"Base Price" of New Construction Homes Starting to Come Down !! (Houston: days on market, sales)

[Houston456]

We were passively monitoring the Housing Prices on new construction homes in Houston suburbs and, until now, all we see is deals on Inventory homes. But it appears that builders are ready to reduce their officially advertised ‘Base Prices” on homes. Generally, builders dont do that in an attempt to avoid wrath of early buyers.

Last week I got an email from Meritage in SCR, saying that

Spectacular Savings Event - For a limited time you get:

$10K off the base price
$10K for upgrades and options
$30K in included features
3% towards buyer's closing costs with preferred lender

It’s true, Shadow Creek Ranch (West Side) is an exception to any rule due to its proximity to the landfill but even they tried to hold on to their baseprices until now. May be it’s a sign of what to expect in the near future..

[EasilyAmused]

Heard an ad this morning for The Woodlands. Promising 5000k gift cards, more upgrades etc if the home is purchased before the 31 st.

Yes, I would say production builders are starting to feel the pinch.

[BunBoHue]

$5,000,000 gift cards? Sign me up for two...

[Houston456]

uh..oh...
HAR says Area home sales plummeted in November, dropping 31.7 percent compared with same period last year

Originally Posted by Houston456

We were passively monitoring the Housing Prices on new construction homes in Houston suburbs and, until now, all we see is deals on Inventory homes. But it appears that builders are ready to reduce their officially advertised ‘Base Prices” on homes. Generally, builders dont do that in an attempt to avoid wrath of early buyers.

Last week I got an email from Meritage in SCR, saying that




It’s true, Shadow Creek Ranch (West Side) is an exception to any rule due to its proximity to the landfill but even they tried to hold on to their baseprices until now. May be it’s a sign of what to expect in the near future..

[cla]

Originally Posted by Houston456

uh..oh...
HAR says Area home sales plummeted in November, dropping 31.7 percent compared with same period last year

The link under resources (What's selling in Houston) is interesting.

In certain areas the median price has risen even while the number of sales have declined. In central west Houston (bounded by Westheimer, Memorial, Beltway and 610), home sales have declined by 61%, but the median price is up 40%. South Katy has had a nearly 18% decline in sales, but the median price is up almost 12%.

This is just for the month of November. I would be interested to see the same statistics for the last several months.

[chris_ut]

Originally Posted by cla

The link under resources (What's selling in Houston) is interesting.

In certain areas the median price has risen even while the number of sales have declined. In central west Houston (bounded by Westheimer, Memorial, Beltway and 610), home sales have declined by 61%, but the median price is up 40%. South Katy has had a nearly 18% decline in sales, but the median price is up almost 12%.

This is just for the month of November. I would be interested to see the same statistics for the last several months.

What that says to me is that rich people are still buying and the few middle class people who are buying are buying cheap foreclosures.

[Jamesww]

I run a Houston housing market blog and what I have witnessed for different areas of the Houston metro is that no aggregate spot has taken across the board decline. But I have also been tracking that the gains earlier in the year on the average and median home sale price were fueled by increases in the percentage of the market that was high end homes.

Now that there has been a massive decrease in the number of high end homes sold as of late the median and average home sale prices will correct to show that over the year prices have been flat. I have already noted that by correcting the median home sale price by the median square footage. This calculation shows that prices have not increased but 0.8% market wide.

We have seen very strong price appreciation in some spots but have noted losses in less popular neighborhoods. If there is any certain set of numbers that members of the forum would like to see crunched data on let me know.

Oh, and back to the original post the Pearland area has been the worst performing market this year. Inventory has been way up and average days on market is the highest. I feel that Pearland is a bit over built and that the commute form the medical center has gone up so much that it really is not a benefit over many other areas anymore.

[BunBoHue]

We all know that the Aliana development in Richmond is taking a beating, but what are your thoughts about Telfair in Sugar Land? I've been receiving emails from many of the builders in Telfair about crazy price cuts on inventory homes there. I don't know if they are giving the same incentives on "to be built" homes though.

That said, what does this mean for people that have built there previously and paid a "premium" for said property? It would surely suck if in 10 years your property is still the same or less than what you've paid for it because the market “adjusted” itself.

[Jamesww]

Originally Posted by BunBoHue

We all know that the Aliana development in Richmond is taking a beating, but what are your thoughts about Telfair in Sugar Land? I've been receiving emails from many of the builders in Telfair about crazy price cuts on inventory homes there. I don't know if they are giving the same incentives on "to be built" homes though.

That said, what does this mean for people that have built there previously and paid a "premium" for said property? It would surely suck if in 10 years your property is still the same or less than what you've paid for it because the market “adjusted” itself.

What you speak of has been a historical issue with the Houston metro area. In most cases appreciation rates for new construction stay flat until the development is nearly complete. If you purchase in a new construction neighborhood near the begining of it being built your home will not noticeably appreciate until the entire development is complete. Then the first 3 years following a new master planned communities completion you will see a leap in appreciation rate to around the 5-8% range and a return to the rate of inflation. Add to this that in most cases a new master planned community will sell at higher prices in the first year than year 3-4. As the intial jolt of interest in the community wears off and the builders offer greater incentives.

I just want you to know that it is the norm not a product of the economic termoil. If you want to do well on your purchase and your set on a new home find a popular master planned community that is nearly built out and purchase your home there. Otherwise just realize that you will have to live in the home for 5-7 years just to pay your selling expenses.

[Houston456]

Originally Posted by Jamesww

I feel that Pearland is a bit over built and that the commute form the medical center has gone up so much that it really is not a benefit over many other areas anymore.

My thoughts as well.
Many folks bought in West Pearland hoping for fast and easier commute to TMC during peak jhours. But it seems 288 is getting crowded day-by-day and those '11 minutes to TMC' ad is a joke.