We've been ready for it...now that builders are selling their existing homes and starting to build new ones...the prices are going to go up.
I know I sound like I'm beating a dead horse, but buyers - if you are in the market for a new home...please get out there and do it now. You've heard me tell you why before, but I'm going to make this short and sweet:
1. Interest rates are going up.
Your dollar will not go as far if you were originally looking at a loan at a 6% interest rate if your new rate is 6.5 %...What might have been a $300,000 home for you, may now be a $270,000 home.
2. Materials are going up.
That's right...the cost of oil has now increased the products to build homes. Some of the things that oil is used in : roofing materials, vinyl windows, paint, etc. And even if it doesn't contain oil, it uses oil to power the machinery to make it : sheetrock, framing materials, etc.
I love seeing the new activity of builders putting up new homes. That means that people are getting back to work, feeding their families and having fun. Buyers, if you were waiting for rock bottom, I think there's a good chance we've hit it, especially with new construction. The Ada County Association of Realtors shows February as our lowest selling month with increases since then. If interest rates go up and building costs go up, prices can't get any lower. I spoke with a builder this week who told me that for the same house my customers were considering (2200 square feet), his new bids would raise the price by $8,000-$10,000.
Hey, great for them...they'll have instant equity (now when was the last time that happened?). Jump on the opportunity to buy these builder's existing, brand new homes now, because they will have to raise the prices the next time they build the same plan.
And for all of my builder friends out there - I LOVE seeing you're contractors working out there...it's nice to see a big truckss of trusses driving along Eagle Road again - warms my heart!
Have a great weekend,
Kit Fitzgerald
