Home price question (Huntsville, Gadsden, Woodland: credit, how much, new home)

[Mango3861]

Hello,
I am interested in moving to the Huntsville area. I spoke to a realtor today, and she told me that homes that are priced for $175,000 sell for $200,000. Is that true?
Thanks for your help

[txstats]

That has been my recent experience. There’s no bidding war with the new homes, but there’s a ~1 year waitlist and you can’t sign contract (lock in price) until the homes are 50% complete.

[HB2HSV]

I just bought 3 homes back in December and the prices were already heated up. Even back then I was out bid by others on some homes that went above listed prices. Today you will have a hard time finding homes that's listed below $250K and less than $130/ sq ft in a nice neighborhood. If you do find a house you like, starting with a full price offer & perhaps may want to add an "escalation clause", which means if someone offers the same price your offer will automatically increase by $1K upto a limit specified by you. For example, $20K over listed price.

[lindy112]

Yes ... I listed a house in South Huntsville last month at $220K and we closed last week at $265K (FYI .. it actually appraised at $262K which shocked me).

Also, not in that same price point but Woodland, Jeff Benton, and Legacy have all now stopped doing presale homes (where the buyer comes in, picks a lot and all their design elements, and the house is built for them). For the foreseeable future, they will only be building spec homes so they can put the floor plan they want on the lot they want. I'm not sure about the others but Jeff Benton will put its available specs on the market on Fridays (30-45 days before completion) and accept offers until the following Monday. It stinks for people like my clients who have been on a waiting list for a year to get the opportunity to choose a lot.

[Mango3861]

Wow, thanks for the info.

[RocketDawg]

Originally Posted by lindy112

Yes ... I listed a house in South Huntsville last month at $220K and we closed last week at $265K (FYI .. it actually appraised at $262K which shocked me).

Also, not in that same price point but Woodland, Jeff Benton, and Legacy have all now stopped doing presale homes (where the buyer comes in, picks a lot and all their design elements, and the house is built for them). For the foreseeable future, they will only be building spec homes so they can put the floor plan they want on the lot they want. I'm not sure about the others but Jeff Benton will put its available specs on the market on Fridays (30-45 days before completion) and accept offers until the following Monday. It stinks for people like my clients who have been on a waiting list for a year to get the opportunity to choose a lot.

Lindy, is the situation you described just a local thing, or is it statewide as well in the slower growing cities?

[Big Grumpy]

Originally Posted by RocketDawg

Lindy, is the situation you described just a local thing, or is it statewide as well in the slower growing cities?

This is going on some other places as well. My stepson lives in the Gadsden area and people there are making offers over asking price. The overage amount isn't as much as what's been reported here, though.

[Surge0001]

Ya, housing market is super tight right now for nearly all of the state, but Huntsville is arguably THE tightest in the state. It's not uncommon for bids to go way higher than what the houses are actually worth

[RocketDawg]

Originally Posted by Surge0001

Ya, housing market is super tight right now for nearly all of the state, but Huntsville is arguably THE tightest in the state. It's not uncommon for bids to go way higher than what the houses are actually worth

I suppose my question is - in the case Lindy's $220K asking and actual selling of $265K (and similar situations) - why not just ask $265K in the first place? It looks like most houses, maybe all, are selling for more than asking, so just go ahead and set the price higher to begin with? Or is it all part of the game?

Keep in mind that I'm no economist or realtor, just an engineer, so may not have a clue whether this would be the right approach. I think I took a credit course in engineering economics at some point many years ago though ....

[txstats]

Originally Posted by RocketDawg

I suppose my question is - in the case Lindy's $220K asking and actual selling of $265K (and similar situations) - why not just ask $265K in the first place? It looks like most houses, maybe all, are selling for more than asking, so just go ahead and set the price higher to begin with? Or is it all part of the game?

Keep in mind that I'm no economist or realtor, just an engineer, so may not have a clue whether this would be the right approach. I think I took a credit course in engineering economics at some point many years ago though ....

I asked my agent the same thing. I said if sellers would just tell me how much they’re willing to let the house go for, it would be much easier to make the decision instead of playing this guessing game of how much to offer and what to put on the escalation clause. I think it’s because they don’t know how much people are willing to pay for the house, so they list it at “market” price, which of course, in this market, people are willing to pay $$$$ above listing, and generally sellers want to get as much for the house as they possibly could. Either that, or it’s to attract buyers to come look at the house, because if you list a house for well above market already, potential buyers can get discouraged from touring. I’m no realtor myself - would like to hear what those in the industry think.