Is this the market or is it too aggressive? I appraised a few newly constructed units recently in a development in Sacramento’s 95829 zip code. It was interesting to go into the sales office two times over 45 days only to find that prices had increased by nearly 4-6% over this short time period. Is this the story you’re seeing in the real estate trenches or is it too quick? Whatever the case, it’s definitely not sustainable over the long haul to have values increase exponentially like this.
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That trend has been going on for a couple of months now. This past August my fiance and I went to purchase a new home in that area for the price of $198k, but being new construction there weren’t any available so we were put on the waiting list. Well our name came up in October and the same house was now $213k.
Very true Derek. Thanks. The market in general has easily been increasing for several quarters now after it hit bottom in early 2012. Congratulations on the purchase. That’s wonderful.
Wholesale costs of construction have been rising quickly over the past year.
New home prices don’t increase in smooth increments, but there may also be incentive changes that you don’t see on the sheet, lot premiums, specification changes, etc.
Well said Jeff and true. Thank you. I would say their increases still need to reflect the market though.
Wow, as a wise yogi once said: It’s like Deja Vu all over again.” I wonder how much of this may be aimed at long distance investors?
Thanks. It does remind me of the previous New construction boom where prices would increase by 10k per month.
Ryan, Sounds like this would make your job all the more difficult.
It sure does make it interesting. Thanks Troy.