The 2006 Preconstruction Buyer's Market

Orginally Posted on Saturday, February 11, 2006

As 2006 gets really rolling here in February we are in the midst of the first Buyer's Market in years as the market cools and appreciation returns to more maintainable levels. This is great news for buyers of existing properties becuase now that the bidding-wars have stopped there is finally room for negotiation...and the sophisticated Buyer who is well advised by his Real Estate Agent can save tens of thousands of dollars simply by asking. But how does this new market affect Buyers of brand new shiny Preconstruction Properties? Since you can't negotiate a price with a Developer how can you benefit from a Buyer's Market?

Well the first thing is that you can negotiate a price with a Developer. The market is slowing and many Developers are desperate to meet project deadlines or face losing millions in profit so they will indeed make actual reasonable concessions on prices, usually in the are of Premiums for height or view in hi-rises and lake or golf view in single-family and townhome preconstruction. However, beware of those willing to bend over backwards as it may be a sign of project instability. A Preconstruction Specialist, such as your's truly, will be able to tell you if a Developer will complete a successful Project.

The second thing is that Developers are incredibly sensitive to the market and many will offer Concessions in various other forms, such as free Maintenance, lower Down Payment requirements, Financing options or special Contract Terms. The trick again is that many of the Developers who are offering the biggest Concessions are the ones who are in trouble financially and may not finish a project. The sophisticated Buyer who is well advised by a Preconstruction Specialist will know which Developers will finish a project based on factors such as the Developer's history, the financial state of the Project, the location of the Project and of course the Preconstruction Specialist's professional opinion of the project. Having seen thousands of projects I can tell you there is a feel for the project from the first point of contact to every bit of communication from that point on. If you know which Developer will succeed in your desired location you can decide from those offering the best concessions and save tens to hundreds of thousands of dollars or even millions depending on your particular needs...