Merry Christmas From Raleigh Area New Home Builders
December 13th, 2007 Categories: Buying a Home, New Construction Homes
If you are anywhere close to being in a position to buy a new home in the Raleigh area, you need to call me right away! Raleigh builders are doing something very unusual. They are discounting new homes!
In the past few weeks I have written two contracts for new homes at significant discounts. One was a $510,000 custom built home that sold for $465,000. The other was a $240,000 new home that sold for $223,000 with $3,000 builder paid closing costs. Six months ago these builders would not have even considered these discounts.
Why are the prices being reduced now? One reason is a slowdown in buyer demand in the Raleigh real estate market that has been slowly developing over the past 12–18 months. The primary culprit here is people relocating to Raleigh who are having trouble selling their homes in other markets around the country. The number of home buyers affected by this seems to be at an all time high right now.
Another reason is simply the normal slowdown that always occurs during the holidays. The number of home buyers naturally diminishes this time of year. Although, those who are shopping for a home are typically more motivated.
I think the biggest reason is builders simply did not see the slowdown in demand coming. They continued to build inventory. Lots of national builders increased their inventory here because our market continues to outperform most of the rest of the country. Unsold inventory is one of a builder’s worst fears.
The total number of homes listed for sale is currently 8,048. This is down about 5% from a peak about six weeks ago. Out total inventory absorption rate is just under 5 months which is below the 6 month level that technically indicates a transition from a seller’s market to a buyer’s market.
The real estate market in Raleigh is certainly not in any significant trouble right now. Resale prices are still holding up fairly well. I was actually in a multiple bid situation a few weeks ago and the home sold for within 1% of full price.
The bottom line is that interest rates remain at historic lows and new home prices are being discounted. If you are ready, let’s talk about how you can take advantage of these conditions.
