Builder price reductions
I noticed an interesting question posed to Nationally syndicated columnist Lew Sichelman about whether there is any recourse if the builder in your neighborhood slashes prices to attract new buyers and you purchased previously at an obviously higher price.
In the Charleston real estate market as well as most of the country, builder's inventories of completed but unsold houses and condominiums are too high and many are doing whatever it takes to sell. In most cases, they are offering significant incentives including paying buyer's closing costs, free upgrades and even mortgage interest buydowns but some builders have been forced to slash prices as their only means of clearing unsold inventory. If you purchased in the past year, it is likely that the new homes in your neighbborhood being sold will sell for less than you paid.
It certainly cannot be a good feeling to think your house might be worth less today than yesterday since we all would like to believe that real estate always goes up. If you plan to be in your house for a while, it is most likely that the value of your home will increase over time, just not in the short term as the housing market stabilizes from the frenzied past few years.
One more point, real estate is always local, and while builders in the Charleston area have more unsold inventory than they might like, it is not as big a problem here as it is in some of the housing hot spots like Florida, Phoenix and Las Vegas. Pricing in the Charleston market has been very stable with prices increasing slightly despite the high inventory in both new construction and preowned homes.
If you have been thinking about buying, with mortgage rates declining and with motivated sellers of new construction and preowned homes, this could be an excellent time to buy.
The short answer regarding recourse. No. For a more detailed explanation, please read the complete article, courtesy of Marketwatch.