Why pay the same price for a 20-year-old roof when you can buy a shiny new house at a lower price?
This chart is the most important signal in the market right now. The historical premium for new construction has vanished for the first time since the 1980ies!
In Miami, we are seeing this play out in real-time. Builders in "A-grade" locations have excellent inventory that needs to go. They are more flexible on price concessions/ upgrades or buy-downs and move faster than the resale market.
The "Alpha" is in the Builder Inventory:
Coconut Grove, Kendall, South: While resale sellers hold firm, we are seeing brand-new 2025 townhomes hitting the market with aggressive pricing to move volume.
Edgewater, Downtown & Brickell: With condo inventory up significantly year-over-year, developers are responding. We are seeing extended deposit structures, free upgrades and "immediate occupancy" incentives becoming the new standard to clear remaining units.
The Math: You can pick up a warranted, new-construction asset for the same price—or less—than a renovation project down the street.
My take: Why bother with the old if you can buy something new and shiny?
Want the list for your area? Respond in the comments or message me for my whisper list of hot deals!
Chart via Torsten Slok