Newly built homes have become much more expensive than existing homes since the recession, but the price gap is starting to narrow.
John Burns Real Estate Consulting reports new home price premiums are starting to slow across the nation, particularly in markets including Atlanta, Dallas, Phoenix, and Sacramento.
From 1990 through 2006, new home prices were typically 10 to 20 percent more than existing home prices, but after the recession, new homes had prices 35 to 40 percent higher than resale prices. Over the last 12 months, resale prices have started to gain ground.
Do we expect this trend to continue? Absolutely. This is what should be happening. The current new-resale national price gap of 35% (full year 2016) is still well above the norm. The fact that this gap has closed gradually and in fits and starts indicates that the going may be slow, but the trend will likely be here for a while.
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