Exactly Where Are All Those $206k New Homes??
As [new home] sales rose, median prices . . . continued to fall, slipping to $206,200 from $232,100 in June a year ago.
–Jack Healy, “New U.S. Home Sales Rise Sharply as Prices Fall“; The New York Times (7/27/09)
The big financial headline today is an unexpected monthly rise in new homes sales. According to the Commerce Dept., June sales of new, single-family homes increased 11%, to a seasonally adjusted rate of 384,000.
What caught my eye, though, was the median price: $206,200.
Suffice to say that that’s not the price of new homes going up in Edina, around Minneapolis’ city lakes, or in Minnetonka.
Rather, that’s the price of new homes in places like Albertville, Ostego, and Farmington — areas 30 miles or further away from the city center, where developers threw up tract homes by the thousands.
Closer in, new homes are strictly custom, one-at-time “leapfrogs” from former tear-downs to, well . . . something much nicer.
A quick look on MLS confirms that.
Since 2008, 24 new “spec” homes (built for resale) were listed in MLS Areas 300 and 309 (roughly covering from Cedar Lake to Lake Harriet).
Average price: $1.03M. Median Price: just under $800k.
(The difference is explained by several, extremely high-end new homes in Lowry Hill, which pull the average up.)