New Home Builders In Tucson Are Having A Very Hard Time Moving Homes Look For Incentives To Go Up And Prices To Be Slashed

From what I have seen and heard from the new home builder contacts I talk with in Tucson ALL of the builders are having a very difficult time moving product (homes) as the first time buyer tax credit has now fully expired and demand was pulled forward by a ways as well. Across the city builders are struggling to move properties. A majority of the builders “ramped up” to meet the expected demand for finished spec homes for buyers wanting to make the $8k tax credit deadline, most of those buyers never showed, or those that did purchased foreclosure homes instead of builder specs. This left builders sitting on a lot of finished or about to be finished spec homes with no buyers. These homes are now done and still sitting in most situations as bank foreclosures are cheap relative to new homes thus eating into the demand present for new homes.

So what is going to happen with these homes and builders?

I believe you are going to see prices dropped again somewhat similar to what we saw in the market from late 2008 early 2009 as builders re-organized their businesses to be able to drop costs. Builder spec homes that are finished should be able to be picked up for a very reasonable price with massive incentives. Lennar right now is offering a 3.25% FIXED 30 year mortgage to buy one of their homes on top of other incentives. Other builders are reducing prices and increasing incentives drastically to make sales happen. So if you are a buyer able and willing to buy in today’s market you are in a pretty good place as the builders will do a whole lot to earn your business.

If you want to see all of the spec homes available for sale in Tucson use this link- New Homes For Sale In Tucson

Best builders willing to work a deal?

Lennar Homes- with their 3.25% 30 year mortgage would be a good start as the costs of borrowing most people don’t realize can run 10’s and 10’s of thousands more just by having a 1%-2% higher fixed rate.

Meritage Homes- Meritage is always willing to deal on their homes if you know what to ask for and how to negotiate with them. If you are looking for a pure “best deal” and their is a Meritage Homes neighborhood near where you want to live with a floor plan and product you like I would highly suggest looking into Meritage.

Richmond American Homes- Richmond over the past 6 months has slashed prices and boosted incentives on top of that I have had a lot of success negotiating additional incentives on top of what the builder was willing to do. Richmond American has several top notch neighborhoods to choose from and I think for buyers looking the the above $200k price point Richmond American will yield you the best overall value in new housing in the Tucson region. (Assuming you negotiate for the additional incentives I know exist in the market right now but maybe not be “advertised” by the builder)

If you are interesting in learning more about the best deals in the Tucson new home segment of the housing market feel free to email/ call and I will discuss it with you.

A New Home In Tangerine Crossing By Richmond American Homes

Northwest Tucson is always in a continual growth state and has been the location for hundreds of new home neighborhoods/ developments for the past 50 years.

However where are new homes being built on Tucson’s northwest (NW) side currently?

Right now on the NW side of Tucson including the areas of Tucson, Marana, Oro Valley and Catalina, there are 19 new home developments/ neighborhoods selling homes ranging in all price ranges and sizes/ amenities. In addition to those 19 developments there are dozens of individual finished spec homes by custom builders throughout the northwest (NW) with those homes generally being in the $500k and up price range.

What are some of the best new home neighborhoods being built currently on the Northwest (NW) side of Tucson?

-Red Rock Village by Pulte Homes, Red Rock within the city of Red Rock on the extreme northwest is a value priced new home neighborhood offering homes of basically all sizes and prices. For buyers that are unconcerned with a 40 minute commute to downtown Tucson, Red Rock offers extreme value especially for their larger 3000sf+ homes. I have personally sold some of the larger homes to clients that were able to buy them for an unbelievable sub $60/sf-$70sf! Those prices are amlomst impossible to beat dollar per square foot for the northwest side of Tucson.

- Tangerine Crossing by Richmond American Homes is another great northwest Tucson neighborhood for buyers wanting new housing in an upper end area. Tangerine Crossing sits just off of Tangerine rd and Thornydale in an up and coming high end housing district. Within a few miles there is a Ritz-Carlton, (with its own $1.5+ million dollar new housing neighborhood) Dove Mountain, and hundreds of $500k priced homes in the immediate area many sit at in excess of the $1 million price point. Tangerine Crossing offers a premium parcel of land with pristine desert surroundings at a reasonable price. Homes range in size from 1,750 square feet up to 4,100 allowing all buyers to be able to find a home that fits their needs and wants. Prices for the new home neighborhood start in the low $230k’s

-Sky Ranch by Meritage Homes offers one of the best values in all of Tucson. The secret is behind the value Meritage Homes got when it bought the land for an extremely cheap price allowing then to relate low new home prices in a upper end neighborhood. Pathway Developments originally started developed Sky Ranch and it was home to dozens of $500k plus homes all with high end features and finishes. Pathway then went out of business and Meritage purchased the remaining lots within Sky Ranch. Instead of trying to put the same product (homes) within the neighborhood Meritage scaled down the homes and hit a sub $200k price point for their smallest 1647sf plan. That is a low, low price even in todays market for this neighborhood and area. I have recently see some of the old (3 years old) Pathway homes that resold as foreclosures selling for high $200k’s (as foreclosures) for about 2000sf. To be able to get 1,647sf brand new for under $200k is an amazing opportunity.

These are just some of the new home neighborhoods currently open for sales within Tucson. If you would like help figuring out which builder, neighborhood, and home may work best for your housing needs feel free to contact me via email, or call direct I have over 8 years and 200 new home sales worth of experience to help you distinguish between all the different new home options in today’s market.

In a step to distance itself from competitors local Tucson home builder TJ Bednar has decided to install solar panels on all of its homes in two different neighborhoods. Homes in both of TJ Bednar’s new home neighborhoods of Vista Montana Estates and Lakeside Ridge will include solar systems that TJ Bednar says will provide all of the energy needed for the home and even be able to produce excess which would then be sold back to TEP.

Prices for these home range at Vista Montana Estates homes start with a 834sf home at $129,900 up to the largest at 1,852sf for $179,900. At Lakeside Ridge off of Stella Road and South Pantano homes start in the $150k’s

Obviously installing solar panels has benefits and costs associated with it yet with TEP’s incentive of paying $3,500 per kilowatt for each solar panel installed the costs are not as high as many would assume. For example a typical home built needs a 5.8- kilowatt panel solar system to run the home. With TEP’s current incentive of $3,500 per kilowatt incentive this equates to just over $20,000 for the solar panel system.

It’s worth noting the $3,500 per kilowatt incentive is for whats labeled as a “TEP Guaranteed Home” which is where TEP has energy efficiency standards for the home to meet to qualify for it. If a home doesn’t meet the TEP Guaranteed Home requirements then the incentive for installing solar panels on a home drops to $3,000 per kilowatt. Still with the average solar panel system running $20,000-$40,000 over the long run it should be much cheaper to operate a home with a self providing solar panel system then not once the incentives are calculated.

One other word worth mentioning is obviously having a solar panel electrical system will make your home much more valuable as it essentially will not have to incur the costs of electricity. For a normal home that has a $150/month electric bill that’s a savings of $1,800/yr. After figuring in the TEP incentives and the additional cost of a system a solar panel system could run an additional $5,000-$20,000 out of pocket. With that being said there are what’s called “Green Loans” that you can use for refinances or purchases to allow you to get the money for these home improvements both with attractive rates, and processes to help you make these upgrades. In my mind a solar panel electric system should easily improve your homes value at least the minimum of what it costs out of pocket after the TEP tax credit. As electric prices increase over the following decades those savings could become significant as well as the feature becoming more valuable to future home buyers.

-If you would additional information on energy efficient homes in the Tucson area for sale or to learn more about “green loans” to make energy efficiency improvements to your current home feel free to email using the form on the right of this page or call directly.

Buyers have many of new home options available to them within Rancho Sahuarita in Sahuarita Arizona. Over the past 2 years most of all of the new homes in Rancho Sahuarita have been re-tooled by there respective builders to allow them to build more home for the money. Richmond American, KB Home, and DR Horton rolled out brand new floor plans to compete in the ultr affordable segment of the Rancho Sahuarita market.

Right now in Rancho Sahuarita new homes can be purchased for under $80/sf. Richmond American currently has the best new home deals with many spec homes under $80/ft! To put this into what you get for the money in Rancho Sahuarita right now Richmond American has a spec home to be complete in April that is over 2500sf 4 bed, 2.5 bath, loft, with a large backyard for a finished price of $202,000! That price is BEFORE incentives that currently include Richmond American paying for a buyers closing costs and obtaining options money to have the home upgraded at no cost to the buyer. Other incentives are also available if you are interested in this home or others in Rancho Sahuarita call or email using the side form on the right.

What other options are available for home buyers in Rancho Sahaurita?

Other builders are building homes at prices while not as low as Richmond’s homes they are still relatively great deals especially if a buyer and/or their Realtor knows how to negotiate with the builder to get additional incentives and money off. DR Horton with their “The Presidios” neighborhood offers homes up to 2500+sf for under $200k. For buyers needing a new home under $150k in Rancho Sahuarita I would suggest KB Home’s Presidio Del Cielo as a good option. All of KB’s floor plans offer single story with minimal included features so buyers can get the most home for the money. Several other builders also offer new housing neighborhoods including Maracay’s gated neighborhoods Entrada, and Pulte Homes is still building out its final phases of Tubac.

I get a lot of buyers on the fence about what is the better buy a foreclosure home or a brand new one. Sometimes a

Should You Buy A New Home Or A Foreclosure For The Best Overall Deal?

client just wants to look at foreclosure homes motivated by the “deal”. Other times a client only wants to look at new homes where everything is under warranty and they will have no issues with anything. Either strategy could be a great idea but I would recommend as a buyer you look at both types of home listings sometimes the differences are much more minor then you would think.

Currently many Tucson AZ new homes are as low priced or LOWER then foreclosures in the same neighborhood. I wrote a post a couple weeks ago about a new home (spec home) a client of mine purchased in Rancho Sahuarita for basically the mid $180’s after all incentives etc were figured in. The same size foreclosures (bank Owned Homes) in Rancho Sahaurita would run a buyer about $220k so the buyer only looking for the “deal” would have spent $40k more! In that exact situation the builders spec home wasn’t on MLS so if you as a buyer or your Realtor didn’t do some leg work and look into these options the foreclosure buyer would have absolutely no idea that home was for sale.

On the opposite side of the coin I know many times the new home buyer who only wants a new home spends tens of thousands of dollars for that new home when in the same neighborhoods and sometimes the same street there is a virtually brand new looking foreclosure on the market for $20k-$40k less in some situations. Many buyers are worried they are going to get into to many “projects” with a foreclosure home and this simply is not the case in all foreclosure homes. The vast majority of foreclosures do need a lot of rehab and repair. However the difference is right now the foreclosure rate is extremely high and many of the foreclosures were newer homes that have only been lived in for 2-3 years.

Now with all that being said I think this question is best answered by the area in which you are looking to buy a home in. Right now in the Catalina Foothills foreclosures are without a doubt the best buy and you will save you more money then a new home because new homes in the district still carry a high premium. Other areas such as the Northwest is split; within the interior NW the area basically north of River, east of First to about I-10 and Cortaro Northwest (NW) Tucson foreclosures are about the only way to go. But once you get out to Gladden Farms and Red Rock the new home builders are competitive and may get the edge. In the Southwest foreclosures should be the better deal but the builders are within the market also maybe a finished builder spec home could net out to a better price. In Sahuarita I think the builders are better then the Sahuarita Foreclosure homes I see on a daily basis. If you have questions as to what maybe the best options for your individual needs call or use the box on the right to write your comment/ question and I’ll be more then happy to help you out.

One Of The Floorplans Meritage Is Now Building In Sky Ranch

Meritage Homes is now pre-selling their new homes at Sky Ranch just off Thornydale and south of Tangerine. These homes start in the high $180’s with a 1652sf home. From there the homes range in size all the way up to a 3118sf 2 story floor plan named the Cathedral Rock. Between these two smallest and largest homes in the neighborhood Meritage builds six other plans. Plans range in both 1 and 2 story options as well as 3 to 5 bedrooms with additional options for more beds and baths combos as well as 3 car garages and other upgrades.

Sky Ranch was originally scheduled for some mid luxury $400k-$750k homes to be built by Pathway Developments during the real estate frenzy. Since that time many homes had been completed in the mid price range but the market has not been very strong for this product. This leads to Tucson (and national) builder Meritage to basically buy out the existing lots and build a higher value proposition for buyers in today’s market.

Meritage’s Sky Ranch should be a solid selling neighborhood as this area attracts buyers looking for the location (just south of Dove Mountain) and new homes under $400k. Since Sky Ranch did have an initial “higher end” nameplate hopefully buyers will respond to these homes better as they can now purchase a brand new Sky Ranch Home(s) for under $200k. Before Meritage started pre-selling their new homes under $200k for Sky Ranch just wasn’t an option. The Thornydale corridor is a transitioning area what once was once the outskirts with horse property everywhere is now turning into a mid to upper end new developing section of Tucson and Marana. The growth and desire for people to want to live near Dove Mountain along with the access to I-10, Oro Valley and the Foothills along with the natural beauty the areas provides makes it idea for new home development. While Dove Mountain still offers new housing other builders such as Richmond American Homes with their Tangerine Terrace and the addition of Sky Ranch by Meritage make for two large new home developments to cater to the mid market of Tucson.

My thoughts are that in 10-15 years the Tangerine and Thornydale intersection should look like an upscale and busy intersection a lot like you see in the newer upper end neighborhoods of Phoenix. The demand for upper end housing is there as buyer profiles that are buying in the area are above average for the Tucson Valley with Dove Mountain bringing in many multi-million dollar home buyers along with several other high end housing developments in close proximity. As the area grows look for it to continue to push the boundaries for responsible and higher end residential developments and neighborhoods.

New home builder sentiment headed down to a 15 rating in January from a 16 rating in December as home building executives outlook on the future of their business has lowered over the past thirty days.A rating of less then 50 suggests the new home industry is in a contraction or (recession. )Executives blame a couple things on this reduced outlook.

“Home buying conditions have rarely been as good as they are right now, but consumers are still waiting to see significant positive signs of improvement in employment and confidence, and this is slowing buyers’ return to the market,” said NAHB Chief Economist David Crowe in a statement.

“Meanwhile, competition from foreclosed homes is also severely impacting new-home sales. That said, expected improvement in the job market this spring will help propel the housing recovery as we head into the prime home buying season,” Crowe said.

Tucson New Home Builders are facing the same fate as in many other areas of the country. Foreclosure homes (many times in the same neighborhoods and areas the builder is building in.) offer ultra cheap pricing that makes for a formidable competition against new product. High un-employment in Tucson (while not as high as the national average) is keeping many home buyers out of the market especially those in the mid price range ($250k-$500k).

I do think the new home industry in Tucson is in much better shape and the builders are responsibly managing their businesses for this current Tucson housing marketplace. Builders are staying away from allowing too many spec homes to sneak up on them by requiring higher earnest money deposits and doing a better job pre-qualifying buyers before starting home construction.

Another huge factor that is keeping the new home industry alive currently is almost all of the builders made a wise business decision to re-engineer their businesses from top to bottom to cut costs and allow them to make a profit selling homes for much lower prices then in the past 5 years. Every large builder I know of went back and came out with brand new floor plans that were cheaper to build. These cost saving plans allowed their new home product to rival Tucson foreclosures. Richmond American, KB Home, DR Horton, Pulte Home and Meritage have all offered new housing lines to compete in this new marketplace.

This has resulted in new homes in many situations being just raw “better deals” then any other seller can offer. Just a little over a week ago I helped a client negotiate on a brand new home in Rancho Sahuarita here are the quick details;

-Over 2500sf

-4 bed, 2.5 bath, with a gameroom

-2 Car Garage

-Large Backyard

-On a Cul-De-Sac

-High Ceilings, very nice floor plan, quite a few options included standard

What should something like this be priced for as a brand new home in the very popular Rancho Sahuarita. In my professional opinion the builder should have been priced at roughly $225,000 and accepted any offer over $220,000. Many Foreclosure homes are currently starting in the low $200k’s for this size and style home but those need work. A nice foreclosure home would run you about $225k in Rancho Sahuarita for over 2500sf.

What sorta deal did my client get?

Well they paid -$189k and are getting the following:

-Special financing rate on a 30 yr fixed mortgage (I think its a 4.5% 30 year fixed)

- $10,800 in options money to be used at the builder design studio for upgrades

- Roughly $5,250 in closing costs

-And the home will be move in ready within the next 45 days!

So when you net this sale out basically the builder is selling the home for about $170,000 and we are talking a 2500sf+ new home in Rancho Sahuarita. Nothing in the resale, foreclosure, or even new home market competed with that deal. I checked everything available and physically went to every builder in Rancho Sahuarita to price check this home and nothing came close!

The best news?

That builder has other deals like this and they are not advertised on MLS currently. So this shows at what lengths builders are willing to go to move homes today.

National homebuilder Lennar posted their first quarterly profit in over 2 years as the signs real estate markets nationwide are getting much better then a lot of even experts realize. Lennar is the nations 3rd largest builder, having operations across the country and also having major exposure in some of the worst hit areas by the real estate downturn. Lennar earned $35.6 million, or 19 cents a share, for the quarter ended Nov. 30, compared to a loss of $811 million, or $5.12 a share, in the same period a year earlier. It marked Lennar’s first quarterly profit in two years. For a homebuilder to have a profit is quite unexpected by most as the new home industry has been dealing with the worst real estate depression since the Great Depression.

I think this speaks volumes for the real estate industry as the market is getting better. In my experience homes are selling faster and the buyers are asking less of sellers then was typical 2 years ago when it seemed every buyer and seller was a world apart in terms of what each wanted. Lennar generally builds in the lower price range which unsurprising is the best selling segment of the market as the first time home buyer tax credit has pushed additional demand into the market.

Lennar build what’s called “EI” homes. The “EI” stands for Everything Included and their home building niche and marketing stance i thats by buying a Lennar you will get a plush comfortable home with many luxury options included for a lower price then anyone else can provide a similar home for. For the most part this is very true and many buyers that were looking to upgrade their new homes do choose Lennar homes for the good value they represent. I think Lennar will continue to do go well as the market further recovers. I also expect the other large national builders such as Richmond American Homes (MCD), KB Home, DR, Horton, and Pulte Homes to also benefit in the fact the new home industry is much better then it has been in years. All of these builders have re-engineered their homes to maximize profit and cut waste so going forward all of these builders profits should be much higher then they otherwise would be due to the “survival”  mentality they have all had to take to get through this current real estate cycle.

New home sales increased last month to a level not seen in over a year as demand in the southern portion of the US increased dramatically. The commerce department stated the new home sales rates increased 6.2% to a seasonally adjusted annual rate of 430,000 homes from an upwardly revised 405,000 pace in September. On a note for those that don’t follow these reports as close as I do a seasonally adjusted annual rate of anything less than 500,000 new homes per year is considered anemic. During the real estate boom new home sale levels reached at high as over 2,000,000 homes per year.  To be at a rate of 430,000 homes shows the high rate of overhang in the existing markets as foreclosures and distress sales pull buyers their direction and away from new homes due to the value most of these homes can be purchased for.

In Tucson, the new home builders have in my mind successfully scaled back their businesses to deal with the lag in demand. Many homebuilders in Tucson are still losing money just to stay in business and/or just breaking even. After the past three years of continued decline in new home prices and sales all of the builders that were financially unstable are out of business never to return. Even some of the largest builders in America felt the need to merge to save costs to allow them to try to make a profit in the hardest new home building conditions in at least over 75 years!

In the rest of the new home sales report that came out today it highlights the stats of the new housing industry they are as follows:

-There were 239,000 new homes for sale at the end of October, down 4.4 percent from September and the lowest inventory level in nearly four decades.

-At the current sales pace, that represents 6.7 months of supply, down from last winter’s peak of more than a year.

-Separately, rates on 30-year mortgages dropped in the past week to match a record low set in April, while the 15-year home loan rate fell to a new all-time low, home funding company Freddie Mac said on Wednesday.

-Despite the lack of certainty about the tax credit that buyers faced in October, sales were up 5.1 percent from a year ago, the first yearly increase since November 2005.

-The surge in sales was driven entirely by a 23 percent increase in the South. Sales fell about 5 percent in the West and Northeast, and fell 20 percent in the Midwest.

-The median sales price of $212,200 was almost even with $213,200 a year earlier, but up almost 1 percent from September’s level of $270,000.

Share on Facebook As the national real estate markets improve the homebuilders will logically start to do better as well and should return to profitability. But for homebuyers interested in buying a brand new home specifically in Tucson what builder will get you the most for the money? In my mind this question is a little dependent upon price range. For buyers’ mainly first time buyers and those looking for under $150,000 in Tucson I think KB Home should give you the most for the money. Now KB has a lot of critics and the other builders always knock KB and say “At KB Home EVERYTHING is an option and you are going to blow your budget just to get a “basic” house with KB”. Now this statement is true in theory at KB you basically buy a very basic home and then add on everything that is important to you as the buyer, at that point you have a custom ordered home. The most important part of this is at KB you are not paying for options you don’t want, will never use, or could care less about. Generally speaking with a KB Home you will spend an additional 5%-10% of the base price on optional features. That may seem like a lot but most KB Home communities are at least 10% less expensive than other builders in the same areas so as a buyer you should be further ahead.

So what if you are looking for a new home in Tucson in a higher price range who should you go with to get the maximum value?

This question is a very personal preference once you get over the $300,000-$400,000 price point in Tucson all the new homes in theory are nice. Most will be in demanded locations, offer a long list of included features and generally speaking the packages being offered by the builders in this price range are very appealing. In my mind the builder that will give you the best overall neighborhood, home, and package especially in years down the road as the neighborhood matures is A.F. Sterling. A.F. Sterling is a premium homebuilder in Tucson. I personally live in a A.F. Sterling home in the Catalina Foothills and even though the neighborhood was built in the early 90’s its still in premium condition due to the attention to detail A.F. Sterling places on its neighborhoods and homes within them. Other premium builders in Tucson such as Pepper Viner, Pulte Homes, and Sombra build a great home but even that being said I can almost always tell when I am in an A.F. Sterling built neighborhood. The reason for this is the neighborhoods are just honestly nicer, the neighborhood recreation areas generally offer their own pool areas, the landscaping packages seem to be better than other builders, and the designs of the homes (both exterior and interior) are very appealing. I am going to be doing a study to see if “on average” homes that reside in A.F. Sterling built neighborhoods sell for more than other homes in the same areas. I’m not sure that this is absolutely true but I have a gut feeling it is.

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