Most people can easily understand the difference between a custom home builder and a production builder, but what about tract and spec builders? How do they truly differ from each other, and why is a custom home builder generally considered to be the best choice?

A Matter of Building Volume and Design

The residential building industry is cyclical for reasons that transcend economic conditions. During peak periods of housing demand, for example, production builders tend to be very active because they are able to add many housing units in a reasonable amount of time. In other words, production builders are able to stabilize the market to some extent.

Tract builders are high volume residential developers that can add single-family residences or condominium units very quickly and efficiently. Tract builders are experts at managing large projects and saving money with cookie-cutter floor plans; they can also reduce costs by cutting back on features and extras.

Betting on the Housing Market

Active housing markets are also stimulated by speculation, which is when spec builders come in. “Spec” is short for speculative, which explains the risk that these builders are willing to take.

Spec builders usually develop smaller neighborhoods where they can apply a certain architectural vision they hope will attract prospective buyers. Spec homes tend to cost a lot more than those developed by tract builders, and they tend to be driven by an interesting strategy of neighbor envy.

A typical move by spec builders is to enter a master-planned development experiencing demand. After some market research, spec builders choose a few floor plans that they can offer with extras and special configurations that merit a higher price. The idea is to develop with more aesthetics to provide higher quality of life and attract buyers who are willing to pay more than their neighbors.

The Role of the Custom Home Builder

New Home Under ConstructutionIf you want to own a property that you can really call your own, you should contact a custom home builder. As long as you follow the residential zoning laws and abide by municipal codes, you should be able to partner with a custom home builder who can bring your residential vision to life.

Large home builders these days may conduct tract and spec building operations and still operate a custom building division. Custom builders listen to their clients before presenting floor plan ideas. One of the immediate goals is to provide flexible choices that fit the budget of prospective home buyers.

The advantage of the custom builder option is that you get to be involved in the design and construction process as it is being developed. Unlike with tract and spec builders, you can influence the finished property according to your needs.

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