My prediction is that this year there will be 15% more new home sales this year than last. According to the Southern Nevada Home Builders Association, 3,894 new homes were sold in 2011 which was the lowest amount in more than three decades. Some experts predict 4,000 new homes will be sold in 2012. And I say it will be 4,475 units. Why?
- Lack of resale inventory. Did the media mislead you? That’s right, lack of resale inventory. See http://www.houseofvegas.com/?p=815.The scarce “used home” availability will shift some buyers into buying a new home because of the competition on resale properties. These buyers started in the resale market but are fatigued from being outbid by investors and owner-occupied buyers.
- Short sales are nothing but short. Buyers who have experienced failed short sale purchases (happens often) and long lag times will give up and look to new homes.
- REOS have been picked clean. I mean this as a double entendre. First, all of the good REOS have been purchase. And second, the ones that remain have been stripped or need significant work. When buyers consider the repair costs they start to ask, if I’m going to pay this money for a used home, why not pay a bit more and buy a new home built specifically for you?
- New home builders are offering significant incentives to buyers such as 10′s of thousands in upgrades, closing costs allowances, or super-low interest rates. Ask me about these if you are interested.
I strongly believe that these four items and especially the lack of good resale inventory will cause the new home sales to out-perform even what the home builders are currently forecasting. Do you think I’m right? Am I completely wrong? What do you think? Let’s see…