Monday, January 29, 2007
2006 New Home Sales dropped 17.3%
The Jan. 27th edition of the Oregonian had an article about the housing market. Yes the above head line is true . . . for nationwide real estate sales. New home sales fell in 2006 by the largest amount in some time, but they were actually up for a second straight month in December. Hopefully this means that the worst of the housing downturn is coming to an end. When you read the head line above, what do you think? Most stop at the head line and don't bother to read the rest of the article. Others fail to make the distinction between national stats and our local market activity or between NEW home sales and existing home sales.
So what is happening in our local market? On the new home front we see lots of inventory and lots of builder incentives to buyers. Many of the local builders are offering kitchen upgrades, free central air, and/or paying buyer's closing cost. Builders are trying to clear their backlog from 2006, plus get ready for a flat 2007. Some experts believe that 2007 will see a 14% drop in new home sales.
So it is a good time to be a buyer in the market for new construction. But if you have to sell your home in a development that is still building new homes, you may have a tough time. We have been on two listing appointments in the last week in which the sellers' main competition is the builder that is trying to sell off their unsold inventory. In both cases the builder is offering great incentives and pricing. So if you do buy new construction, make sure you can stay in the home for a while.