Focus On Newer Construction

Another crazy week, so here I am pushing off my "Focus On" post to the weekend again...

This week we're due to take a look at the activity on newer homes. As a refresher, what I mean by "newer home" is a house (not including condos) built in 2000 or later. I'm only including resale homes in this category, so homes that are being sold by the builders are excluded.

Most of these homes were sold at or near the peak of the market, back in the days of easy credit. So not surprisingly, the big bulk of these resales are distressed properties. Our inventory has been thinned out pretty much across the board, and these homes are no exception. We only have 3 active listings at the moment, 2 short sales and a traditional seller. We have 5 of them in contingent status, 4 short sales and 1 REO.

Sale activity has been pretty good on these units. We currently have 6 pending sales, with 3 REO's, 2 short sales, and one traditional seller. Over the past three months, we've had 8 sold units, with 5 REO's, 2 short sales, and 1 traditional seller.

On limited data points, it appears that these prices have been pretty flat for the past several months. These homes are above the price level that is our most active, but they do tend to sell pretty quickly. These types of homes used to be almost all move-up buyers, but those types of buyers have been rare in this market, so what we're seeing more of now is first time buyers with somewhat higher incomes buying these homes. The general rule of thumb is that newer homes hold their value better in down cycles, and appreciate better in up cycles, and that's probably going to be true here. I expect that when we start to see appreciation, these homes will do better than the market average.