Friday, April 17, 2015

New Homes are Hot

Over the last few years our local market has been driven with buyers looking for clean move-in ready homes. Sure, there have been the deal seekers buying up the rough homes, but most of that was investors flipping or renting the properties. It seems our owner occupant buyers have been willing to bid up the cherry homes with multiple offers while the rough ones tend to sit.

I don't think this is just an anecdote. Fannie Mae and Freddie Mac have been fixing up their REO inventory with fresh paint and carpet to try and tap into this move-in ready market.

It seems that new home builders are tapping that resource as well. There is quite a bubbling renaissance in the new housing industry. What the resale market brings to the table is location, lot size and price. Right now the resale market is clinging to its inventory. There just isn't a whole lot out there. This makes new homes that much more attractive.

Some of the small local builders are back in business and that is providing an opportunity to buy a new house in an established neighborhood. One such development is the Tall Tree Meadow in Vancouver. I am delighted to be a part of this particular subdivision. It is just six homes, three are built already and three more lots will be built later on.

This subdivision is located in a built out area near Arnold Park in Vancouver. It is close in to both SR-500 freeway and I-5. It's just three minutes to the Interstate Bridge, yet offers a home that feels like suburbia.

It is often the trade off home buyers make when looking at neighborhoods. Do I want that bigger, newer home with the three car garage but out in the 'burbs or do I want the eclectic experience of the older, established neighborhood close in to the city?

Developments such as Tall Tree Meadow offer the buyer a third choice, "all of the above". In reality it is a blend of the two, but for many it is the perfect blend. For buyers seeking a perfect conformity of neighborhood, the modern suburbs in an incorporated city are the ticket. For those seeking that multifarious buzz, the older neighborhoods in close to core are the best. But there are those who want both, and small infill developments like Tall Tree Meadow are an ideal option.

In our local market most builders, large and small list their homes on the MLS. I have always liked that about Southwest Washington. Buyers can work with a Realtor®, look at both new homes and resale homes. They get an honest opinion about what is best for them rather than the conflict of resale versus new home with the developer in direct opposition to the resale Realtor®. Other markets around the nation are often different. Ask your local real estate professional about new homes.

Here in our local market we have seen a resurgence in both large scale suburban new home development from national juggernauts like Lennar and the smaller infill developments like Tall Tree Meadow. Buyers considering a new home should be aware that negotiating with a builder is very different than negotiating with a resale seller. Builders are very resistant to a lower price. Many buyers mistake this reluctance as greed. In reality buyers must remember that a a sale in the development is recorded in the public domain. Most new homes are purchased using financing and the bank will require an appraisal. Once the developer sells a house in the neighborhood that discounted comp will haunt him. Imagine a buyer negotiates a $5,000 discount on a 50 home subdivision which is filled with very similar homes. That $5,000 discount could cost the developer $250,000 as that comp is used by every appraiser for every purchase over the next several months. Negotiating with a builder requires some finesse and an experienced real estate professional. There are tactics that can benefit both parties whereby the builder is happy and the buyer gets a "deal".

Now get out and soak up the beautiful spring weather while looking at great new homes. I'll be back next week.

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