Editor’s Note: Every Friday, WRAL TechWire takes a deep dive into the Triangle real estate market.maybe now best time to buy a house In Triangle, WRAL TechWire reported last week. This week we delve into how and why buyers are considering new construction homes in the Triangle. Because builders now offer great financial incentives.
Durham – For those considering buying a home in the Triangle, now a wonderful time, Especially for buyers looking to trade new construction homes rather than buying existing homes listed on the public market.
The reason is that builders, especially publicly traded homebuilders, may be looking to attract homebuyers by expanding financial incentives to draw them to the final table.
Gian Hasbrock, Founder and President of Wowism, a company specializing in new home sales and marketing education, training and consulting, said: His interview with WRAL TechWire this week. “Especially those interested in entering the real estate market at a time that is clearly very transitional.”
Former President Hasbrouck Home Builders Association of Durham, Orange and Chatham Countiesmany of the current homeowners who might otherwise consider moving to a new home are taking the plunge because mortgage rates have recently increased as the Federal Reserve raises interest rates to keep inflation in check. , pointed out that they are currently reluctant to do so.
The status quo remains because people don’t want to buy a home using a mortgage with interest rates much higher than current mortgage rates, Hasbrouck said. This means that the inventory of available homes for sale remains low in the current housing market, he said.
And while the reason that inventories remain low in the region is different than a year ago when inventories were at record lows, the reality is that those who want to buy a home are at times constrained and restricted. We are still facing a market where we may feel that
As a result, some home buyers, including first-time home buyers, are considering new homes.
“The number of people who are looking to buy and are currently looking into a new home is up about 28% from just a few months ago,” Hasbrouck said.
data Homebuyer sentiment toward new homes continues to recover, rising from 21% in the second quarter of this year to 27% in the third quarter, according to data provided by the National Association of Home Builders. This is a 28.6% increase from the previous quarter.
“There remains pressure for builders to respond to a market that still exists,” Hasbrouck said. on the one hand, but Termination of real estate contract As WRAL TechWire recently reported, it has increased this year. This includes new homes, Hasbrook told his WRAL TechWire, adding that in January it was about 8% of deals, but recently that number has dropped to 1/4 of new home contracts. said to be approaching.
What this means for buyers
Builders, especially publicly traded construction firms, are strongly encouraged to maintain a “constant level of monthly sales per community to maintain credibility.”
“That’s what Zonda’s latest research tells us,” said Hasbrouck. “Even though his 25% of builders have cut base prices, the property market remains local.”
Locally, the Raleigh market ranks second nationally in pending new home sales, according to Zonda. data,Please refer to the following.Construction of new housing is underway blistering pace also in the triangle.
“Looking at national numbers, especially from the Triangle, can be illusory,” Hasbrouck said. is declining, but markets like the Triangle are actually up from a year ago.”
That means there may not be a big change in home prices locally, especially for new homes.
“I don’t think we’ll see wholesale price reductions until these public builders can’t make two sales per month per community,” Hasbrock said, adding that now new construction communities are getting more He added that the average number of sales for the is over 2. .
So what can a savvy customer do in the Triangle real estate market?
points for buyers
Key Takeaway: It’s important to understand what you want and how you want it. In other words, buyers and their agents can negotiate incentives.
But Hasbrock said he understands that builders have little incentive to lower the final sale price of new homes, especially in areas where home sales are already taking place. He pointed out that not only do builders not want to lose money building new homes in new communities, but builders rely on offering housing products that bring strong positive customer sentiment. did.
“Builders don’t want to betray buyers who may have paid a higher price,” says Hasbrock. “Builders are reluctant to lower the final selling price because that’s what their whole marketing plan — creating lifelong customers, die-hard fans — is self-defeating. I just bought a house and it cost me $50,000 more than you did, and now that I’m selling a house, I’m going to feel terrible about my purchase.
what to ask for
So smart and knowledgeable buyers can ask for something else if builders are free to offer incentives without lowering the selling price.
“It’s getting financial incentives, like interest rate buydowns and paying closing costs,” Hasbrock said. “It’s the most effective place to negotiate a deal.”
But to receive such incentives, Hasbrock said, you may have to agree to use the builder’s preferred vendor for mortgage financing or lawyer closing.
“Prospective buyers need to be aware if builders have already lowered the base price and have realtors look into it,” Hasbrook said. “Another thing they can target if they’re in the early stages of negotiations, like a pre-sale, is a lot he’s at a premium.”
Incentives are more likely to be accepted by communities that fall below the benchmark of twice-monthly sales, Hasbrock said, but buyers are encouraged to work with agents to negotiate incentives in other communities in the triangle. I can.
Editor’s Note: Gian Hasbrock is affiliated with Durham-based Jon Parker Real Estate as a real estate consultant. WRAL TechWire reporter Jason Parker also has a valid real estate license in North Carolina and is affiliated with the company.