New Home Gouging?
 

A friend of mine closed on his home just six months ago in TV. He "swears" that prices on an exact Designer home like his has gone up in price 30% in the last six months. He says, "The Developer is gouging people".

$250,000 Designer home with a 30% increase would now cost $325,000. My friend is convinced this is true and I have no reason not to believe him as He is not one to make "things" up. I have no valid data to back him up.

Assuming this is correct, is the Developer gouging people on new homes? :shrug:

Not true. Homes have gone up around 10% over the past year. Varies a bit by model, but only a % or so. However lets assume market demand caused the 30% increase. Real Estate has always been market driven so not sure why any % increase would be gouging?

Ask your friend to sell you his home at 80% of market value and see how quick he changes his thinking. He will sell it at the market no more, no less, and if you accuse him of gouging, do you think he will agree?

Supply and demand ,Hope the real estate taxes don't follow

Here's another thing. Property prices have increased which is a big part of the price jump. The basic house alone has seen about a 10% increase. They're also selling like hot cakes. I was out yesterday in the new section off Hillsbourough and the contract were working like crazy to keep up with the load.

Are not the new home prices only quoted on specific lots? All lots are not equally valued, thus an identical structure could have a different price.

True, you have to assume lots have gone up too. I know his is an interior lot---I believe an extra 10 foot in the back because of a birdcage addition.

Regarding "He says, "The Developer is gouging people".......

The developer is probably blamed for the sun setting earlier this time of year, too.

The fact is, no home buyer buys a new home here and writes a check for it with a gun to their head. Any day of the week, a buyer can buy a slightly used almost-new home from an owner or MLS real estate broker/agency, and they'll have a "new" home that has all the enhancements already done and they'll be in a neighborhood that is established and close to one of the town squares.

If new home buyers are paying "too much" and "getting gouged", it's their own fault......or maybe, knowing how prices are a lot higher on either coast, these new home prices seem like a bargain compared to what they're used to seeing in NY or CA, MA, etc. Often, a $300,000 designer home here would cost two or three times that amount in another state, and it would be stick-built and not concrete..

all I know is that I could have bought a new 2-2 courtyard villa (least expensive model) in May for $165000. Now same type model, same type lot, is $183000.

We have been here just short of 10 years. When we bought our lot, we had to pay an extra $1000 to get a lot facing west so that our lanai would be on the east. The week after we put down on our lot, the prices went up $8000.

Just as someone else noted, it is market driven and also depends on supply and demand. Houses here cost much more for basically the same house than in Amarillo. Lots of things factor into home prices.

Price gouging refers to suddenly raising prices ridiculously high (i.e. water, gas, etc.) when a disaster such as a hurricane, earthquake, flooding, tornado, etc. occurs. Water and gas for instance are considered necessities rather than choices to have or not have.

You should have bought it in May ! !

I wonder, too, if lumber prices here are much of a factor in pricing. Since our homes are largely block, with some metal studs mixed in throughout the house, maybe the inflation in lumber is discounted a bit. I remember last fall that lumber took a 40% jump.

So true. Every square inch of the lot increases value. A lot that is only a few feet wider or deeper can cost considerably more.

I am glad my friend bought his patio villa when he did. The prices on new AND used really went up in recent months because everyone wanted them.


Poor developer. Everyone picks on him.

does anyone really believe that the developer has any NEED to gouge any buyer?

Why are people so critical of the Developer? :ohdear: Real Estate has always been market driven and price increases are not gouging! Every builder in America sells inventory at market price, which is what purchasers are willing to pay.

Gouging implies taking unfair advantage of someone. There are many other retirement communities around that offer lower prices! There is no gun to anyone's head.