I participate in, and receive the results of a monthly survey of Realtors from across the country. This survey from Credit Suisse is a comprehensive look at various market areas. This month's report notes that the new home market is increasingly driven by buyers that are responding to "great deals, strong affordability, and the fear of higher mortgage rates."
The Metro Detroit data signals that buyer traffic for new construction was short of agent's expectations, that builder incentives were rising, prices were still falling and it was taking longer to sell a home. No surprises there!
There are opportunities to pick up lots or even completed homes at good prices. You do have to be careful about developments that are not fully built out and that have Home Owner Associations (HOAs), though. Typically the developer keeps control of the HOA until it reaches some pre-determined occupancy rate, 50%, 60%. At that point management transfers to the residents who elect officers.
Many smaller builders and developers have gone out of business and your selection of communities is somewhat restricted to the larger production companies. Some consumers are buying lots and operating as their own 'general' contractor, finding the tradesmen to do the specialized jobs like HVAC, electrical and plumbing. House 'packages' from some area lumber companies are also another choice for a new built home. If you decide to go this route, be sure that you have enough time to attend to all of the details required with building your new home. Often it's better to pay a little more to get an experienced general contractor on the job site as your 'eyes and ears'.
It's also a bit tougher to find financing for vacant land and for construction loans, but they are available. Vacant land sales are still depressed. Here's a quick summary of Livingston County YTD vacant land sales as of the end of February for the last seven years:
2005 - 67
2006 - 41
2007 - 17
2008 - 10
2009 - 12
2010 - 18
2011 - 16
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