By: Henry Rabell
Sr. VP with Bosshardt Realty Services, LLC
It was a remarkable rebound year for most new home builders. A perfect storm of low interest rates, competitive labor costs, fewer short sales and foreclosures combined with the lack of desirable inventory to spawn the new construction, home sales bonanza of 2014. This mini boom was underpinned by subdivision lot prices. It appears that, in many cases, such lots were purchased by savvy builders at a fraction of their original purchased price via foreclosure sales, or by developers simply cutting their losses on their original capital investment. This mix of factors catalyzed the new home sales resurrection. Builders were able to use the money saved from discounted lot prices and apply it toward enhanced home features. In turn, these bells and whistles, along with prices that rivaled older, less efficient used homes, motivated home buyers. Think about it: The benefits of a new home which includes granite counter tops, crown molding, energy savings components, a modern kitchen and space designs, plus new, unblemished carpet versus the costs associated with updating a used home in need of an eventual roof, AC unit replacement or deferred maintenance issues (often left over by the previous home owner)—and the new home became the undisputed, relative bargain.