Buy Now Before the Current
Housing Stock is Depleted

By Richard Komer, First Vice President, Building Industry Association of Southeastern Michigan

Market challenges translate into market advantages for home buyers, particularly right now.

The basic principle of supply and demand will tilt away from shoppers for newly built homes because economic conditions are pushing builders to sell off "spec homes" built before the current slowdown in home purchasing and not replacing them in the same numbers. About half of such properties, especially single family homes, in Southeastern Michigan have been sold in recent months according to a report by Housing Consultants, Inc. and remaining ones are drawing traffic and sales this spring because they're priced to move.

Until a definitive housing rebound, builders and their lenders hesitate to commit resources to as many spec homes as they traditionally did, a dramatic change for consumers who count on selecting a finished new house for immediate move-in. After current low inventories are snapped up, virtually all new homes will be custom-ordered as fresh construction - potentially increasing the price and waiting time. This is a disadvantage to purchasers who have sold their homes and transferees, both of whom need quick occupancy.

Builders still have a "let's make a deal" approach to inquiries about existing spec homes, of course while the supply lasts. But the ample choices, quick-occupancy convenience and "deep discounts" available when major companies had dozens of spec homes available will become bygone bargains.

For now, builders are eager to recover construction and financing costs so they can move ahead on new sites. Unprecedented values remain -sales that won't soon be repeated.

There's no time to dawdle if you hope to be among the last savvy shoppers who snap up mint-condition models at prices unlikely to be offered again. Visit a builder's sales center this month to see what attractive deals look like -- while they last. Prices are projected to rise, so there is urgency as this segment of the buyers' market begins to disappear.