People Want Less Expensive Homes – And Builders Are Responding

In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory.

To overcome those challenges, many people are working with their agents to find less expensive homes. And with newly built homes making up a historically large percentage of the total available inventory today, that search often includes brand new homes.

People Are Spending Less on Newly Built Homes

The graph below uses the latest information from the Census to show, in June, more of the newly built home sales in this country were in lower price ranges than in 2022:

Last year, only 58% of newly built home sales were less than $500,000. This June, that number was up to 65%. This means more people are buying less expensive newly built homes right now while affordability remains a challenge. 

Builders Are Offering Lower-Cost Options

Builders have picked up on this trend and are reacting accordingly. George Ratiu, Chief Economist at Keeping Current Matters, explains:

“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . .”

New data from the Census further confirms this pattern – it shows the median sales price of newly built homes has dipped down in recent months (see graph below):

And as Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, says, the builders who are most responsive to this trend are forming pathways to homeownership:

 “. . . it is creating opportunities for people to be able to afford an entry-level home in an area. . . . if you get that size down, that automatically will make it a more affordable home. The [builders] that are decreasing [size] the most are probably the ones that try to build more of an affordable product.”

 How an Agent Can Help

 Builders producing smaller, less expensive newly built homes give you more affordable options at a time when that’s really needed. If you’re hoping to buy a home soon, partner with a local real estate agent to find out what’s available in your area. An agent can help you look at newly built homes or ones under construction nearby. 

Bottom Line

If you’re having a hard time finding a home you like in your budget, connect with a real estate professional. You need an agent who knows all about the latest inventory in your area, including homes still under construction or just built. That way you have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the homebuying process.

Get more info on Keeping Current Matters.

Related Links

• 4 Major No-Nos a Mortgage Lender Says to Avoid When Moving to a New State

• Yes, You Can Compete With All-Cash Buyers—Here’s How

• There's Only Half the Inventory of a Normal Housing Market Today

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Yes, You Can Compete With All-Cash Buyers—Here’s How

To some of us, all-cash buyers are the scourge of the superhot housing market: They swoop in, supervillain-like, and snatch up the most beloved and valuable properties from under our noses.

Or at least the ones you might have loved, had you not been stuck with that pesky mortgage contingency.

Competing with cash buyers isn’t impossible, just difficult.

Sure, some sellers will take the major moolah every single time and there’s nothing you can do about it. But if you go in with a strategy, you might just have a shot. Here’s how to create one.

1. Figure out the seller’s goals

Determining what’s most important to your seller can be key to getting your dream home—even when you’re competing against an all-cash buyer.

“People often think that all sellers want the most aggressive, quick close, for the highest price. That’s not always the case,” says Shashank Shekhar, founder and CEO of Arcus Lending in San Jose, CA. When he sold his home earlier this year, the most important factor was getting back two months’ free rent, because he was also trying to buy.

“Even if the price was slightly lower but came with that offer, we would have taken that over all-cash,” Shekhar says. “Understanding what the seller needs is always the most important thing.”

2. Consider your contingencies

If you’re willing to forgo a home inspection or secondary appraisal, you may have a leg up over buyers who won’t.

“If you’re going to compete with a cash buyer, the contingencies may be a concern for a seller,” says Joe Petrowsky, a mortgage broker in Manchester, CT. “If the prospective buyer is willing to eliminate the contingencies, that may be an incentive for a seller, especially if there are some issues with the property.”

This isn’t necessarily the best strategy. Without a home inspection, for instance, the property could have crippling issues that might have precluded you from purchasing, had you known. But if you’re dead-set on this exact house and you’re pitted head to head against a cash buyer, it might be an option to consider.

Of course, there’s one contingency you can’t remove: the mortgage. (Hey, if you could, you wouldn’t be reading this right now!)

3. Get pre-approved…

You can help soften your mortgage contingency by getting pre-approved—and offering a strong pre-qualification letter from your lender. If you’ve saved up a significant down payment and have excellent credit, this might be your winning strategy.

“The seller or their agent should understand there really isn’t a chance the loan will not go forward,” says Petrowsky. With great financials and a large down payment, your mortgage officer can go to bat for you with the sellers, promising nothing serious will happen in the delicate time between offer and closure to compromise their money.

“Make your offer as cashlike as possible,” Shekhar says. “The No. 1 reason transactions fall through is because the loan gets declined during escrow.”

4. … but make sure your mortgage broker is great

“I see pre-qualifications all the time that are not worth the paper they’re written on, because the broker doesn’t know—or hasn’t done—the due diligence on the prospective buyer,” Petrowsky says.

How can you make sure your broker is worth his salt? Both Petrowsky and Shekhar recommend researching online beforehand, keeping an eye out for any negative reviews indicating mortgages that fell through at the last minute.

You’re looking for someone who’s thorough: “We do a lot of due diligence to make damn sure that person is going to get a loan,” says Petrowsky.

After all, sellers often go with all-cash “because they don’t want to get in any hassles during the loan process,” says Shekhar. “Give them that comfort, that safety.”

Keep reading.

Related Links

• 4 Major No-Nos a Mortgage Lender Says to Avoid When Moving to a New State

• 5 Easy Modifications to Make Your Home More Accessible Before Selling It

• There's Only Half the Inventory of a Normal Housing Market Today

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Oklahoma Real Estate Statistics from July 2023

Listed below are the monthly system housing statistics for the month of July 2023 as compared to June 2023 and July 2022*. These statistics are supplied by MLSOK, Inc.

If you are wondering how current national and global situations might be impacting your property’s value, your neighborhood, or the Real Estate market in general, we are happy to provide more specific information.

Related Links

• June 2023 Stats

• May 2023 Stats

• April 2023 Stats

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

As Featured in West + Main Home Magazine: From Inspiration to Renovation

Katy McEntire W+M Agent

“Updating our bathroom had been a dream ever since we bought our house"!”

“We had prioritized other areas of our home first, and it had taken a while for us to finally embark on this project. We knew that it would require professional help, as it was beyond our DIY expertise. With careful planning, design inspiration from online platforms, and the assistance of skilled contractors, we were able to transform our bathroom into a space that exuded lightness, airiness, and timeless elegance!"

Katy's design process began with gathering inspiration from various sources. "We saved countless photos on Pinterest and Instagram, collecting ideas for color schemes, tile patterns, cabinetry, and lighting," she said. "Our vision was to create a bathroom that felt light and airy, while also being classic in design. One of the challenges we faced was the vaulted ceiling in the bathroom, which required careful consideration when determining where to start and stop the wall tile. Once we had figured out the tile and shower configuration, the rest of the design fell into place." With a clear design plan in mind, Katy hired professionals to bring the vision to life.”

"We opted to hire out all the work, including demo, tile installation, plumbing, electrical, and cabinetry," she explained.  "The labor costs added up, but we were willing to invest in skilled labor to ensure a high-quality result. Our budget included expenses such as new cabinetry, shower glass, countertops, plumbing fixtures, lighting, and more. We were meticulous in sourcing materials that aligned with our design vision, from the Riad White Ceramic wall tile to the Emser Sterlina White Porcelain floor tile and the Luce Lazula Quartz countertops."

Along the way, the team encountered unexpected challenges, such as a color variance issue with the mosaic penny tile in the shower. Despite checking the dye lot numbers before purchasing, they faced differences in dye colors once the tile was grouted. However, they were able to resolve the issue by submitting a claim with the supplier, Floor and Decor, and they covered the cost of labor and replacement tile. It was a valuable lesson to always double-check and communicate with suppliers to avoid surprises during the renovation process!

"In the end, our bathroom transformation was worth the investment of time, effort, and budget," said Katy. "It was a significant upgrade from what we had before, and the overall design and finishes created a space that felt fresh, inviting, and timeless. Looking back, we learned that thorough research, clear communication with contractors, and staying organized were essential for a successful renovation project. We are thrilled with the final result and proud to have turned our bathroom inspiration into a reality with the help of skilled professionals."

Related Links

• As Featured in West + Main Home Magazine: A DIY with a Modern Twist

• As Featured in West + Main Home Magazine: Paving the Way for Outdoor Bliss

• As Featured in West + Main Home Magazine: From Dream to Reality

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Just Listed: Coastal Charm Meets Modern Comfort!

Well maintained, one owner home in the coveted Deer Creek school district.

Darling curb appeal with a coastal vibe, wood look tile + serene color palette throughout. Kitchen features granite counters, large island, stainless steel appliances, subway backsplash with decorative inlay. Dining area off kitchen, both overlooking the beautiful living room. Perfect for entertaining! Living room features built-in accent shelving and lovely gas fireplace. Spacious primary suite + spa like ensuite featuring a dual sink vanity, soaker tub, walk-in shower + spacious closet. True split plan w/ three additional bedrooms off the entry. One of which would make the perfect home office. Spacious backyard w/ sprinkler system, and generous back patio. Council Ridge is just a few miles north of Kilpatrick Turnpike and Lake Hefner Parkway and offers a pool, stocked pond, basketball court + so much more. Welcome home!

Listed by Jessica Snook for West + Main Homes. Please contact Jessica for current pricing + availability.

 

Have questions?
West + Main Homes
(405) 652-6635
hello@westandmain.com

Presented by:
Jessica Snook
405-826-0010
jessica@westandmainok.com

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