Real Estate and Home Mortgages - Most advantageous time to "buy" new construction?

I have been looking at new construction versus existing homes because the builders are undercutting what most homeowners could possibly afford to sell for (BTW this is in the DC metro, where most townhouses currently sell for at least 500K and consequently values on most homes have dropped at least 100K).

From what I know with new construction there are two really important stages 1) Entering a sales contract and 2) Closing, which may be seperated by 6 months or more. My question is what is generally considered peak season for new construction home sales (and by sales I mean entering a sales contract since I assume that is when you settle on a price)? I have heard a sales lady say that Jan, Feb, and March are typically peak season, but I would not consider this a reliable source for obvious reasons. Several people have told me that Winter (Dec, Jan, Feb) is the best time. A friend also recommended buying right before New Years because that is right before sales commissions are counted for bonus purposes. At this point I don't know what to think.

Thanks in advance!

Get a realtor and ask them these questions - they know the specifics of the area and it's the seller who pays their comission anyway.

I don't really think it's seasonally driven. It's all about the market. Now's a good time to buy and a bad time to sell. Around most areas that were booming, there is a glut of new homes. Those builders want out from under them. Especially the independants. If you go to a tract by one of the huge developers, that may not be so. But smaller developers and builders that have built spec houses, they need to get rid of them.

Those in turn drive down the price of existing houses. If you can do it, I'd buy now. Unless you're in a depessed area, I don't think it's going much lower. I don't know how fast it'll go back up though, but I think that's the direction for most areas soone or later.

Do some research, but as you noted, a realtor will have some bias. Regardless of who pays them, they want to make a sale, and they want it as high as possible. And a lot of new homes aren't listed with agents. The builder that needs to get his spec homes sold may not want to pay the commisions. Alot of money, you know.

Well the best time to buy is when the builder is HURTING, and that's not going to be on a "6 month out" build. The builders are hurting when they have to keep rolling over their construction loans because they have completed units sitting idle.

Find an area that you like, find a builder with lots of unsold inventory, consider the concessions they are offering and then negotiate HARD, asking for (starters) another 20%. If you don't ask, you don't get and builders are HURTING.

frank

I agree, a GOOD realtor (read: not just A realtor) familiar with your area can tell you the best.

Here, right about now through Feb is the slowest part of the year. In March things pick up and stay that way through the summer.
There are builders in some neighborhoods selling houses like hotcakes, but I've also closed loans on purchases where the builder had to BRING to the table $13,000 or so just to be able to sell the house. If you see a house that the builder has been sitting on, unsold, for 6 months to a year, you know they're hurting to get rid of it. There should be a lot of houses like that these days in most parts of the country. Here, those are typically the 1800-2400 sq ft houses, not the smaller ones. The 2nd/3rd homes (as in not first time buyers) are the slowest areas. There will always be first time buyers, but people slow down in buying their next houses when the market is dwindling.

If you want to build, then get in when materials are on the low side, which is typically late december/early january. That's going to require some research on your part to see if you are getting the price breaks.

I locked in just before christmas, and saved about 10k on materials.