1650 E. River Road
Where Are All the New Home Communities?
I think it’s obvious in the current real estate downturn that fewer builders around the country are willing to open new communities. There is too much uncertainty regarding sales prices the market will support. Builders don’t know if they will be able to make any money at all. Here in Tucson, very few new home subdivisions are being opened. Most builders are sitting on their land holdings, and others are trying to sell off their holdings to raise cash. However, Meritage Homes is opening (or has just recently opened) two new communities in Madera Highlands in Sahuarita. Far north of Tucson, Pulte is still committed to their extremely large master-planned community, Red Rock. They are not abandoning the “build it and they will come” philosophy. Red Rock was not much of a town, but since Pulte has been building there, the town’s population has increased overnight. Although I know that currently Pulte has to give homes away to sell them, they are still moving them at a regular pace. Other than these two areas of Sahuarita and Red Rock, few brand new subdivisions are popping up at all.
If you read this blog, you know I personally think the Tucson market has bottomed. I see less inventory coming on the market and many homes are selling that would not have sold at all six months ago. My guess is that once the builders believe the market has completely and noticeably bottomed, they will be willing to reopen plans for communities they have sidelined. It will still take years from that point to prepare a neighborhood for building.
Buyers currently can persuade builders to offer much more in incentives than almost ever before, and I think this will continue until sales increase. There are a few rare exceptions, however. Sycamore Canyon homes, for example, seem to be selling much better than one would expect. I have actually seen proof that their prices are holding steady and have even increased over the past year.
If you think a new construction home is the way for your family to go, I highly recommend purchasing now. Once the builders completely run through all the neighborhoods they started during the boom, they will not be setting themselves up for future failure. They will not continue to offer some of the amazing deals I am currently seeing in the new home industry here in Tucson, Arizona.