Building a new home from the ground up may get easier thanks to a New York City startup that’s bringing the entire process online.
Welcome Homes, which officially launches this week, lets buyers choose a plot of land, select finishes for their new home and put down a deposit on the platform. The company has raised a $5.35 million seed round led by Global Founders Capital, and is available in Westchester County, Morris and Bergen Counties in New Jersey, and Greenwich, Connecticut.
Co-founder and CEO Alec Hartman said the idea for Welcome came from his own experience of looking for a new-construction home outside of New York City when he and his wife were expecting their first child. They encountered little inventory and bidding wars. “I don’t understand, ‘Why can’t I go online, click a few buttons and have a house,” Hartman recalled thinking. “That was a lightbulb moment.”
He said Welcome aims to make purchasing new construction simpler by streamlining the process on the back end. Currently, it offers one design for a four-bedroom, 3.5-bathroom home featuring an open floor plan. Through its platform, buyers also customize their homes with a menu of finishes. “In our attempt to be super turn-key, we did a ton of value engineering,” Hartman said.
Prices start at $969,000 for a 4,590-square-foot house, but go up based on the specific location.
As a developer, Welcome manages the construction in-house (using local contractors, according to Hartman) and sources all materials. Any change orders go through Welcome’s online system with strict parameters to keep costs in check.
But Welcome isn’t buying the inventory like iBuyers do; rather, it’s optioning plots of land. Buyers pay a deposit online for the home, and have the option of working with Welcome’s financing partner. “It’s a single closing process,” Hartman said. “It’s like buying a home but you’re really building it.”
Nationwide, demand for new homes has outpaced supply in recent years, boosting homebuilder confidence. New home sales rose 4.8 percent from July to August, according to the Commerce Department. There were 282,000 homes for sale at the end of August, representing a 3.3 month supply.
According to Hartman, Covid has given Welcome a tailwind, but he said demand existed before the pandemic. “There is a growing need for new inventory, especially among millennials cycling out of major cities,” he said. Within a few days of Welcome’s site going live, he said “hundreds” of people got on a waiting list for a new home.