I did some research last August to see how many unsold new homes were on the market. At that time there were 254 new homes in the Mat-Su area that at least had a foundation in the ground and were waiting for a buyer.
That was a lot of homes. Just a year before it was very difficult to find a new home for a buyer. They always had to wait for one to be built. It was obvious that the builders had gotten a little ahead of the buyers.
Just yesterday I attended a closing on a new home built by Ron Kuzina. What a fantastic home! The price was $242,000 for a 1,550 square foot ranch on a 1 1/2 acre lot and it had upgrades and quality galore. To find this home, the buyers and I looked at between 25-30, (I lost track), brand new homes in this price range. These homes were all finished or close to finished and most of them were one story ranches. That really drove home the point that there were a lot of new homes on the market. It also really drove home the value of the one the buyers chose. It was obvious when we walked in. That’s the house still under construction in the upper left…click on it to expand.
So, what’s it like today? As of today there are 154 new homes on the market. We have bitten off a 100 home chunk. That’s better, and going into spring I expect we will erase most of the remaining unsold inventory. But it does point out a quandary for builders and home sellers alike. You have to compete with those unsold homes already on the market. I’ve looked at a lot of them and there are some real nice homes for real nice prices on the market.
If a builder does not currently have a model he is competing with all the unsold brand new homes already on the market with “pie in the sky”. It’s still possible to sell that way, but much more difficult. Buyers have a hard enough time looking past the bare studs of an unfinished home, let alone one that is only builder’s mind. It’s really hard to sell a home with only photos and plans.
And home sellers also have to compete with those new homes. Even though buyers realize they will have to plant a lawn, pave the driveway etc., the allure of a new home is tough competition. Existing homes need to be priced significantly under the new home market in order to complete.