When it comes to new home construction subdivisions, Buyer Beware
Greenville SC (PRWEB) June 19, 2010
While sales of Greenville SC Real Estate homes have stabilized over the past 6 months, those in the real estate industry find themselves on a different playing field since the deadline to obtain the federal tax credit has expired. Up until April 30, the active segment was first time home buyers looking for homes under $150,000, with a stagnant market above $250,000. Through May of 2010, 73% of the homes sold were under $200K. Through this period, inventory in the lower price point had shrunk and it was difficult to find good homes for those seeking the tax credit.
In the past six weeks, a period when one would expect to see seasonal high activity, buyer interest has declined and inventories in all price points have increased. It appears that a solid buyers market will affect Greenville SC home sales for the rest of the year, particularly in homes priced above $200k. Throw in record low interest rates plus more available jumbo loans, and making a purchase looks even more affordable.
New home construction continues to struggle, mostly because financing is still difficult to obtain for the builders. A buyer won't find many spec homes out there, but there are a lot of builder incentives for those who want to start a home to custom specifications. Just driving by any entrance to one of these communities will bombard the viewer with banners galore advertising FREE everything. Buyers can anticipate getting about half off on upgrades plus closing costs thrown in if they use builder's lender. Local RE/MAX Realtor Lee Cunningham offers this advice, however:
"When it comes to new home construction subdivisions, Buyer Beware", he says. "There are a lot of unfinished subdivisions that may offer a good deal on a home, but also incur some risk for the buyer because they will probably not be finished for a few years. A wise investor will be sure to check with a Realtor to see which subdivisions have gone bankrupt and what the new builders are offering compared to the original ones."
The Greenville foreclosures market has leveled off over the past few months, compared to double digit increases in distressed houses since 2007. For Greenville County, foreclosures are up only 8% over last years figures, but that is well below the increases of 28 to 32% over the last three years. The current increase partially stems from previous postponed foreclosures that have finally made it back to the market after failed loan modifications or short sales. There will probably be more increases in the next year as a second set of high risk adjustable loans reset with higher interest rates. The average price point of $80,000 is an important aspect of local foreclosures compared to the national average. These homes reflect homes that originally sold in the $100-120,000 price range and are limited in size and quality. Homes above 2000 square feet with a price point above $200,000 are much more difficult to find.
The downtown Greenville condos market was once a solid performer as investors and owner occupants flocked in to live close to the coveted Main Street scene and activities. Prices have softened a bit, but the difficulty in financing condos and townhomes has caused those sales to decline. According to the Greenville MLS, 30% of the recent sales have been cash and half have been conventional loans with substantial down payments. The average price of these properties sold in the central downtown district was $409,000, which indicated typically larger units.
Much of the slumping real estate market is due to lack of buyer confidence and a national unemployment rate that is slow to improve. Greenville County's unemployment rate has dropped a couple of percentage points to 10.5% this year and the outlook is bright for the area. Several of the major employers have committed to expansions and newcomer Proterra, Inc., will soon begin producing electric hybrid buses in Greenville at the Clemson University International Center for Automotive Research campus. BMW reports they will increase production at their new manufacturing line. And Southwest Airlines thinks Greenville is on the upswing too; they recently announced that they would begin to serve South Carolina at the Greenville-Spartanburg International Airport later this year. Having Southwest on board is big news for our area because their discount fares will force the competitors into better pricing. Plus, it's a big advantage when local leaders are recruiting new corporations to the Upstate. Look out…here comes the Upstate of South Carolina!
For more information from the experts in Greenville real estate, contact the author below:
The Cunningham Team
Re/Max Realty Professionals
600 Independence Boulevard, Greenville, SC 29615
Office: (864) 679-0707
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