Everybody loves a hot market — builders get to build, our homes are worth more and a lot of people who make their living off real estate transactions do very well for themselves. But the last 12-15 months was an anomaly; the exception to the rule. As market conditions turn back to historical averages, many consumers are in a holding pattern, waiting to see what happens next while many speculative homeowners are listing their homes to get out of the market while it’s on top. The next few months will be interesting and unpredictable — speculation does funny things to people.
If you are looking at buying a home in the short term, you are in a very favorable position. Builders will be offering incentives to move their inventory and fight harder for your business.
If you are in the market for a condo, the most desirable units will be on the market for longer, allowing you to explore all of your options and make a calculated decision. This is the time when having the luxury of a few extra visits to competing projects or presentation centers can really pay off.
Chances are, prices will be competitive wherever you go, but that is not to say there are no deals to be had, specifically with multi-family projects. Generally, a builder will need to sell 50-60% of their project before they can get financed to start building. This is a volatile time period and builders need to get through it as quickly as possible.
If a project is in the design phase, it can be shelved until market conditions improve but there will be projects that have already started that have no choice but to push forward — this is an opportunity.
On the other end of the project cycle, projects that are complete but have remaining inventory can be an opportunity, as the builder will want to realize their profits and move on to the next project. Based on the housing start data over the last 12 months, it is virtually guaranteed that there will be these types of projects in most cities across the country to choose from.
Besides price incentives, a buyers’ market affords you the opportunity to really compare your potential builders. Take the time to ask about warranty, training procedures for operating your homes components, maintenance guidelines & customer care protocols. I can promise you that you will be amazed at the differences in responses you will get — this is where the really great builders differentiate themselves from their competitors.