1. Inventory Levels will be shrinking—leading to increased BUILDER confidenceThe main reason for all of the great housing deals in Atlanta right now is that the number of homes for sale exceeds the number of homes being purchased by a sizeable margin. There is currently about four months of “oversupply”.
The good news for producers of new homes, builders, is that the amount of oversupply is decreasing daily. New building permits are at a standstill, but homes continue to close in fairly large numbers. Every day that the number of closings exceeds the number of new starts, the market absorbs some of the supply.
When February arrives there will still be too much inventory; however, the levels will be decreasing significantly, and builders will be gaining confidence once again. As their confidence returns, they will stop offering the huge incentives that are currently available in the marketplace.
No more $10,000 off. No more free home theatre. No more cash back.
2. New homes always sell better in the spring—leading to increased BUILDER
confidence
You want to buy when others are not—that’s when you get the best deal.
Just like a new car dealer offers better deals during their slow sales months but ditches the incentives when sales pick up, builders will do the same. They will continue to offer incentives throughout the winter not only because the market is down but also just because it’s winter. They always offer incentives in the winter—even in a hot market.
Inventory levels will continue to decrease throughout the winter, and then when builders see an increase in home shoppers in March, as temperatures begin to rise, they will have renewed confidence that the market has rebounded.
Once again, that confidence will lead builders to discontinue the sizeable incentives to purchase.
No more free granite countertops. No more free gift cards. No more free closing costs.
3. The secret will be out—leading to increased BUYER confidence
Just like everyone is currently talking about how bad the housing market is, by March they will begin to talk about “how much better” it is beginning to look. As the media and the buying public begin to echo that sentiment, people who have been sitting on the sidelines, “waiting to see what’s going to happen”, will come out of the woodwork. Consumers will once again feel that they have “permission” to begin looking for that new home deal.
The only problem with waiting for that deal is that by the time “the secret” gets out, the deals will have already begun to disappear. There will still be some, of course; but they will not be as plenteous, or any better, than they are right now.
No more free Homeowner dues. No more free hot tub. No more free basement.
What we have right now is the proverbial ground floor. The deals ain’t getting any sweeter, and after February they will have begun to disappear altogether.
Confidence is the key. Beginning in March, builder confidence and buyer confidence will prove that from now until February may be the absolute best time that you may see in the next decade to write a contract on that new home you’ve been dreaming of!
The Knight Group has opened Phase Two of Pine Grove in Stockbridge Georgia. Pine Grove features large homes on large homesites. Amenities included a swimming pool, tennis courts, and nature trails.