At the peak of the real estate crisis, prices of new and existing homes were fairly close together, but as the market steadily recovers the gap has begun to widen, according to Lawrence Yun, chief economist at the National Association of Realtors.
It makes perfect sense that new home prices are higher than existing homes, as they come with new carpets, appliances and paint and are typically bigger, he said. Yun added that one of the main reasons the gap has widened is rising costs of building materials and labor. New homes also typically come with a minimum price for builders to even consider construction ? $220,000 Yun said.
Yun said he believes high costs of construction-material should continue to widen the gap between new and existing home prices. That being said, buyers could potentially find some deals in the existing-homes market.?
Despite the widening gap, the median price for existing-home sales has been steadily rising. According to NAR, the national median price in August was $187,000, which was 9.5 percent higher than August 2011 and the sixth straight month of year-over-year increases.?
This entry was posted on Monday, September 24th, 2012 at 9:00 am and is filed under The Real Estate Market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Source: http://www.homefinder.com/news/real-estate/2012/09/24/nar-new-and-existing-home-prices-far-apart/
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