To add a bit more information to the situation/opportunity we find ourselves in as we look for a new home, here's a recent report on what's happening to builders in our area:
Single-family home starts through the first half of the year are down a combined 36 percent in Kent and Ottawa counties from last year, and down 56 percent from two years ago.
The industry is being hard hit by Michigan's sluggish economy, with some of the highest unemployment in the country as well as a swelling inventory of existing houses for sale.
Down 36% and 56%? Ouch! I'm not sure how these guys can stay in business. Either there's just so much profit in each house that they can survive on a fraction of what they used to make or maybe they've simply had to let some workers go.
A builder friend of mine told me that he's doing a lot of add-on and remodeling work these days simply to keep his guys busy.
Now the question is, as a buyer, what's the best way to capitalize on this situation? Is it to wait? Or to buy now knowing there's a drop still left but that no one buys at the bottom? Or is the drop off so bad that there's a long, long time (a couple years) left before we see positive movement again?
So many factors to consider...
I live in SE Michigan, and yes, there are lots of "for sale" signs around, but I can't understand why asking prices are still sky high for what you get. I think it is a combination of fewer buyers making enough to buy, plus who would overpay for a house that is priced high? The low-end, older homes are much more realistically priced than the newer, larger ones.
Posted by: Jen Weinblatt | August 02, 2007 at 12:35 PM