Ron Moore The Home Team Pros

OK, I know I'm going to get hammered just because of the title of this post. I know that there are many arguments why every Realtor should sell new construction and you're free to present that side. Just hear me out and then pound away!

First, many Realtors don't know anything about how to build a home. Though that's not necessary to sell one, it is important if you're going to provide professional help to a buyer -- before and after the sale. Any agent wanting to be a professional should become certified as a new home specialist (CNHS). It's not hard and isn't very expensive. My advice to new home buyers is that they don't use a Realtor who isn't certified.

Secondly, many Realtors don't seemingly know the difference between a spec home and a custom home when it comes to pricing. They believe that a builder should be held to the same standards for both (I'm not talking about structural issues but finish and cosmetic issues). Not knowing that there is anywhere from a $10 to $50 premium for custom homes creates impossible expectations in the minds of buyers.

Thirdly, most agents don't know the standards set by their state for residential builders. Most states have printed books that are free for the asking. Few agents have ever read one much less have a couple copies in their office.

Fourthly, associated with the 3rd point, most agents don't have a clue as to what a builder's responsibilities are after the sale of a home and, therefore, don't know how to help their clients when problems arise. For example, I had a client call me who bought a new home about 30 months ago. The AC didn't work. She wanted to know if the builder was in any way responsible for fixing the problem. Unfortunately, many agents wouldn't know or would just assume that there was little responsibility if any.

None of these are insurmountable problems to overcome. A little time and training is all it would take. So if you want to be a professional new home sales agent, take the time and get the training! And if you're a buyer considering purchasing a new construction, use a certified new home specialist (CNHS). I just happen to know a good one!

For folks who are waiting for the bottom in the real estate market, please consider . . .

1. Local inventory of homes for sale is beginning to shrink somewhat.

2. Overall home prices in South Carolina haven't seen any significant decrease.

3. Thirty-year mortgage rates have risen from under 6% to over 6.5% in just a couple weeks.

4. Many building material prices, which were at a several year low, are now beginning to see significant rises again.

5. Inflation worries may cause the Federal Reserve to raise their rates.

All this just goes to show that you can't time the bottom of a market. You can only see the bottom when the market is well on it's way back up. So, if you are thinking about buying or selling, now is the time!

New Home Market Report

Florence, South Carolina

YTD Statistics as of May 31, 2008

Prepared by Ron Moore

Founder of the Home Team Pros

RE/MAX Professionals

1000 to 1250 square feet

1. Inventory – There are currently 14 homes available, representing a 5.5 month inventory.

2. Days on Market – 243 DOM, a huge increase over the average 111.

3. Pricing – $91 per square foot, down from a three-year average of $92.

4. Sales – 7 sales YTD, which is 44.6% behind where sales should be.

5. Observation - Though declining inventory is positive, the DOM, flat pricing and highly sluggish sale's rate are all negative indicators.

1251 to 1500 square feet

1. Inventory – There are currently 68 homes available, representing a13.4 month inventory.

2. Days on Market – 156 DOM, a significant increase over the average 108.

3. Pricing – $99 per square foot, up from a three-year average of $96.

4. Sales – 20 sales YTD, which is 21.3% behind where sales should be.

5. Observation - The fact that current inventory is high, that the average DOM are significantly up and that sales are sluggish indicate an extended slowdown for this size home.

1501 to 1750 square feet

1. Inventory – There are currently 28 homes available, representing a 9.3 month inventory.

2. Days on Market – 120 DOM, a significant increase over the average 82.

3. Pricing – $107 per square foot, up from a three-year average of $101.

4. Sales – 7 sales YTD, which is 53.3% behind where sales should be.

5. Observation - Though increased pricing power is a positive, all other indicators are lagging and point toward continued pressures on this market.

1751 to 2000 square feet

1. Inventory – There are currently 21 homes available, representing a 6.9 month inventory.

2. Days on Market – 101 DOM, a moderate increase over the average 91.

3. Pricing – $108 per square foot, up from the three-year average of $100.

4. Sales – 14 sales YTD, which is only 8.4% behind where sales should be.

5. Observation - The declining inventory and increased pricing power are positive indicators. The DOM and YTD sales rate are neutral to slightly negative.

2001 to 2500 square feet

1. Inventory – There are currently 56 homes available, representing an 11.8 month inventory.

2. Days on Market – 152 DOM, a huge increase over the average 93.

3. Pricing – $107 per square foot, up from a three-year average of $103.

4. Sales – 12 sales YTD, which is 49.5% behind where sales should be.

5. Observation - Though pricing power is positive, all other indicators are negative.

2501 to 3000 square feet

1. Inventory – There are currently 33 homes available, representing an 15.8 month inventory.

2. Days on Market – 120 DOM, a slight increase over the average 113.

3. Pricing – $107 per square foot, up from a three-year average of $105.

4. Sales – 8 sales YTD, which is 23.2% behind where sales should be.

5. Observation - Overall, this would be a tough market for a builder but affords excellent opportunities for buyers..

3001 to 3500 square feet

1. Inventory – There are currently 14 homes available, representing an 10.3 month inventory.

2. Days on Market – 146 DOM, a huge increase over the average 73.

3. Pricing – $126 per square foot, significantly up from a three-year average of $116.

4. Sales – 7 sales YTD, which is .2.9% ahead of where sales should be.

5. Observation - The pricing power and strong sales rate make this size home attractive for builders but the DOM and current inventory are of concern.

3501+ square feet

1. Inventory – There are currently 11 homes available, representing a 15.8 month inventory.

2. Days on Market – 268 DOM, a huge increase over the average 63.

3. Pricing – $135 per square foot, up from a three-year average of $128.

4. Sales – 2 sales YTD, which is 42.4% behind where sales should be.

5. Observation - Buyers should be able to find some good values here.