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I live in a community that is about 25 - 30% built out. Of the homes completed within the last several months, almost none have closed. In other words, the buyers either did not qualify in the end or they bailed. Now the builder is dropping prices on those homes drastically for quick sales and many of the homeowners in our neighborhood are in a frenzy. Most of these homes are closing for over $100K below prices that homeowners living here paid for their homes, and the builder has also dropped home prices a lot to complete the 1st phase of the neighborhood. They claim that prices in phase 2 will increase, but I don't see how. I know the market has softened, but I can't believe values have gone down that much. Just curious about your thoughts on this, especially to realtors out there. I will note that I am not sorry that I bought my home, nor do I plan on selling anytime soon, but it is disheartening to see the values going down so much.
It was reported on CNN that home values will drop at least another 15 percent.
If you are looking long term then dont worry about anything.
If you are looking for a short sell or was planning on selling in 2 years then you might not get what you expected.
I have learned not to buy a home in early phase of development that is not complete due to I have notice the better bargain is the last few houses in that phase.
Also the last few homes set the selling price of a home of that size in that community.
If the bulder has already started phase 2 then I know it will be forever before I will see any apperciation that I desired in that community
I have learned not to buy a home in early phase of development that is not complete due to I have notice the better bargain is the last few houses in that phase.
Also the last few homes set the selling price of a home of that size in that community.
Although I agree w/you on the bargain comment, there is a reason why certain lots are the last ones. They are the least desirable. Personally, a desirable lot is important to me and I wouldn't settle...just my .02
I live in a community that is about 25 - 30% built out. Of the homes completed within the last several months, almost none have closed. In other words, the buyers either did not qualify in the end or they bailed. Now the builder is dropping prices on those homes drastically for quick sales and many of the homeowners in our neighborhood are in a frenzy. Most of these homes are closing for over $100K below prices that homeowners living here paid for their homes, and the builder has also dropped home prices a lot to complete the 1st phase of the neighborhood. They claim that prices in phase 2 will increase, but I don't see how. I know the market has softened, but I can't believe values have gone down that much. Just curious about your thoughts on this, especially to realtors out there. I will note that I am not sorry that I bought my home, nor do I plan on selling anytime soon, but it is disheartening to see the values going down so much.
I don't believe the values have in reality dropped - they were overinflated to begin with and now the builder is paying the price. Unfortunately, so are you as you now have a home you couldn't sell for what you paid for it. The best thing you can do is to plan to stay put (at least 7 or 8 years) and ride this thing out. If you are patient, and just try not to worry, you'll be okay down the line.
Also, this is exactly why I would never buy into a new development in its early stages - always buy when the neighborhood is being finished off - An existing home in a new neighborhood can never compete with the builders new homes that are still being built.
Builders are selling off their inventory and then will stop building on spec to bring down the supply of houses. This will help stabilize prices in time. As others have said, if you are in it for the long haul, you will be okay. Yes, the folks who bought at a lower price are ahead but that is part of the market.
I thought just the opposite of what you stated. I watched the prices continue to climb for 4 months before finally making the plunge. Had we bought the house the first time we visited, we would have gotten it for at least $25K less. With that trend, I thought the home values would continue to increase, making it impossible for us to afford to buy. I guess you live and learn. I don't feel all that bad though. Even though I could probably purchase the same home for significantly less now, I would have lost even more on the home I sold in FL, if I could even sell it at this point. Though I have theoretically lost money, I am where I want to be in the house I want to be in.
Quote:
Originally Posted by SunnyKayak
I have learned not to buy a home in early phase of development that is not complete due to I have notice the better bargain is the last few houses in that phase.
Also the last few homes set the selling price of a home of that size in that community.
I live in a community that is about 25 - 30% built out. Of the homes completed within the last several months, almost none have closed. In other words, the buyers either did not qualify in the end or they bailed. Now the builder is dropping prices on those homes drastically for quick sales and many of the homeowners in our neighborhood are in a frenzy.
Never buy in a subdivision or from a production homebuilder.
These are homes that should not have been built and can be scraped off and returned to farmland with nobody ever missing them. Your subdivision will change quickly and is already beginning to decline. The inventory will be sold to whomever just to move it, and when these buyers sell, usually quickly, they will sell to less desirable buyers, and the process of decline is quickly accelerated.
The chief problem with buying a subdivision house is that there is no true market value. The builder dreams up a price, and people pay it. This is dangerous. If you want to know what your house is truly worth, list it. You'll find that the builder lied.
Find an old neighborhood with streets that are built on a grid, and buy a house there.
Never buy in a subdivision or from a production homebuilder.
These are homes that should not have been built and can be scraped off and returned to farmland with nobody ever missing them. Your subdivision will change quickly and is already beginning to decline. The inventory will be sold to whomever just to move it, and when these buyers sell, usually quickly, they will sell to less desirable buyers, and the process of decline is quickly accelerated.
The chief problem with buying a subdivision house is that there is no true market value. The builder dreams up a price, and people pay it. This is dangerous. If you want to know what your house is truly worth, list it. You'll find that the builder lied.
Find an old neighborhood with streets that are built on a grid, and buy a house there.
Please don't let the homeowners in Baxter Village or other well planned communities know what is going to happen to them for buying in a subdivision.
Some people have such twisted view points. I personally have done very well with new construction in new sub-divisions. You could by a resale in which you have no idea what is behind the walls, or how much you will spend in utility costs due to unefficiency in the home and the lack of conformity to todays code. So maybe your value flat lines but what is the point if you are throwing away 1k a month in untilities. Atleast most of your cost in new construction are a write off. Also, having a sense of neighborhood is critical to me and I can not find that in existing neighborhoods who already have their cliques, and have no room for new friends. We need to get back to buying a home because we love it, and it meets our needs not to see how much money we can make from it in a short period of time. That type of mentality is what has gotten us in this situation to begin with along with the mortgage industry. I live in a custom neighborhood and hate it!!!! Less sq. footage, much more money. Arrogant attitudes. I am in the process of making a move to a production builder to put more money in my pocket while gaining the additional sq. footage that is important to me. Do your research and make sure what you are looking at has uniqueness. If you want to make money on your investment, play the stock market where you dont have any emotions tied to it. A home is meant to love and a neighborhood is meant to create memories. It can provide appreciation too but that is not the primary, or even secondary objective.
I am in the process of buying a house in The Point in Mooresville. The house was listed at $1.169 and I ended at $1.000. I had a ton of choices in my price range and I am getting the best deal with the new house. There were many resales that we looked at that were overpriced in comparison. Some motivated sellers were willing to drop the price when our realtor offered feedback, but many kept their prices the same which were too high in my opinion. I was told that the market down there was not that soft when we started to look, but I disagree with that. I have no idea what stage the market is in the Charlotte area and if prices will increase/decrease/stabilize. As an economist and statistician though, I would think that the oversupply in housing (because of the limited amount of qualified borrowers with mortgage companies lending sensibly) is influencing housing prices downward. I am coming from the Detroit area though and if you want to know about a bad real estate market, let me know. I took a stinging 25% loss on my house ($150k), but I loved the house and I can't help the economy in this state. I never look at my house as a financial investment but an investment in my welfare, my kids education and a way to meet some great people while learning about a lot of new things.
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