I saw the report today about new homes sales being at their lowest rate in 7 years. Bad news for the economy, yeah, but what if you want to buy a new house? There are unbelievable deals to be had out there, especially on what's called "standing inventory". In other words, houses that have been built that the builder is carrying and making payments on. I was in a model home a few weeks ago that the builder was finished using and trying to sell. Remember that model homes are often upgraded to the max, and often have built in details that are not even offered as upgrades by the builder. This one was in a lovely master planned community with 7 builders, a world class clubhouse and pool, and gorgeous lakes and hiking trails, all within 30 minutes of downtown Denver.

The house had been listed at $349,900, but had just been lowered to $324,900. I spoke with the sales agent (like car salespeople, he was not allowed to make the final decision), who told me he would be happy to submit an offer to the builder of $285,000! Here's a direct quote from him - "They would squirm around a little, and then come back to you between $290,000 and $295,000". That's a 25% price reduction! Remember that the $349,900 price was simply the base price with the cost of the upgrades added in, so that's an honest to goodness price reduction.

As exciting as living in a brand new house is, there are some budget items to keep in mind that people often forget after looking at models (remember, upgraded and decorated as much as possible). Most builders will landscape the front yard, but not the back. Do you want a fence? The expense most people totally forget about is window coverings. Depending on yard size, quality, etc., these items can add up to over $30,000! Of course, if you're building from the ground up, you'll get to visit the design center to pick out cabinets, countertops, and flooring. Now these folks know how to sell!  They often have sample rooms set up with stunning details and geegaws - all the most expensive stuff they have. Then your "design counselor" will say things like, "You don't need anything this fancy, let's go down a step or two". Wait till you see how much "down a step or two" costs. And you pretty much have to do it, because the base level items look awful.

I'm not trying to be cynical or negative here - New homes are a wonderful thing. I just think you need to be aware that passing an a pre-owned house because you don't like the paint colors may not be the most cost effective decision. Educate yourself! Find out the true costs. Rely on the advice of an experienced, reputable Realtor, and slow down. One of the benefits of a slow market is that you don't have to jump on the first livable house you see. Let's be careful out there.