Phantom Properties: The Rise of Ghost Homes That May Never Be Built

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 Key Points Discussed:
  • Hot New Home Market:
    • Subdivisions are selling out faster than they can be built.
    • Speculative sales have reached record highs, with homes sold before construction starts.
  • What Builders, Realtors, and Buyers Are Seeing:
    • Builders are offering homes for sale that aren’t even built.
    • Realtors working with builder-sellers are managing contracts for speculative homes.
    • Buyers are navigating uncertainty when considering not-yet-built homes.
  • Escalation Clauses and Price Increases:
    • Contracts may include clauses that allow price adjustments for increased costs (e.g., lumber, labor).
    • Builders often have opt-out clauses, enabling them to cancel contracts if prices rise.
  • Buyer Risks:
    • Buyers may unintentionally serve as financial leverage for builders, helping fund other projects.
    • The lack of a set price creates significant financial risk.
  • Real-Life Example:
    • A family contracted a home for $170,000 but faced multiple price increases, reaching $220,000.
    • Their lender wouldn’t approve the higher amount, leaving them unable to proceed.
    • They incurred extra costs, including increased rental fees, due to project delays.
  • Advice for Buyers:
    • Consider waiting for homes to be completed to avoid escalation surprises.
    • Explore resale options to avoid the uncertainties of speculative home buying.
We Want to Hear From You:
  • Are you a builder or realtor navigating this speculative market?
  • As a buyer, have you faced challenges purchasing a not-yet-built home?
  • Share your experiences and thoughts in the comments!
Tune in to understand the complexities of this booming yet risky new home sales market. 
Phantom Properties: The Rise of Ghost Homes That May Never Be Built
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