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Old 12-18-2016, 10:58 PM
 
42 posts, read 34,081 times
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Why are the home prices soft in Little River and Myrtle Beach but developers continue to build new homes?

The existing homes have all had price reductions and home appreciation is down 6%. Yet, there are new homes being built by developers.

What are the factors driving these seemingly conflicting trends?
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Old 12-19-2016, 06:36 AM
 
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My take is that most people moving to the area would rather have a new home rather than a home that's 10-20 years old and getting close to needing additional work. This assumes that the price of the homes are similar. The older home takes price reductions to account for the work that will need to be done while the new home maintains its asking price since there is no work that will need to be done for many years.
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Old 12-20-2016, 04:48 AM
 
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Excellent point CT. Do you know If there have been many building standard changes in the last 10 or so years that would make an older home a concern?
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Old 12-20-2016, 05:17 AM
 
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The building codes are updated every 3 years.
https://www.houselogic.com/remodel/w...uilding-codes/
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Old 12-20-2016, 08:47 AM
 
Location: A place Santa seldon visits
82 posts, read 344,511 times
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Home prices are effected by material cost, land availability, labor and so on,
they are also in a way effected by lenders, and real estate sales fees.

In todays market lenders fearing possible foreclosures, and large loses
do not want to be stuck with homes that has been painted to look great
but is rotting underneath. Since 95% of first time home buyers know zero
about construction material, electrical, plumbing, heating/AC and so on
lenders have to be big daddy and take into account the life of a roof, heat pump/ac,
water heater, neighborhood, construction type material used, ie tile vs vinyl, pine vs oak,
carpet vs hardwood, formica vs granite, so on

( Lenders ) If new home prices are not increasing due to inflation, or supply/demand,
they will not lend out 200k on a home that is 10 years old when a new one can be bought for 220K
especially if you don't have 20-25% down, and they know your taped on savings,
and will not have 10k for a new roof, or 5k for a new heat ac system so on.

Most home sales nowadays in a nut shell go like this.

Home lists for 200k
Seller gets exited because he has an offer to purchase at asking price but its subject to financing,
and inspection, home inspector comes through finds all sorts of things that need, or will soon need fixing.

Bank sends out an appraiser, takes pictures of the home, takes a look at historic sales in the area of comp homes
and gives the bank their idea of research and value.

Buyers agent goes back to seller and tells them buyer wants 20k off the price to fix all the stuff the home inspection found
and closing costs because the bank will only lend them 180k on the house.

So now that 200k listing either takes 180k minus 11k commission, and 2-3k in closing costs so $167k check at closing
or they wait for inflation, demand, location, and all the other factors.

Your miles may vary based on driving habits :-)
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Old 12-20-2016, 02:54 PM
 
Location: Surfside Beach, SC
2,303 posts, read 2,689,611 times
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Quote:
Originally Posted by jerseyj View Post
The building codes are updated every 3 years.
https://www.houselogic.com/remodel/w...uilding-codes/
This was an extremely helpful link - thank you so very much!
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Old 12-21-2016, 03:32 AM
 
212 posts, read 572,493 times
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While I don't usually indulge in generalizations, you should use extra caution when looking at anything built during the late great real estate bubble of 2003-2007 when being able to breathe was the major job qualification in the building trades. That era encompasses a lot of the newer housing stock in the Grand Strand.
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Old 12-22-2016, 05:18 PM
 
Location: Fredericksburg, Va
5,189 posts, read 13,375,369 times
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Nothing wrong with older homes...but it's true..as long as there are spaces for new builds, the existing market will suffer. The building bubble..nothing wrong with the homes then...they are quality homes.
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Old 12-23-2016, 08:34 AM
 
Location: A place Santa seldon visits
82 posts, read 344,511 times
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Quote:
Originally Posted by cb at sea View Post
Nothing wrong with older homes...but it's true..as long as there are spaces for new builds, the existing market will suffer. The building bubble..nothing wrong with the homes then...they are quality homes.
True
Most of the time its nothing more than a marketing ploy, these are just a few

I remember when kitchen cabinets, base boards, and other trim inside homes
were made with solid wood, they then started using plywood sides,
now they use particle board pressed together with glue and a layer of vinyl to look like wood

Floor joists were made with solid 2x12 douglas fir, then they went to pressed wood with glue
to find out that goes up in flames faster and floors were caving in.

Some things got better, lead pipes to galv steel, to copper. But then they went to pex and pvc pipe
so the material cost went down 80% on plumbing, along with labor, gluing and crimping vs solder

Electrical and insulation got much better, but nothing major earth shattering in the last 10-20 or so years.

Nailing a few extra clips at $1.00 a piece to the construction for wind stress does not add 30K to a home

Some one can get a great 10-20 year old home that surpasses new construction in quality, if they know what they are looking for.

My last home a two story had 1/2 osb plywood on the exterior, every inch, then tyvec, and then vinyl.
The builder told my neighbor that for the cost of the plywood sheeting he would be better
off with foam board it had better insulation, though true
( what he meant to say was that it was much, much, faster and easier for his guys to hang) nothing like watching the siding guy struggle to find a wall stud to use for nailing up the vinyl siding. Think of that home in high winds, or a burglar with a box cutter.

Yes some things got better, most things just got cheaper!

Any who

Merry Christmas everyone
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