Archive for December, 2007
“The housing market plunged deeper into despair last month, with sales of new homes plummeting to their lowest level in more than 12 years. The slump worsened even more than most analysts expected, heightening fears that the country might be thrust into a recession. New-home sales tumbled 9 percent in November from October to a seasonally adjusted annual sales pace of 647,000, the Commerce Department reported Friday. That was the worst sales pace since April 1995.”
This was from our paper, the Rochester Democrat and Chronicle from the end of December, stating the national trend. Not the best of news at our year end.
The Rochester market seems to have fared a little better than the nation. In November, while closings were down 10.5% from October, the median sale price was up .4% from October to November and stayed unchanged from 2006 comparisons ($115,000). This price nationwide is slighly higher at $210,200 but this is down 3.3% from last year. Although monthly closings were down and number of homes listed for sale was down 31.6%, some of the metropolitan areas of the nation are much worse. (stats from the Greater Rochester Association of Realtors, Inc.)
There seems to be some glimmer of hope, so all we can do it hope for the best.
Interestingly enough, in our paper on January 1, 2008 there is some new information. They state that the NAR (National Association of Realtors) reported that sales of existing home rose 0.4% in November from October. The pace of sales was still the 2nd slowest since 1999.
A dip in the mortgage rates in November for a 30-year mortgage may help home sales slightly. This small boost may be a sign of market stabilization, but keep in mind that earlier signs of a stable market have all been dashed.
The housing market had 5 years of record breaking activity, so this slump is particularly hard. The credit problems and sub-prime mess has added fuel to the fire. More would-be buyers are having trouble securing financing.
Representing a builder and having clients who are interested in existing homes, I have been seeing both sides of the coin. While existing home sales have sagged, we have been busy with new builds, especially the patio/empty-nester homes that we have been focusing on. We have seen a steady market and have not experienced the lag that existing homes have seen.
2008 brings new hope, new resolutions and hopefully a new housing market!
I had an interesting call the other day from a Realtor who had a client he wanted to register with the builder I rep. He told me how they have been looking at existing homes and finally came to the conclusion that they need to consider building to get exactly what they want. I told him I would fax over the registration. As we continued to talk, he told me how he had convinced them to consider building. He said, “I told them building is much more costly than buying existing, but they will get what they want.” WHOA! Wait just a minute! I quickly switched into my teaching mode to help this misinformed agent about why building it NOT necessarily more expensive than buying an existing home in the grand scheme of things.
I pointed out to him that while a new build may cost more up front, his clients don’t have to make repairs and fix things that usually have to be done in 5-7 years of buying an exisiting home. A new roof, new furnace, new carpets . . . these are all costly items that most home buyers want/need to replace in the first few years of owning an existing home.
Building a new home allows your clients to chose (and pay for) exatly what they want. They are not paying for the things that were someone else’s dreams and necessities. Your client may not need that wet bar in the basement. Why pay for it?
Building a new home is a better value in the long run. Your clients can choose exactly what they want. If she loves granite counter tops, she can have them. If the existing home she is looking at doesn’t have granite, she will either have to settle for what is there or she is looking at a costly replacement. In a new build, they don’t have to replace anything before or shortly after they move in. If there are any problems, they will have warranties for replacements, and they always have the builder who they call with any questions or concerns. Who do they call for problems in an existing home? Their Realtor?
Here are some of the benefits of building a new home:
Low maintenance costs
New homes come with everything new, which means fewer repairs on items and on the structure!
New homes come with warranties to cover most structural problems, not to mention the warranties that come with any new appliances and features in a new home. Most existing homes don’t have any warranties, which can lead to costly repairs and replacements to a new home owner.
Plus, with a builder, they are just a phone call or e-mail away if you have any questions or emergencies. Check with your builder, but most offer a one-year walk-through.
New home usually include appliances, central air and heating systems, more electrical outlets and conveniently placed cable and phone jacks.
New homes consume half as much energy as home built before 1990. This benefits our environment, your health, and your wallet.
Better heating systems, built-in smoke detectors, and better wiring all decrease the chance of fire. Plus, some older homes may not have been built with egress windows and other features that are mandatory today.
On average, a new home built has approximately 700 square feet of living space more than a house built 20 years ago. More windows, closet space, bigger garages, larger kitchens and bathrooms are some of the benefits we see with the extra space.
Spacious floor plans
New home owners can take advantage of the open floor plans that are available and choose carpets, paint, landscaping, fixtures, etc.
You can choose the land and community that is most appealing.
New homes have a longer life, higher appraisal and better resale than older homes.
I think many agents are nervous about recommending a new home. Lack of knowledge about the building process intimidates many agents into not offering a new build as a viable option. I have seen many agents come through our homes and I can tell they are uncomfortable. There are some great classes offered through the Realtor associations. And as an agent ask questions! I am always glad to help another agent understand the process, that is what I there for. You could potentially be losing clients by not offering all that is available.