Tract Homes: What Are The Pros And Cons

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Buying a new home can be a stressful process, both emotionally and financially. You may value a simple and cost-effective solution. A tract home is a property built as part of a larger housing development on a plot of land.  They are not that common, and if you happen upon one, you may ask yourself, “What are the pros and cons of purchasing a tract home?” We’ve researched tract homes from built to final purchase to get the information for you!

Tract homes are less expensive than traditional options because builders buy materials in bulk and make all the houses to the same specifications. Buying a tract home is simpler than a custom home because there are no decisions to make; the homes come pre-made. Tract homes come in large groups, so there is a lot of readily available inventory. The downsides of tract homes often include sacrificed build quality, limited customization options, and lower resale value. 

National builders will buy tracts of land and then subdivide them into smaller lots with homes to sell. When a tract home development is being built, it opens up many housing options in neighborhoods where you may be looking. Please read on to learn more about the building process, good and bad aspects of tract homes, so you’ll know what to expect if considering to purchase this type of home.

Bright suburb on the side of a hill facing the sun, Tract Homes: What Are The Pros And Cons

The Benefits of Tract Housing

A builder begins planning for a tract housing development by buying a large tract or parcel of land. They then subdivide the land into smaller parcels for homes based on their blueprints. The building materials are purchased in bulk quantities, and construction begins on several homes using the same basic blueprints for each. These homes are built quickly and appeal to first time buyers.

Because of the ability to buy and build in bulk, builders can usually offer homebuyers lower costs; tract homes are often cheaper per square foot than any other traditional home style. Builders create relationships with supply companies, so they get exceptionally lower prices. For instance, a whole tract housing development can use lumber from one supplier or windows from one company.

Builders of tract homes also save on labor costs because each home is built nearly the same. Simple, uniform construction means workers can cut down on wasted hours. All of these cut corners lead to lower costs for you. 

American suburb housing in the sunset

Consistency is Key

Quality is consistent throughout tract communities. Everyone gets the same standard of living throughout the neighborhood. This also means that the home values are easy to determine in the future for resale and that all of the homes maintain equal values to one another over time. Tract homes can retain value based on each other and not the greater area surrounding the development.

Tract homes in one developed area all benefit from standard feature upgrades that the builder has planned. For example, a front porch or back deck can be made standard for all homes within the development. If you ever wanted to make your front porch stand out by putting on some fresh paint, check out our article about picking the perfect color.

Location, Location, Location

These tract housing developments are usually created in high demand areas. This makes the entry cost of living in desirable areas lower. You may be able to buy a home closer to work, relatives, or your favorite neighborhoods for much less if you consider tract homes. 

Many aspects of tract housing are geared toward first-time homebuyers or those looking for short term housing. They are cheaper, centrally located in desirable neighborhoods, value building equity, and a great starter home option. 

The Negative Side of Tract Homes

Many of the positive aspects of tract homes are directly related to the negative parts. The decreased price you enjoy from tract homes is ultimately at the expense of the homes’ materials and craftsmanship. As many parts as possible are factory-made and not built on-site. The lumber, appliances, and heating/cooling systems are all bought in bulk and usually at the lowest price possible. These may not last as long as their higher-end counterparts.

The materials are usually cheaper, and the work is done by the big company builder, not local construction companies and builders who need to keep a good reputation. Tract homes, ultimately, are made to be attractive at a low price and not made with longevity in mind. 

Uniformity

It is not only the home’s quality that suffers; it can also be boring to have the same house as your neighbors. Tract housing developments rarely let you pick many customizations, if any. The homes may lack character, with no distinguishing features. Further, the development may have community rules that prevent you from making any changes, especially to the home’s exterior.

If you can change your home’s exterior and want to change up its look, read “How to Paint Your Front Door Without Removing It!

Stagnent Resale Value

The value of tract homes is also related to one another. No one home will have major features another has, so they will always be priced the same at resale. If the entire tract development starts to lose value, there is nothing you can do the differentiate your home if you plan to sell it later. As we discussed earlier, tract homes are designed for first-time homebuyers or short term owners who plan to move one once they’ve built some equity in their home. 

What Is Considered a Tract Home?

A street of residential tract houses

A tract home is one of the numerous houses in a development, with the same floor plans and style. To be considered a tract home, it must be found in a tract housing development purchased as one piece of land and then subdivided for home construction and sale. Unlike custom builds or spec homes, tract homes are designated as such, mostly because of the type of land split to create the development. 

Are a Tract Home and Spec Home the Same Thing?

Spec home is short for speculative home. A speculative home is made without a buyer in mind. A builder will buy an individual plot of land and build a house to suit a broad range of buyers. The builder hopes that someone will buy the home as it is being built to occupy it when it is complete. Spec homes can be purchased midway through construction, and you may have some more customization options than a tract home. 

How Long Does it Take to Build a Tract Home?

Tract homes can be built in as little as five or six months. Most custom-built homes, however, can take nine months or longer. Tract home development builders can save even more time per home by moving construction teams between homes easily since they are all built identically. Unlike new construction developments that allow you to make choices about your new dwelling as it’s being built, tract homes rarely allow you any input. Of all the types of homes built on a large scale by real estate developers, tract homes can be built the fastest because of supply chain optimizations and because no design input is necessary from buyers. 

What is the significance of Levittown?

Levittown is the name of seven large suburban housing developments that began construction in 1947 to provide cheap, readily available housing. They were built partly to provide good housing options for returning World War II veterans. William J. Levitt’s company, Levitt & Sons, created the first Levittown in New York. They started many of the processes that tract home builders use to this day. Because of how they trained their construction teams, houses could be built in one day! It is said that within two days of the announcement, 1,000 homes had already been rented. 

The first Levittown developments were not without their issues, however. Many problems plagued these early tract housing communities. Levitt & Sons’ control over the homes and their outward appearance soon seemed to reach inside the houses. Levittown is infamous for racial policies and did not initially provide leases to African American families. This was later found unconstitutional, but Levittown continued to try and maintain a segregated population for some years afterward.

For the Right Buyers

Tract homes provide a good solution to the right homebuyers. They offer a low entry price to homeownership and let you move into more desirable areas for less. They have a consistent level of quality, can be built quickly, and are readily available.

On the other hand, they suffer from some basic problems. They are generally built less durably and with cheaper supplies and finishes. They do not offer almost any customization options and can have boring, repetitive designs depending on the builder’s plans. As with all different types of homes, they work better for some than for others.

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