Focus On Newer Construction

This week our newer construction homes are back up on the agenda. For a definition of the homes we're discussing, go back to take a look at the first post I did on this segment last year.

Our inventory of these homes is higher than it was when I last reported on them back in November. We're up to 9 active listings on the market. Somewhat surprisingly, none of them are REO's. Considering that this segment has been very heavy on distressed properties, that's noteworthy. 6 of them, however, are short sales. I keep expecting to see short sales gain market share and REO's lose some, so this might be an early indication of that. Or it could just be a fluke. We'll have to wait and see.

Sales activity has been somewhat light. We have 4 contingent listings (3 short sales & 1 REO), and 3 pending listings (2 SS/1 REO). In the market as a whole, we've had more properties either contingent or pending than we've had active for several months now, but this segment is slightly skewed the other way. As I've pointed out before, this isn't our most active segment overall. The entry level house market is on fire. When you move up in price, things are still moving much better than they were, but not quite like the sub-$200K house segment.

We've only had 4 sold units in this segment in the past three months(1 REO/2 SS/1 Trad). That equates to about 10 months of inventory if you include the contingent listings as I do in my normal calculations, compared to around 4 months in our total market. On a small number of closings, it appears that prices remain pretty flat on these homes.

I think that the price point for newer homes is one of the reasons that we've seen slower activity, but part of it has to do with what type of inventory we're looking at. While the activity over the past three months has been slow, we saw much more robust activity in the three months previous to that with 11 sold units (5 REO/3 SS/3 Trad). When you have more REO's, you have more sold units. They are usually priced aggressively, and you don't have to play the short sale waiting game. In our market as a whole, when we start to see REO listings drop off, our sales drop off as well. That's going to be true for a little while, and that's a topic for another post. I don't know that the demand changes a lot, it's just that there isn't as much that looks attractive to buyers.

Next week I'm going to freshen up some advice that I wrote last year to buyers trying to get some traction in this crazy market. You are definitely not going to want to miss that.