Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Is new construction a bad investment as a rule or has it been the market lately that has made it so? I live in a neighborhood that was built in 2007 and all of the homes bought by original purchasers are under water right now. I'm not sure how much of that is due to the builder ripping off the customers (and if that is typical) or how much is due to the market correcting. It seems like the average purchase price is about 20% over the current market price. What say ye real estate agents?
Is new construction a bad investment as a rule or has it been the market lately that has made it so? I live in a neighborhood that was built in 2007 and all of the homes bought by original purchasers are under water right now. I'm not sure how much of that is due to the builder ripping off the customers (and if that is typical) or how much is due to the market correcting. It seems like the average purchase price is about 20% over the current market price. What say ye real estate agents?
It is all about timing.
Back before the housing slowdown, if you purchased new construction when the n'hood was first begun, after the builder sold 5 homes, he pushed up the price another $3,000 to $5,000. By the time your n'hood was halfway finished, you had equity in your home. That isn't happening in many neighborhoods anymore. Now, it is a risk as to when the n'hood will be finished and who will be finishing it? If it is a builder that builds smaller homes or less expensive homes, your home won't go up in value and it may come down in value.
Back before the slowdown, people bought brand new homes and paid the going price. Then prices fell. But that can be said for many that bought their homes in 2005 and 2006. Those that are selling NOW could be selling for less than they paid. Not all were brand new homes either.
Buying new construction today is different than it was a few years ago. You really want to minimize your risk as much as you can. I recently had buyers that purchased a brand new home that was the last one in the n'hood to be finished. Unfortunately for the builder, he kept discounting the house. When my buyers purchased the home, we got even more off the price plus a few extras. Some of the other homes in the neighborhood sold for much more.
There is little risk to MY buyers since they were one of the last to be built and we got it at such a low price. If the neighbors that bought 3 years ago, sell today, they may be underwater. Less risk to my buyers since the n'hood is now finished.
There is little risk to MY buyers since they were one of the last to be built and we got it at such a low price. If the neighbors that bought 3 years ago, sell today, they may be underwater. Less risk to my buyers since the n'hood is now finished.
Vicki
If it's the last remaining house/lot, doesn't that imply there's something unattractive or undesirable about that property - easements, powerlines, tiny lot, etc..? So, even if it's such a bargain in price, how well will it sell in the resale market?
If it's the last remaining house/lot, doesn't that imply there's something unattractive or undesirable about that property - easements, powerlines, tiny lot, etc..? So, even if it's such a bargain in price, how well will it sell in the resale market?
You have to buy it right on the front end to sell it right on the back end.
With the inventory/buyer ratio starting to tilt to seller advantage, I think that "mistake homes" will sell better than they have over the last couple of years.
As prices start to firm more, or even increase, it should tempt sellers who have set out the worst of the market to start putting homes on the market.
Increased supply should help moderate any upward price pressure, at least some. Supply and demand and all that.
We just bought (in pre-contract right now) a new house which was on the market for over 15 months for a very good price. The house backs up to the tail end of a Wellness Center parking lot but so does every other house on that side of the street. It was in the Parade of Homes last year and yet it was the last one to sell on that side of the street. No one know why this house wasn't sold and the others were even though all have the same issue (backing up to a parking lot).
The house is beautiful with a great floorplan and after doing some research we figured it probably was one of the best on the street...go figure! The n'hood is now finished (only 2 homes remaining) but since we got it at a fairly good price we feel less at risk than the others who bought early on.
So yes when a house sits for a long time there is usually something wrong with the lot, powerlines, retention pond etc. but sometimes there's no reason why one sells and the other doesn't!
If it's the last remaining house/lot, doesn't that imply there's something unattractive or undesirable about that property - easements, powerlines, tiny lot, etc..? So, even if it's such a bargain in price, how well will it sell in the resale market?
Some developments are simply built in phases - in a rather orderly fashion - not based on selling the best lots first and the worst ones last.
Is new construction a bad investment as a rule or has it been the market lately that has made it so? I live in a neighborhood that was built in 2007 and all of the homes bought by original purchasers are under water right now. I'm not sure how much of that is due to the builder ripping off the customers (and if that is typical) or how much is due to the market correcting. It seems like the average purchase price is about 20% over the current market price. What say ye real estate agents?
i am not sure it is just new development that was hit -- it seems if someone bought between 2006-2010, then they are a bit hosed regardless of new or not new...that was the height, not the prices now...
We just bought (in pre-contract right now) a new house which was on the market for over 15 months for a very good price. The house backs up to the tail end of a Wellness Center parking lot but so does every other house on that side of the street. It was in the Parade of Homes last year and yet it was the last one to sell on that side of the street. No one know why this house wasn't sold and the others were even though all have the same issue (backing up to a parking lot).
The house is beautiful with a great floorplan and after doing some research we figured it probably was one of the best on the street...go figure! The n'hood is now finished (only 2 homes remaining) but since we got it at a fairly good price we feel less at risk than the others who bought early on.
So yes when a house sits for a long time there is usually something wrong with the lot, powerlines, retention pond etc. but sometimes there's no reason why one sells and the other doesn't!
I know where you're moving. Don't worry. I'm not a stalker.
That's a really cute house. I've seen it.
__________________
When in doubt, check it out: FAQ
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
