*Misc REALTORS* A question about developer increasing prices on new builds.

10-05-2020, 12:28 PM

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#1

Fozzy13
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Misc REALTORS A question about developer increasing prices on new builds.

I have a question about new builds and increasing prices.

What are the implications for me as a buyer who has $ down on a house at X price but the developer keeps increasing and the home prices? Particularly in the short term...around 2 years?

I havnt even picked out my options yet and the prices have increased 9.5%(~23k)

edit: To be clear, my price is locked in already. Im wondering about the resale value and how I would be positioned in the near future with my house costing tens of thousands less.

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10-05-2020, 12:32 PM

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#2

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10-05-2020, 12:33 PM

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#3

OliverHeldens

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If you've already put down a nonrefundable deposit, I'd recommend you start choosing chit get an actual price locked in. Building costs are going to rise even more over the next 6+ months.

Sometimes in the situation of Condos you can wait them out and eventually get a reduction, but since you already gave them a deposit you lost all leverage to play that game.

10-05-2020, 12:36 PM

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#4

Fozzy13
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Originally Posted By OliverHeldens⏩

If you've already put down a nonrefundable deposit, I'd recommend you start choosing chit get an actual price locked in. Building costs are going to rise even more over the next 6+ months.

Sometimes in the situation of Condos you can wait them out and eventually get a reduction, but since you already gave them a deposit you lost all leverage to play that game.

I meant to say, my price is locked in...im wondering how the increases in process will affect me in the near future when I sale...based on other similar experiences.

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10-05-2020, 12:44 PM

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#5

MuzzieChik786
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Originally Posted By Fozzy13⏩

I havnt even picked out my options yet and the prices have increased 9.5%(~23k)

So you already have equity in the home before you've even moved in?

What exactly are you complaining about? O_o

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10-05-2020, 12:47 PM

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#6

Fozzy13
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Originally Posted By Anachron⏩

Not sure what the question is.

The entire premise of speculating real estate is to buy pre build, then sell when the price increases.

I was under the impression that when these prices increase, then its basically equity in my pocket but maybe its not that simple...

Some of the info I got from google made it seem like it wasn't so simple and there were other factors involved. One of the things I read, is that when it comes to resale, that the houses wouldnt be used as comps...so lets say I buy the house at 250k, 2 years later (assume the developer is done building...but the last homes in the development sold for 300k) then its not so clear cut to assume that my home would sale for 300k.

But IDK how exactly true any of this is and I also suspect is depends on the local market.

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10-05-2020, 12:48 PM

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#7

MuzzieChik786
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Originally Posted By Fozzy13⏩

I was under the impression that when these prices increase, then its basically equity in my pocket but maybe its not that simple...

Some of the info I got from google made it seem like it wasn't so simple and there were other factors involved. One of the things I read, is that when it comes to resale, that the houses wouldnt be used as comps...so lets say I buy the house at 250k, 2 years later (assume the developer is done building...but the last homes in the development sold for 300k) then its not so clear cut to assume that my home would sale for 300k.

You're thinking way too much. lol.

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10-05-2020, 12:49 PM

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#8

NickyEyes
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It is basically automatic equity in your pocket. You would need to have the home appraised (about $500) in order to prove your equity, but you really don't need to do that unless you're selling the house, refinancing or looking to get a home equity loan.

If you're selling it, the buyer will be the one paying for the appraisal.