From The ValuVault: Why New Construction Valuations Are Tricky

Season 3, Episode 5: From the ValuVault – Why New-Construction Valuations Are Tricky

Why new-build numbers are hard to nail down

  • Comp desert. When the subdivision is still dirt, recent closed sales within a tight radius simply don’t exist. Appraisers either reach back in time or reach farther away—both weaken precision.
  • Upgrade overload. Builder price sheets bundle quartz counters, 8-ft doors, and smart-home packages that resell data rarely rewards dollar-for-dollar. (Your buyer pays retail; the market may only recognize “average-plus.”)
  • Shifting market wind. 2025’s slower 2.3 % home-price growth means yesterday’s pre-sales can overstate today’s value if demand cools before certificates of occupancy are issued.

Big-picture takeaways for your next deal

  • Buyers: Ask the sales office for every closed or pending contract in the same phase of the development—those are the best proxies for value.
  • Mortgage pros: Flag appraisals that omit on-site comps or ignore material upgrades; push back early before a low valuation torpedoes LTV.
  • Everyone: Work with an AMC that has a dedicated new-construction desk (yes, Nationwide does)—they know which cost items actually translate into market value.

Quick script for borrowers & builders

  • “Can you share the last three closed lots with the same floor plan?”
  • “Which upgrades added most value in your past appraisals?”
  • “If the appraisal comes in below contract, will you offer concessions or a rate-buy-down?”

🔗 Episode audio: ValuVault – Why New-Construction Valuations Are Tricky
https://rss.com/podcasts/valunation/2082692/

📚 Learn more: https://nationwideamc.com/solutions/new-construction/

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