburban Scene Is Pricey for New Home Buyers

Many home-buying experts talk about how to get a good deal, but choosing your first home should be a lot more than that. After touring more homes than you can count, it comes down to a gut level decision. Will the house and the neighborhood really feel like home, for years to come? Some first-time home buyers will load the shopping cart with additional upgrades and amenities to complete their dream home. The first-time homebuyer can learn a lot from this young couple who bought in a typical new-home community near Indianapolis.

Indianapolis is taking part in the nation's housing construction boom. Developers are gobbling up farmland as new neighborhoods sprout up like rows of corn miles from the city. The choices for home buyers are almost staggering. New communities are being built as fast as building permits can be obtained. In the first four months of 1999, 3,237 housing permits were issued in the Indianapolis area, 14.4 percent more than the same period during 1998, also a boom year.

The suburb of Hamilton County has exploded from a population of 108,936 in 1990 to about 163,000 last year. That's where the 234-home community of Spyglass Hills is being built. According to developer Paul Rioux, it's designed especially for families with young children. A 4-bedroom, 2 1/2 bath averages around $185,000. That's less than what many older, existing homes are selling for in the closer-in suburbs. There lies the dilemma. You may not like commuting from the outer suburbs, but you may get more home for your money.

Buying a new home really tests your resistance to temptation. Upgrades, amenities, and deluxe features can inflate the price tag in a hurry. Ask the homebuilder for a list of upgrades with prices so you can comparison shop among models. Remember that an upgrade to one model may be a standard feature on another. Amenities are sometimes paid for in cash instead of being included within the mortgage. In those cases, you'll probably save money buying a home equipped with the things you want as standard features instead of extras, so the cost can be financed. Before choosing options, find out what comes standard in a base home while shopping among builders.

Always keep your eye on the future. Although most upgrades add to a home's dollar value, definitely do not go hog wild on amenities that are just nice to have. Certain things such as fireplaces, ceiling fans, security systems, or a fenced-in yard with landscaping will probably add to your home's appeal. Certain other options such as swimming pools or hot tubs usually don't pay for themselves at resale. Consult with a real estate agent or appraiser, especially on the big-ticket items, to see if the particular upgrade is in demand in your region or neighborhood.

Here's what one couple recently added on to that 4-bedroom, 2 1/2 bath home in Spyglass Hills, starting at $185,000. The big-ticket items included a 1,100 square foot walkout basement, unfinished for $9,000; and a two-story deck for $3,300--probably smart things to add. The "small" stuff, however, such as the limestone address block ($175); double floodlight in the backyard ($90); and extra gas line to the deck ($100) added up quickly. Although many extras cost less than $500, they comprised a major part of the add-ons in the final price. This couple ended up at $235,000. That was $50,000 more than the base price.

Sources used to create this article include writer Bill Theobald and the Indianapolis Star/News.