I was out the other day with some buyers who are relocating to Salem Oregon. They want a new (2006) or newer built home. After narrowing down their choices to 13, we forged ahead with our day. After walking through several nice homes, we came to a home that we had seen before and to our amazement the builder had raised the price $10,000. What??
What you need to know is that in Salem builders are motivated to sell their homes. EVERY OTHER builder is dropping their price by $30,000, and this one raises his price. Now granted he added backyard landscaping since the last time we were there, but what is he thinking? New construction (overall) has an 8 month inventory here in Salem.
I ran the absorption rates for my clients for “comparable” homes and the inventory was actually 17 months. (the smaller and less expensive new construction sells faster and was pulled out) So what is this builder thinking? I feel bad that his agent must not be giving him the same numbers I am giving my client. I know he has a contruction loan on the house, so he is making payments every month. Even if his mortgage payment was only $2,000, he is going to burn through $34,000 in that time frame. While this house is nice, it sits in an existing neighborhood of okay homes, and it backs up to a very busy street.
Sometimes, you just have to scratch your head and wonder what people are doing. The good thing for my buyers is that homes that were out of their price range, are now in, and we had 5 that they really liked. This is a great time to be a buyer.