Livingston and Washtenaw County Parade of Homes 2015

Save the date!  June 12^th through the 14^th is the 2015 Parade of Homes.  A $10 ticket can be purchased at any of the homes and is good for all locations. Ages 16 and under are free.

Take a look at the best of the newest homes in the area.  Meet the builders, get ideas on decorating, whatever.  The location of homes is still being updated so check the website often for most recent information.

Starter Homes Not Being Built?

It does seem that builders are going with more mid- to upper-price ranged homes.  This article is a national snapshot, but there’s no doubt that the increase in material and labor costs and the shortage of skilled tradesmen is having an effect.  And vacant land prices are rebounding, too.

I’ve seen build jobs routinely go over the estimate and small, local builders can find it challenging to get construction loans for their clients, although that is getting better, too.  How much is one reason and how much another?  I’m not sure it really matters. 

I believe that a lot of folks are still not confident in the economy even though the major indicators are looking good, interest rates are staying low (for now), and the stock market is doing very well.  What are your thoughts?

New Construction Market

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

New Home Construction Summary-Jan 2008

In a previous post, I reported on an industry survey of new home construction that is conducted monthly by Bank of America. With their kind permission, here is a summary from the January 2008 report.

New home prices and incentives to buyers continue to increase while time to sell is taking longer. Nationally, part of this is still an over-abundance of inventory, but as many builders are now reducing standing stock and beginning new construction only upon receipt of a signed puprchase agreement, this inventory continues to drop.

New home affordability, attractive mortgage interest rates and the dropping inventory will help this sector over the next 12 months.

The Detroit-area market was the nation's 36th largest for all of 2006. This latest report indicates that traffic at new models is still pretty slow and prices continue to drop, while time on the market increases - pretty much in step with national trends. In this market, the builders with the most exposure are Pulte, Toll Brothers and Centex, but there are a lot of great smaller, local builders, too. Many are also doing remodeling work in addition to new construction.

It's a great time to get a bargain on a new home, but shop carefully! There are many, many great deals available on exisiting homes, too, and you can often get more for your money with a re-sale home. Work with an experienced, full-time real estate professional and mortgage representative to get the most from this strong buyer's market.