New home prices are killing some resales

By
Real Estate Agent with Century 21 Sundance Realty

Here in the Daytona Beach Market many of the builders have drastically reduced prices of their new homes to reduce inventory.It sometimes makes it very difficult for a homeowner to compete with them when trying to sell their own home.I recently had a listing appointment with a customer who had a lovely 1800 sq ft home[living area] whoi wanted me to list it for $269,000.A year and a half ago it would have been in the $270,000-$280,000 range.Despite showing him the area comps and the newspaper headlines he was very difficult to budge from his preconceived price. Finally I asked him to take a ride with me.We drove 4  blocks to a new housing developement that I was familiar with. I then showed him 2 brand new 30000 sq ft homes for $233,000 dollars.It blew his mind, as it initially did mine, but this "listing tool' finally convinced him of our market conditions. This home would ,under normal market conditions sell for about $330,000. I immediately got a $40,000 price reduction ,His home does have some features the new one doesn't and he's hoping for a quick sale so he can buy one of the homes I showed him. 

This is one instance where the builders "giveaway' price actually helped.

 

Comments (8)

Lori DeLoera
Century 21 Sundance - Port Orange, FL
As a person who's development is not complete, I can back up your statements on how the builder is able to sell for sooo much less than resales.  Good job using it as a tool. 
Oct 09, 2007 05:09 AM
Diane Bell, Hilton Head Real Estate, Bluffton
Charter 1 Real Estate, Hilton Head, Bluffton, SC - Hilton Head Island, SC
You did a great job educating that seller.  I know it's really difficult for the sellers to understand the dynamics of our markets.
Oct 09, 2007 05:11 AM
David Kelso
Century 21 Sundance Realty - Port Orange, FL
Hi Lori,..I'll bet those that know you think you developed into a very nice person. hehe.I guess you meant your housing development.It sometimes,as I'm sure you know, impossible to compete with the builders.Thanks for the comment
Oct 09, 2007 05:57 AM
David Kelso
Century 21 Sundance Realty - Port Orange, FL

I don't know about Hilton Head,Diane,but it's gotten a bit scary in Daytona.When a builder does this ,he devalues everyones home in the subdivsion and thats unfortunate.I remember we were always taught to 'PUT YOUR MONEY IN REAL ESTATE' you can't lose.I guess we all wish that old adage was still valid.

Thanks for the visit.Y'all come back..heah

Oct 09, 2007 06:01 AM
Midori Miller
Talk 2 Midori, LLC - Daytona Beach, FL
Online Marketing For Real Estate Professionals
David-Love those price reductions...hope it helps. 
Oct 09, 2007 07:44 AM
David Kelso
Century 21 Sundance Realty - Port Orange, FL
Hi Midori....in this market, every little bit helps
Oct 10, 2007 01:12 AM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

YUP, same same same here.  Will kill resale prices and foreclosures/resales will have no other route but to go downwards!

The upside is it will stimulate this yawner of a market!

Oct 15, 2007 12:24 PM
Nancy Moeller
Seven Gables Real Estate - Anaheim Hills, CA

Educating our sellers is key. I think its a great idea to show them their top 3 competitors before listing.

Oct 16, 2007 01:42 AM