Did you know that builders have been building model homes since the end of WWI? Back then they were used to educate and enlighten a cash-strapped consumer on the joys of homeownership…not all that dissimilar to how they’re used now!

Today’s model homes are more aspirational, usually decked out with the finest appointments, finishes, and decorator touches. But is building these walk-through showrooms still a smart investment for builders?


What Today’s Buyer Wants

Over 16% of U.S. home buyers in 2015 purchased brand new homes. Over a third of all home buyers that same year said the most important factor when looking for a new home was avoiding costly renovations. That’s good news, because nationally builders are selling about 510,000 new homes each and every month!

Today’s buyer is looking for convenience over investment. Scared off by their parents and peers’ underwater mortgages, millennials, in particular, want a solid investment in a community they actually want to live in. Enter: The Model Home.


The Model Home Surge

Model homes are usually the last to go in a development which, to some buyers, mean they’re a safe investment in an already-vetted community. Plenty of buyers are also under the impression that model homes can be purchased at a great deal – and they can, in some cases! – but in a seller’s market these properties are just as valuable to a builder as prime lots. In a seller’s market, buyers are also more likely to overlook some of the model’s less desirable qualities like overuse, proximity to neighborhood traffic, and personalized décor.

Many buyers are simply unable to overlook cosmetic deficiencies in a home like paint color, layout, and dated fixtures. A model home presents more than a good investment to this kind of buyer – it offers a way of life, tied up with a shiny new bow. There will always be buyers out there who prefer the off-the-rack amenities provided by a perfectly-decorated model home…and some will even ask to keep the furniture!


Building Model Homes as an Investment

In hot markets, homes in new developments often start selling out before they’re even built. The intensive branding process behind a new builder development means that with good marketing, potential buyers will be more than willing to purchase the model if it means not missing out on their favorite neighborhood.

A fully-decorated model home is the key to getting traffic, attracting agents, and helping buyers understand what they’re signing up for when it comes to quality and craftsmanship.

As a builder, you’ll have to build on that lot sometime…why not now?