Wednesday, March 10, 2010

Up in Arms

The big topic of discussion around our neighborhood is the news that our builder replaced their entire selection of houses for this area with new ones that cost about 25% less then the going rate. Which is, of course, about 25% less then what the unfortunate souls who bought at the peak paid.

Since the neighborhood is only half developed in the current phase and there is another phase that will be entirely the new style houses, the style of house everyone has today will be vastly outnumbered by the new type. It is pretty amazing how passionate people are about this topic, when they basically have no control over what happens.

Ostensibly the concern is because the new houses have significantly less fancy exteriors and so won't 'fit in'. In reality, of course, everyone is worried about the further drag on prices since the new houses are still reasonably close in square footage, but will be driving down the all important average price/sq ft metric that real estate comparables are all about.

With the expiration of the tax credit looming, the builder is also speccing the shit out of the neighborhood, as they race to build homes ahead of this spring's expected buying frenzy. As of right now there are three specs fully completed (old style), one being framed, one being dug, and four staked out for digging.

I guess on the good side we won't even remotely be the 'new neighbors' in a few months, and those real estate taxes should go down along with our valuations. Got to look on the bright side, right?


Suzi said...

sadly, this happens a lot. Our neighborhood is going through the same thing. Our builder pulled out of the neighborhood about 1 1/2 years ago because they couldn't sell anymore homes at the price and design we built at. They came back in last year with a much cheaper price point and noticeably less expensive design. It's frustrating and our home values are screwed, but I would rather have a house built next to us then no house at all. After 3+ years of an empty street, we are finally getting houses built. It's the way it goes.

Steve Eck said...

Yeah, I figured it would take at least another 5 years to finish building out our neighborhood and the expansion at the pace they sold homes at last year. Considering they've already invested 4 years, I can see where staring at a 10-year development plan would make the builder reconsider. We'll have to see what the new homes look like, hopefully they'll fit in.