Quote:
Originally Posted by rsmurano
You missed a class, supply is only part of it, the other important part of economics is demand. The developer can’t force somebody to leave another state and buy here. The developer here has created an environment that people from all over the country want to get into which is causing high demand for housing and right now, the developer is building all these new homes to meet this demand.
If there was no demand but a large supply, you would see home prices going down.
|
The point I was trying to make was that demand was up throughout the country, not just here in northeast Sumter County.
In a normal year, the value of my home increases due to the demand for homes in this area which is, of course, primarily due to what the Villages is.... people want to live here. But, the increase is also due to a limited supply in the area - there are only so many houses to buy. The Developer building as fast as he can works against this pressure on home prices. If he was able to turn out 1,000 homes per month the market would be saturated and prices would stagnate or fall. His continued building does not increase the value in my home.
So yes, value increases as demand increases and the Villages is always in demand. But, price decreases as supply increases and the Developer increasing supply as quickly as possible slows the price increase. This year, with such an overwhelming demand, the effect of increased inventory is negligible. That may not continue to be the case in the future and one day the value of pre-owned homes may suffer due to a large inventory of new homes.