Builders Still Missing the Mark

08/30/2018
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Builders Still Missing the Mark

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3 thoughts on “Builders Still Missing the Mark”

  1. Scott Johnson says:

    First time homebuyer? Millennials right? Am I missing where they want single family? They want small, cheaper, easy to maintain. Does that sound like condo, townhouse? HELLO!?

  2. Rebecca says:

    Outside of the new Home Market all the Baby Boomers are also downsizing and taking the same size homes as a new home buyer

  3. Judy Mullins says:

    This is ridiculous! This is not something new. It’s simple builder greed right now because they can make as much money as possible during a very short market window, and blame costs of building products, not enough subs, etc. They have to make the books look good (in terms of margin) to go borrow more money for the next land purchase, and do it all over again, regardless of what is going on in their respective market or better yet the first-time buyer market! Without the first-time buyer, there is no move-up buyer or activity in general. The market becomes stagnant. I’m retired, but worked in the homebuilding business for over 40 years with high volume/low margin and low volume/high margin builders in the SF Bay Area. We understood the “peaks and valleys” in a market and prepared our land purchases and production costs/pricing accordingly. I’m a Realtor now in the Phoenix area, and just watching what is going on in the homebuilding market is so obvious. Most of our local builders here in the Phoenix metro area have marketing professionals in their firms that are not well versed in land purchases, density, construction costs, market feasibility, market research, forward planning, etc. They’re not being pro-active to the market profile in a given area, not being willing to adjust to the changes in the market in terms of density, livability, costs, pricing, location, etc. as needed. They are lazy. It’s much more profitable and easier to just pull “shelf” floor plans and build them somewhere where they think the market will cooperate without true feasibility, or designing product and providing costs/pricing that make sense for that given marketplace. Right now in our area, it’s a no brainer. The market price range that’s absorbing the highest in the resale market is $200,000-$249,999 at 22% share which is the “meat of the market”. Add the $250,000 to $299,999 for another 18% share of the market. It doesn’t take much to do the math to figure out what a builder has to do to capture a market. Those new home builders that understand this, and are building “affordable” homes are selling extremely well, and yes they are on smaller lots, smaller square footages but the buyers are buying them at a fast pace! Keeping the market moving forward. BRIAN, YOU ARE RIGHT ON!!! IT IS FIXABLE BY THE BUILDERS. THEY SET THE TREND IN THE MARKET PRICING WORLD OF REAL ESTATE. When you have pricing gaps of over 50% from median priced new home “spec” versus comparable resale median priced home, that’s suicide. THEY NEED TO DO THEIR JOBS!!!

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