I’m not sure that I want to even talk about new construction in Salem Oregon. Things are just ugly.
See that green area on the chart. That is the number of homes that hit the MLS for new construction. See that blue area underneath?…those are the homes that actually sold.
That nice nose dive by the blue area, is our local builders in trouble.
Many builders resorted to terminating their MLS listings and rent out properties. It is not uncommon these days to see for rent signs in front of $400,000 homes.
Not surprisingly, this has forced the price of new construction homes down. The median price for 2008 was $246,450 which was a 20.5% drop over 2007.
Many of the new homes that are being built are much smaller and without all of those upgrades. Forget the granite counters and tile floors…formica and vinyl flooring are what is selling.
I would expect to see many new construction homes taken off the market and rented, or end up at the auction blocks as builders and sellers are unable to sell them.