The Race to $2.1m, and Then...
Posted on Wednesday, October 24th, 2007 at 3:55am.Several weeks ago, the "lower end" of the Tree Section's $2m+ segment saw much new construction clustering around $2.3m. For instance, at the end of July, there were no new homes under $2.3m, and at the end of August there were 3 under $2.3m.
Now there are 5 new construction listings under $2.2m, and another at $2.249m.
Could this be the beginning of the builder-initiated price movement we've been watching for? (In "Quitter – Bellwether," just last week, we said it seemed that no such movement was happening. What a difference a week makes.)
This new clustering is partly the result of 3 price cuts this week. Let's look at everything at $2.249 and down to $2.0m – remember, these are all new construction (click any address for details):
Here, it's not news when we see a new listing in the Trees at around $2.5m – but it is news if the builders/sellers are acting like they want to make a deal.
Let's be honest – anyone who's now offering a house at $2.2m or so will be ecstatic to get a sale at $2.1m or so. Better to do a deal than hunker down for the winter, accumulating DOM. And as they sell, guess what happens to the remaining listings?
Now there are 5 new construction listings under $2.2m, and another at $2.249m.
Could this be the beginning of the builder-initiated price movement we've been watching for? (In "Quitter – Bellwether," just last week, we said it seemed that no such movement was happening. What a difference a week makes.)
This new clustering is partly the result of 3 price cuts this week. Let's look at everything at $2.249 and down to $2.0m – remember, these are all new construction (click any address for details):
- 2105 Oak (5br/5ba, 3250 sq. ft.) began at $2.349m in May. Now at $2.099m (-$250k).
- 3104 Pacific (5br/5ba, 3200 sq. ft) remains at the $2.149m where it started in late July. (They just pulled a bogus re-list.) No price cuts yet, but MBC noted in this story the price-cutting ways of nearby new homes in 2006.
- 1417 Elm (5br/5ba, 3000 sq. ft.) [pictured] hopes for $2.175m; this listing began partway through construction, in late August; the pics are better now.
- 648 35th (5br/5ba, 3600 sq. ft.) began at $2.450m on July 9, but has already cut quite substantially to $2.195m (-$255k in 100 days).
- 2309 Pacific (5br/4ba, 3200 sq. ft.) is at $2.195m, down $104k from the start in mid-May. (What's with the garish, huge plastic sign in front?!?)
- 1901 Poinsettia (5br/5ba, 3200 sq. ft.) is at $2.249m, down $250k from its start in late August. (This one has issues, as noted by this MBC story.)
Here, it's not news when we see a new listing in the Trees at around $2.5m – but it is news if the builders/sellers are acting like they want to make a deal.
Let's be honest – anyone who's now offering a house at $2.2m or so will be ecstatic to get a sale at $2.1m or so. Better to do a deal than hunker down for the winter, accumulating DOM. And as they sell, guess what happens to the remaining listings?
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