November 2010
Spec Home vs. Resale Prices
This article offers an overview of the spec home list pricing trend and the resale sales price trend over the last five
years. Contrasting these two trends provides valuable insight into pricing
issues.
From mid 2005 through
mid 2007 the median resale sales price was basically flat. Then they fell for
24 months and have been bouncing along the bottom since then.
In mid 2006 the new
spec home list price began a 36 month fall which then flatted out for about 8
months. It began declining again in November 2009 until May 2010 and since then
has beeb relatively flat. This presentation offers these valuable
insights:
1. Spec pricing began declining about nine months before
resale pricing.
2.
The rate of resale median sale price decline accelerated as the proportion of
REO sales increased.
The source of the data for our spec pricing study is the
Ultimate New Homes Database. This is not an all inclusive list of specs,
but is fairly representative of the whole. Some, but not all, of the spec pricing data includes some of
the incentives being offered by the builders. The source of the resale pricing data is ARMLS.
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2010 - This information is compiled and written by Ultimate Information Systems,
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