Boise Real Estate's Spec Homes Disappearing
Many of today’s new home buyers are sitting on the sidelines awaiting “the bottom”.
Aside from the fact that those buyers will not be able to identify the bottom until after the market has turned upward, they have another challenge.
And that’s the fact that when the builders resume building spec homes, they won’t be offering them at the prices they’re offering them for now.
That’s because builders who still have spec homes to sell are blowing them out at cost, or below cost, to get them off the books and pay off their construction loans.
Very few builders are courageous enough to start a spec home in today’s market.
Instead, they are only doing build jobs with big non-refundable earnest money amounts to ensure that they have a firm sale before breaking ground.
Those pre-sold homes have a profit built into the price that is absent with a standing spec home that is being blown out at cost or below.
I am already seeing a scarcity of quality spec homes in desirable subdivisions as builders liquidate their spec home inventory and sit on the sidelines, awaiting increased demand.
So, waiting for the bottom means your choices will be fewer and it will likely cost more to buy the same home later.
June 3rd, 2008 Posted in About Our Area
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