CNN: "The U.S. Federal Reserve dramatic 75-basis point cut in interest rates Tuesday intensified speculation that other central banks could soon follow in slashing the cost of credit…The Bank of Canada, which had already been easing interest rates, on Tuesday again cut its interest key rate by 25 basis points to 4.0%. It was unclear if the steps were concerted, nor werer there signs of similar moves among other central banks Tuesday. But markets speculated that the big Fed cut could usher in a new era of falling interest rates globally."
Globe and Mail: "The U.S. Fed’s massive unscheduled rate cut this morning is the clearest sign yet of how worried it is about the states of the economy and the markets, and more cuts are pretty much sure to follow, economists say."
New York Times: "For the shaken world markets, the move seemed to provide some relief. When trading resumed after a Monday holiday, Wall Street initially joined in the plunge that had shaken Europe and Asia for two days. But after opening down by more than 460 points, the Dow Jones industrial average was off about 75 points, or 0.6 percent, at 1 p.m."
Moody’s Chief Economist: “It’s a once-in-a-generation event.”
Forbes: "Gold jumped by more than 10 usd in the immediate aftermath of an emergency 75 basis point rate cut from the US Federal Reserve, as the central bank of the world’s largest economy moved to try and stave off a recession which could spread around the world."
BBC: "This is huge….The last two such emergency cuts were on 17 September 2001, shortly after the attacks of 11 September, and on 3 January 2001, in the wake of the dotcom bust…The last time the Fed cut rates as much as three-quarters of a percentage point was in August 1982, almost 26 years ago. Even if it isn’t going to work as well as it did in 2000 [in response to the dotcom crisis], it might at least prevent markets and the economy driving themselves ever deeper in to a quagmire."
Reuters: "The Canadian dollar rose off a four-month low versus the U.S. dollar on Tuesday as a surprise rate cut by the U.S. Federal Reserve and a smaller cut by the Bank of Canada put the interest-rate spread in Canada’s favor…the reaction of the Canadian dollar over the next few days is going to depend on whether or not we get some stability and confidence returning to the market."
What are your thoughts? Will it make a difference? Too little too late? Will it scare people or encourage people? How will it affect Alberta? Canada? The housing market?
Now the question is if the Banks …I mean CIBC, RBC, TD and so on…..will cut their rates, since the last time the Bank of Canada did this they actually increased their rates instead of deacreasing it…blaming of course their profit margins….what a bunch of croak……
)
yes, banks need to lower their rates, high housing prices, high realtor commissions and high mortgage rates, what do you expect?
In all honesty I’d be surprised if bank lowered their rates considering the amount of losses posted by many of Canada’s leading lenders in the first half of the month from the previous quarter. It will be interesting to see if they follow suit.
RBC, BMO, TD, CIBC have all cut their rates already. Quick to cut if you ask me? I think another 1/4 or 1/2 in March is very likely. Got any good stock tips. Ouch! not only did the Mom and Pops get nailed on Real Estate in the USA now were all getting nailed on stocks. I think we will see a bounce in the stock market in the near future but then another massive drop after that. Then everyone will be broke everywhere either from Real Estate or Stocks. Alberta Real Estate is going to better than the rest of Canada through this meltdown. Canadian stock are going to do better than most countries as well. If you’d rather own Real Estate in Central Canada where another half million jobs may just go up in smoke then have a nice trip.
A lot of good dividend stocks are an incredible bargain now. But I think that there is still some room for the markets to drop.
The US fed cutting their rates by so much might push the DOW meltdown back by a couple days, but it’s still coming. Lower interest rates are just going to boost inflation down there, you can probably hear that whistle of the US dollar diving in value…
After things settle, pick up some nice dividend paying stocks, BMO is one hell of a bargain already. I’ll pass on CIBC though, they’ve clearly been caught with their hands in the same jar as Citi, Bank of America etc…
Rate cuts don’t increase productivity. Rate cuts do not generate wealth from nothing. Rate cuts do not provide any long term fix.
I am unsure about the consequences of the infantile tantrums thrown south of the border trying to maintain their undeserved lifestyles. That whole country is a write-off.
I am surprised they posted this article on their blog.
Considering this article could be taken either of two ways
1. Oh boy! Cheaper money to go play with! Lets buy another truck or better yet a house!
2. Cutting rates is a move out of desperation. It only will delay and exacerbate a pending recession. It will hasten inflation, and when inflation gets further out of control, more drastic measures (ie: a two fold interest rate increase) will be in the works. I wouldnt be surprised if double digit interest rates are the norm 5 years from now, because inflation is out of control.
My point being is, nobody should be putting themselves into anymore debt, especially when it comes to a house. If your thinking of buying and taking on a mortgage, I suggest you wait for a number of reasons.
1. Mortgage rates will probably reach double digits in 5 years, so interest costs on your asset will be overwhelming, you might have to foreclose.
2. When interest rates reach double digits when we hit an recession, there will be a glut of inventory on the market from desperate sellers who cannot afford their mortgage payments and prices will be a fraction of what they are at today.
Well there it is boys and girls. Today’s economics lesson for you.
With the stock market being a scary place to have your money the only safe place to have it is in condos in Edmonton. Most indicators point to higher values 12 to 24 months out. With as little as 5% deposit, new condos should provide a good ROI.
=> Realist
I have heard that same doom and gloom story for over 20 years. Even when I could build a home for 80k some people had your story. It’s not new and it’s not true.
I have to be more inclined with Realist, although maybe not so doom and gloom. Lowering rates is very much a short term panic tactic to try and bolster the economy, but its a slippery slope. Making it cheaper to borrow, especially on equity, can come back to bite a large number of people. Unfortunately when you give people enough rope and they’ll hang themselves. With the cuts, and with many saying there will be further cuts, inflation goes up, more spending, more debt, and many will get caught when the rubber band snaps back and interest rates start climbing. It’s really not solving anything other than short term outlooks. Now I’m not an economist by any stretch, but just as Condo Salesperson, seen it before.
Very well put Sabb. I completely agree with you about the “hanging themselves” metaphor.
One question I have though, and correct me if I am wrong, isn’t the point of a rate cut to slow the chance of a recession by encouraging an increase in spending? The result, getting back to a “normal” economy.
Correct Stephen, that’s the goal of the rate cut. Unfortunately, it’s only going to delay what’s due. The economy, housing and stock markets are cyclical and most economic factors say that a downward trend is long overdue.
Overspending and the build up of consumer debt is what caused the beating that the financial sector is taking, credit has been tightened and a lower rate will only save a small fraction of the foreclosures that are still on the horizon.
A lot of Canadian stocks have dropped too far. They will probably rebound quickly when things settle. But the US economy is in trouble and when things get tight down there, our economy will begin to slow. 90% of our exports go to the states, we’re chained to their leg.
when I came to Canada, Michael Wilson was the Minister of Finance
and he kept fighting the inflation with high interest rates( 11-13,5 % )
But, he lost the battle, because inflation remained high for years and years( for a decade or so?).
Then, the interest rate had been lowered ( 5-7 % ) and the inflation
came down as well. ( 1-3 % )
I believe this will have a positive effect on our market i am currently selling my home and have had 3 showings in the last 2 days. people who have been waiting i think will take the plunge. I have also been told by many market pros that out of all markets in canada,alberta will be the safest if any recession is near future.
I believe this will have a positive effect on our market i am currently selling my home and have had 3 showings in the last 2 days. people who have been waiting i think will take the plunge. I have also been told by many market pros that out of all markets in canada,alberta will be the safest if any recession is near future.
“When Ben Bernanke cuts rates, banks don’t necessarily lend more freely.”
http://www.forbes.com/business/wallstreet/2008/01/22/fed-banks-citigroup-biz-wall-cx_lm_0122banks.html
“Bernanke and company are using up their limited ammunition, but genuine problems remain with the low dollar and U.S. debt, argues Allan Sloan.”
http://money.cnn.com/2008/01/22/magazines/fortune/sloan_irrational.fortune/index.htm?postversion=2008012217
As you can see from the above articles the underlying economic problems in U.S. cannot be fixed by a simple rate cut.
The Alberta RE market is already oversupplied and any slowdown in economic activity will make it worse. The current inventory cannot be absorbed without a significant economic growth that U.S. recession may quash.
Well is the cup half full or half empty? Perspectives do not seem to change, only the information. Suncor doubled profit for the last Q4 for a measly 963M. Now why are some making claims about oil companies not being profitable in Alberta? One assumtion that was make by realist was that interest rates will climb to double digits but who knows. Low interst rates do not mean inflation by any means and with home prices down like 50K and longer term mortgages available why wait? It is a risk one way or another. Snooze and lose or pay off your mortgage instead of your land lords.
Suncor’s profit were still below expectations. They’re paying for it on the market today.
I’m not one of the bears that thinks the market is going to drop 50%. But it seems pretty clear to me that the US economy is going into a recession which will also slow things down here.
A third of the homes for sale in Edmonton are empty right now. That’s a lot of people paying multiple mortgages. Definitely pays to be patient in this market.
Earth will be sent a message of hostility from an alien race targetting Alberta for initial erratication. Nothing will save us, they will come down from everywhere. All SFD and condos in Edmonton and Alberta area are going to drop to negative value. You will be forced to work the rest of your life to pay off the taxes on the scorched earth after you declare bankrupcy as the new government enacted the responsibility code which forces you to take complete ownership and obligations of land in perpetuity.
OH WAIT. My mistake, I thought we were making up tall tale stories here….I’m sure you will forgive me as you have read the above stories and can see how I could have gotten confused.
Average condo prices, to date, up by $13,000 in Calgary from December and average medium price up by $2,500.
That shows, what direction the market is going.
Condo Salesperson said:
>>>With the stock market being a scary place to have your money the only safe place to have it is in condos in Edmonton. Most indicators point to higher values 12 to 24 months out. With as little as 5% deposit, new condos should provide a good ROI.<<<
Then why sell your condos? You should buy them to make more money.
No….. No condoperson you have it all wrong. No matter what happens you will lose money on real estate according to a large portion of posters on this blog. Everybody in Alberta could inherit $2million and turn into a tropical paradise but people would declare that due to A, B and C (generally absurd, incorrect and absurd reasons) real estate is going to crash. Blatent facts like interest rates declining making mortgages more affordable mean nothing to these people. Somehow one scientist even spun the interest rate cut(low interest right now) into meaning double digit mortgages in 5 years as a reason to WAIT to buy real estate. HAHAHA. Some of the logic here is amazing. He spouts some of the worst and most flawed cause/effect analysis I have ever heard. Then, after he concludes that interest rates will be way higher 5 years down the road advocates basically renting for the rest of your life.
Pray tell good sir. When these interest rates are so high down the road and everyone is selling there homes because they can’t afford the interest because obviously they must have no jobs and everyone moves out of Edmonton to go live in the other Utopian areas of Canada and US, how are you going to be better off renting?
Here it is for YOU. When and if real estate really crashes, you are going to be in bad shape whether you rent, own or live on the street because you won’t have a job and neither will anyone else.
Jesse,
Although I find your banter humorous, I fail to see any support, facts, or references to support anything you’re trying to convey to the rest of the readers. I understand you may feel that some of the posters on this blog may be exaggerating some of their feelings, but most of the posters I’ve seen try to support their conversations with relevant information in news articles, posts, or other reference material from reputable sources.
I think everyone on here would agree that there might be a decrease in pricing on the market, but not a full out crash. There are some that hope for one to make things on par with 5 years ago, but realistically a major set of events needs to take place for this to occur.
Concerns over the market both stock and RE are definitely at the forefront of everyone’s minds who has any concern over these areas, and even people who don’t really pay attention to these trends should take notice at this time due to the impact this will eventually have on them regardless if it be major or minor, positive or negative.
I would suggest possibly pointing out errors in ways with supporting facts in the future, or else you risk becoming exactly like the people your poking fun at, “…generally absurd, incorrect…”.
You do however make some valid points, but I think the meaning in these points gets lost in the overall negative tone that comes across in the rest of your post.
$0.02
Sheldon, could you let us know what things have been like over the last few days in terms of calls and showings? Is the stock market and interest rate news having a noticable effect on activity or sentiment in the real estate market?
Market Watcher, I can answer that one for you. It’s been busy…. very busy! Lots of activity – buyers and sellers. If the world is coming to an end everyone wants to have their contracts finalized before it does.
Sabb,
Thank you for your well thought out and worded response. It included unbiased general information along with sound advice. Quite refreshing.
My posts for today were just trying to make the blog have some balance is all. I am relatively neutral on the market in general but just want to make sure the blog had some balance to it.
The reason why I no longer try and quote resources and facts is sort of sarcastically explained in my previous post. Some blogger will somehow come onto it and construe it in some fashion incorrectly to come to the conclusion that the world is going to end. So it makes it somewhat pointless. But in the end you are correct and if a person sticks to intelligent well thought out posts based on facts, it can help assist the intelligent people on making informed decisions.
I listed my S.W. property on Com Free in November…it was dead. Since the new year things have changed; getting lots of calls from real buyers and agents with their buyers. Just need one offer!
I wish the best of luck to Slade – I am glad to hear there is renewed interest in your property. Currently only 3% of all listings on Comfree sell each month – I hope yours is included with those.
Jesse, I would love to take the time to make things clearer for you – but instead I’m going to recommend you go to the library. Read a macroeconomics textbook and perhaps an international finance textbook. Learn all about monetary policy and how expectations are a big driver of the markets (including real estate). If the bearish arguments do not make sense to you, I think this information will enlighten you.
Just a point of clarification: The prime rate has come down, but mortgage rates have not. The banks are not obligated to change their lending rates even if the Bank of Canada adjusts prime. There have been stories in the news suggesting the banks might not follow prime and take this opportunity to make back what they have been writing-down due to exposure to subprime mortgages. Before you say mortgage rates have come down – make sure you’re actually talking about mortgage rates.
Jeff,
I had no idea only 3% of the homes listed on com-free sold each month. I’m guessing it’s cause the properties are listed too high. What other reason could it be?
Where did that stat come from?
slade,
jeff is full of it regarding comfree. Not much is moving via comfree or realtors.
Yes some homes are listed to high, so are an equal amount on MLS. That being said, many are listed to low. In fact there are many great deals on comfree right now.
The only way you will know for yourself is to do some fact finding on comfree and mls. Draw your own conclusions.
Jeff
My mortgage rate has come down, it’s a HELOC tied to prime, ie open mortgage, the only kind anyone should ever get.
I would agree with your theory Slade – houses on Comfree are generally higher than on MLS and this has created lower sales. I speculate that there is some pride involved – prices are sticky because everyone wants to get what their neighbour got last spring. I would also speculate that the 3% that are selling are probably the best 3% (either best price or best value).
Laura, it’s actually simple math – go to the monthly reports that Comfree puts on their website. In November, they sold 124 out of 3060 (4%). In December, they sold 91 out of 3026 (3%). For more current information, go through all the listings and count the number of SOLD signs – they leave the sold ads up for two weeks. Multiply the number of SOLD signs by 2.5 and then you have a pretty good approximation of January. My estimations put January somewhere between 3% and 4% of total listings.
I would agree with Laura’s comments that not much is moving with realtors either – but the MLS statistics are not as poor as Comfree has been lately.
Laura,
Who’s to know for sure. I let a real estate friend of mine sell my last one in 2005 ($700,000 in College Woods) It sold in 4 hours. I am a business person and was a drilling contractor so buying and selling large assets are not new to me. I just thought I would give it a go this time. I guess time will tell if I’m cut out to be a real estate salesman.
I agree with you Neil – Variable mortgages are the way to go. I noticed after I posted my previous comment that my bank has also lowered its variable rates. My bad. Hopefully the fixed rates will follow soon (my bank hasn’t changed those rates yet).
Lowering interest rates SHOULD be positive for house prices. It is logical that lower borrowing costs mean people can afford to offer more. However, I am cautious to predict that lower variable mortgage rates will outweigh the downward pressures that exist in the market right now.
Jeff,
I checked the comfree stats. you are right if you check the last couple months of 2007. However….for the year they had 8315 listings and 3798 sales. I think that is about 45% sold.
Well Jeff, not 1 hour after your tirade you are already eating your words. I was about to comment how my mortgage has come down and likely most others too as lots are tied to prime. However, simple competition will set the prices people get mortgages at. There is speculation bankers will try to keep rates up and if they do they will likely get undercut and other banks will take the business at lower rates.
Your ignorance is simply astounding. Even you conciede that interest rates will lower mortgages, then you state that expectations drive the market. This is fine, nothing I stated conflicts with expectations driving the market. The problem you are having is that you think you can determine expectation and you can’t. All you can look at are facts and factors that influence expectation. I am sorry sir, but with lower interest rates, people will “expect” to pay less interest on their mortgages which basically further reduces the cost of home ownership across the country. NOW, MACROECONOMICS comes into effect. Economics 101 Einstein. What happens when you decrease the price of a commodity…… I’m sure even you can get the answer to this one.
Slade,
It’s true – but since you’re a business person, you will appreciate that annual statistics have very little relevance on the current situation. If prices shot up until June and have dropped rapidly (and continuously) since then, what does that suggest we should expect at least in the short-term?
I want to be clear that I am not telling you to use a realtor instead of Comfree. Comfree is a great service. All that I am saying is that Comfree sellers need to make an adjustment in their prices if they hope to get a buyer. Did you read Travis Holowach’s comments in the December report? To paraphrase, he basically said that Comfree sellers should get their heads out of the clouds.
Does anyone else want to offer Jesse some help?
What do I need help with Jeff? I haven’t made any statements other than an interest rate cut will lower the cost of home ownership. In general lowering the cost of a product increases demand for it but what do I know.
You are confused if you think that I have stated that I think housing is going to go up. Even if I did say that, it would be my personal opinion as gauging consumer confidence is hard to do. What is not hard to do is take the fact that home ownership costs will be lowered with this rate cut which in general will increase demand. Whether or not that will be enough to outstrip the current decline in prices is speculation. I am actually curious to hear how you can refute anything that I have said and really want to enjoy a laugh at your attempt so please do.
Jeff,
Understood. Does anyone know the MLS sales to listings for Nov., Dec. and for 2007?
Jeff,
I did the math.
Did you know only 5% of the homes listed on MLS sold last week?
Slade,
EREB is probably your best source for that information.
http://www.ereb.com/REALTORSAssociationOfEdmonton.html
For MLS is stacks up with inventory at:
October 2007: 3745
November 2007: 2729
December 2007: 1388
Sales:
October 2007: 1276
November 2007: 1223
December 2007: 857
Percentage Sold:
Oct 07 – 34.07%
Nov 07 – 44.81%
Dec 07 – 61.74%
07 YTD – 50.01%
So seems MLS looks stronger. Numbers taken from the EREB based on 2007 results for sold/listed.
I guess when you have thousands of real estate agents out there networking it makes a difference.
Jesse, you are all over the place. What are we arguing about?
I stated that lowering mortgage rates lowers borrowing costs which should increase demand but there are other factors to consider. Is that what we’re arguing about? I assumed we were ultimately talking about Edmonton house prices, not demand only.
I have tried to explain that mortgage rates are only a small piece of the “Demand” pie. Other factors such as affordability, ability to get credit and in-migration have eroded. As far as expectations go – if you have watched prices come down for seven months and read the word “recession” in the paper everyday, what effect might this have on your expectations? You are absolutely correct that consumer expectations are hard to peg, but I haven’t read a report with positive expectations in a while. And… regardless of whether demand goes up or not, where is supply? It looks to me like the high supply will have a greater effect on prices than demand.
Jesse you have continuously attacked people on this blog – often without basis. I would seriously appreciate it if you carefully defended your own point of view instead of simply chopping away without strong counter-arguments.
Good work Slade,
Sounds to me like sellers listing with realtors also have to get their heads out of the clouds and start lowering prices. What do you think?
sabb,
Your MLS Dec. inventory shows 1388 with sales of 857. Are you sure this is right? I think you forgot condos in inventory.
When I listed with com-free I used MLS for higher end bungalows in S.W. Edmonton to set my price. Like I said before, who knows!
Taken from:
http://www.ereb.com/pdf/QuarterStats.pdf
page 2 “Properties” under residential.
I believe this includes condo’s and SF but I may be mistaken, if I am, my apologise.
Slade, if you are new to the statistic reports that are available, I would also recommend
http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html
Jeff, well before you attack somebody here (which I concede I did) you should know what you are attacking them about. You attacked me with macroeconomics statements and told me to go to the library. You then made a statement which more or less said mortgage rates aren’t going to go down.
This came after my comment/attack on “realists” statement that declared that interest rates were going to be double digit in 5 years which made him to conclude to not buy right now.
So basically, it is becoming clear to me. You accidentally attacked me when you assumed that I was forecasting an increase in the market when I wasn’t. All I was doing was attacking Realist’s statement that lowering interest rates right now was in any way a contributor to decreasing current home prices in addition to execting higher interest rates over 3 times greater 5 years from now being a good reason to wait to buy.
So, in the end we might not have a problem anyways as long as you don’t agree with Realist (which I assumed you did after you attacked me)
I would also like to call attention to the statement at the end of the blog when Sara asks
“What are your thoughts? Will it make a difference? Too little too late? Will it scare people or encourage people? How will it affect Alberta? Canada? The housing market?”
Then Realist piped in with his statements, which I attacked. In came you attacking me, counter ect and here we stand. I am sure you can understand how I can get the impression that you are advocating his position.
The news is great from where I’m standing. I’ve been contacted by about ten Canadians in the last week looking to buy property in Florida. As far as the real estate goes, right now we’re getting loads of foreign investors. Euro’s pull some serious clout here in the US right now.
Just to take things alittle on the side step, does anyone know why the quartly stats from the EREB are so fundementally different by a large amount from Bob Truman’s site? Both have been quote many times in this blog as being reputable sites. Seems to be a descrepency of a few thousand listing, and with far less sales on Bob Truman’s site vs EREB?
sabb;
Bob Truman uses a different criteria than EREB, and I like his much better. He does not include the myriad of smaller communities around Edmonton in his stats that are irrelevant if you are buying or selling in the city. He does include the larger burbs. Here’s what it says:
“Includes Edmonton, St Albert, Sherwood Park, Spruce Grove, Stony Plain
Note: These areas do not coincide with the criteria used by the Edmonton Real Estate Board”
-
“Wild swings swept through global stock markets for the third straight day Wednesday as world business leaders called for new financial-sector regulation because the central banks had “lost control.”
(…)
“They’re going back to the same old story that we’ve had to put up with for the last seven years, and that’s excessive monetary accommodation that takes us from bubble to bubble to bubble,” he said of the strategy to uphold the markets.”
http://www.financialpost.com/story.html?id=258221
Closer to home the “new inventions” in mortgages (40y, interest only, 0% down, etc.) may support the Real Estate market for a while but then we all know what happened in the U.S. I would rather not see these mortgage “inventions”, let the RE prices correct to whatever the economy can support and then resume normal growth. As quoted above the excessive monetary accommodation leads to bubbles and bursting of those affects us all.
-
A simple comparison, many more like this but don’t have time to show you more…
All 4 units same complex and all 4 brand new…
MLS #E3123144 $314,800
MLS #E3125545 $329,900
Comfree # 17623 $295,000
Comfree # 18453 $299,900
I know it’s only one comparison but what more can you say. Believe me there are hundreds upon hundreds out there just like this. Are the comfree priced to low or are the MLS to high?? When you take commission off MLS you end up with the same $$.
Laura,
Sit back and see which sell first
Might be waiting for a few months…
If they are all the same units, including interior upgrades why would’nt they be price all the same? The people that own them must look at each others properties on the net. At least the Comfree owners would have room to move because of no commission. Also when a MLS buyers view the property, the ComFree guys are getting free exposure being in the same complex.
Oh yea….2 offers coming in on my luxury bungalow this weekend.
The market is getting a bit more active.
Yahoo! Patricia Bay here I come!
Laura,
Have to agree with Nate with the site back and see which ones go first. There seem to be slight differences between some of those houses where 3 of them have fireplaces, 1 doesn’t. One of the MLS houses looks to have upgraded cabinets, where the others have the pine/birch finish, the other oak. Countertops look similar, but it just might be the lighting in some of the pictures as one looks to be granite over the others which appear to be arbrite. I think these difference may account for some of the difference in pricing, but without seeing them in person who knows for sure what the deal is on each one, location of the property may be another key factor is one vs the other is on the main route by these duplexes.
sabb,
I have visited all 4 units. That is how I came across this particular madness.
Of interest… The cheapest is the largest Of all 4, is the only one with upgraded appliances and also has a fire place. No cheap laminate like the others. But for a $35K price difference who cares about that nasty laminate (FYI, I have the crap in my 3 yr old home)
To be fair, the most affordable does not face the ravine with a little tiny deck and factory views. Again who cares? Certainly not worth $35K in my opinion.
So again I ask what are we to believe is the true value of these homes.
BTY cheapest one has been listed since Sept. Come on buyers wake up! I would buy it myself if I could.
Unfortunately the answer to your question is a difficult one. It could be one of the following three scenarios:
1) It may be over zealous sellers or even RE agents recommending these be the prices.
2) They might be comparing their homes to others not even in the same area but with similar specs. It’s rather odd though considering these homes are right next to each other, in the same development no less, and to have that much of a difference in price. Honestly I could understand a 10K +/- difference depending on specs and location, but if they are truely that similar, it’s a combintation of RE agents, sellers, and probably the builder in determining the price.
3) That or they could have bought in at that price, and can’t afford to loose any money as the mortgages are still in their first/second year with no real return. This may be the most accurate case as people have started purchasing with 0 down/30 yr mortgages over the past year.