Too many houses up for sale? (Dallas, Plano: rent, home builders, established neighborhood)

[GoPadge]

You know. I've wondered which segment will have the most losses, the Teir 1 custom builders, the Tier 2 builders or the Tier 3 tract-home builders.

[socketz]

Originally Posted by GoPadge

You know. I've wondered which segment will have the most losses, the Teir 1 custom builders, the Tier 2 builders or the Tier 3 tract-home builders.

The big box national guys like DR Horton/Centex are overall suffering nationwide, but look good in their home state:

Texas (Can't) Hold 'Em - 5/1/2007 - Professional Builder

With that said, I still worry that some of the areas around us have been overbuilt because the home inventory continues to grow and builders are offering some incredible deals on new homes....even the bettrer tier 1 builders like Highland are dropping em to the angles trying to get more inventory moved.

I probably don't have to explain how this kills the resale home market and helps explain why inventories in north Collin County are swelling.

===================From a blog on a local Realtor's website

"The BEST new-construction deal I have ever found


I was with some of my new friends/clients again this weekend. I have been looking for a new home with them since October. It is now the right timing for them to actually make a purchase. We found a brand new, never lived in home in a great neighborhood in west Frisco, over 4,000sf and fully loaded with hand-scraped hardwoods throughout the downstairs, huge gameroom with wet bar and a full-size media room.

The house was listed at $412,000 and I negotiated it down to $355,000. That is $57,000 off! That is officially the best deal I have found since I got my real estate license. When I checked the comps, there was one other that sold in the neighborhood for $380k. The rest were all over $400k for comparable sized homes.

It is a good time to buy new construction if you know where to look!"

[GoPadge]

Thanks Socketz.

As if I didn't worry enough already about the area, now I'll also worry that "deal shopping" will put more people into financial trouble when they start getting their tax bills...

[bricor]

Some friends of mine just bought a Highland home, couldn't get them to deal that much. Highland told them the price is what it is and they are having no problem selling them in that area.
I'm building a Drees and got a deal simliar to what Socketz realtor blog mentioned. (actually better)

[momof2dfw]

Geez. That is sad. I'm glad that my area is not being overbuilt like that. The one neighborhood near me that is being built is not having problems selling houses at all and not having to offer incentives. I'd say the lower end home builders are the ones suffering and will be for a good while. They have tried to build in every nook and cranny and throwing them up thinking that they will have no problem selling. Too many spec homes. Guess they will never learn their lesson as this is almost exactly the way it was back in the 80's. They were building spec homes left and right thinking people would just keep buying them then when it slows their stuck w/ all that inventory. Also when you see subdivisions that were built in the 80's-early 90's you will find where someone went bust and sold the rest of the lots to another builder or they sat forever till building started picking back up. So you will find areas that homes have a 10-12 year spread that look kind of like they don't belong.

[5stones]

also intrest rates are going up so many people aren't "up-sizing" in thier same area as 2 years ago.

Same as here in NOVA the builders are now overloaded with stock. lots of People would rather have "new" than 5-10 years old. So when you've got bulider overflow it hurts the secondary market. Even in "established neighbors in better locations. Here they are building new homes right along side the Toll road (the back decks literally overlook the highway) no trees etc.. but people are buying those as opposedto houses in my neighborhood because it's older....has nice trees community pool etc... but no granite etc..
in 2005 the averge house here was on the market for 5 days! now it's 90 days.

[catluvr]

Originally Posted by momof2dfw

In areas where builders are throwing them up left and right and it is a pure building frenzy going on there is a flood of homes for sale and the prices have dropped. In areas that are not in a building frenzy the homes that are worth it are selling w/o any troubles at all.

Hey guys...be very careful if you buy in the areas that the builders are throwing them up left and right. The MN housing market is horrible and this is how it started. We had the same boom in 2003-2004. Now for every 9 houses on the market there is only 1 buyer. We took a 29K hit on our starter home.

I cannot stress to you all enough how this is a very bad thing. You all better hope people keep buying in your area. I hate to be an alarmist, but this makes me PANIC. Hopefully DFW does NOT see the downturn that Minnesota is having. Result is foreclosures and huge drop in home buyers and overabundance of sellers. Essentially the builders have ruined our economy and now the banks are not even writing loans to potential first home buyers because the banks over lent to consumers.

[SepiaZelda]

Originally Posted by Lakewooder

Yep - Cochran Heights, Junius Heights, Lakewood Country Club Estates, Ridgewood Park, Caruth Meadows..

I wonder if you're our landlord.

[killer2021]

I live in Orange County, CA and I can definitly tell you that Dallas,TX is one of the more fortunate markets. Yea the inventory is increasing but nothing to worry about. Housing tracker says Dallas increased inventory 7.1% in 1 year and is up 6% in prices. Compare that to OC which is down 7.9% in prices with 25.1% increase in inventory!

It is really simple to explain what is happening too. For the past couple years financing was very easy to obtain (liar loans) and now that sector is gone. You need to fully document income and prove you can make the payments. Meanwhile to further depress the situation interest rates are on the rise which makes borrowing money even more expensive.

Real estate bubble - Wikipedia, the free encyclopedia

[socketz]

Don't kid yourself, while Dallas is definitely not a bubble market waiting to pop, it is a market that relies heavily on outsiders moving in (about 200k per year). Once these outsiders find that they are unable to sell their homes in their state of origin, the market here will continue to soften, especially in the higher end (300k and up) markets. You can already see this happening. The market is soft here now and there is 8 months of inventory and growing. Lots of overbuilding has occured over the past 3-4 years. I can see this being a stable market if your in it for the long term 5-7 years, but I wouldn't move here expecting to make 7% on your house per year. As someone pointed out before, much of the median home price increases are attributed to the fact that as an area builds out, the homes being built become more expensive. If you want to see true appreciation, find an area that has been built out and see how much values have risen there...(i.e. like Plano, 1.5%)