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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Beachside Bill who wrote (58820)	8/2/2006 6:21:14 AM
From: Think4Yourself	Respond to of 306849

Why would you care about the advertised price of the home? That's only relevant to the final schmoe. Almost everyone here is concerned with the true price (cash that changes hands), as THAT is what the builder's margin is based on, and that is the relevant figure. Mish is absolutely right in that true home prices have been dropping and continue to drop. The way you are looking at it you will only see it when owners of existing comparable homes wanting to sell are forced to capitulate. That is starting to happen now. iow, if I buy a base home for slightly more than last year and get a snotload of free upgrades, your analysis shows the price has gone up. Not true, and the guy down the street who bought and paid for all those upgrades last year knows it because he can no longer get his money back when he sells! The true price of that upgraded home has gone down. The true price of the base home has also effectively gone down. Who will buy the base home when they can get the upgraded home for the same price?