Unabsorbed homes are those that have been built for sale but the builders have decreased the prices due to the unavailability of buyers in the market, causing a low demand for properties. These properties stay new and vacant for a long time, thus decreasing the prices of such properties. The number of unabsorbed properties and rental condos in Edmonton has reached 1251 in October and have been vacant since the time of completion of their construction. These houses and rental condos have not been sold out or rented. This decreases the value of the real estate market. Because, when there is more supply of a commodity than the demand the prices automatically go down.
Real estate is a big market and can be affected by the economic downfalls and uprises. If you’re looking forward to buying a new home but are waiting for the prices to go down, this might be the time for you to move ahead and make further enquiries. The rise of supply in the market sometimes decreases the value of the properties and the demand for such properties is very low. This becomes a bad investment for the builder as he wants to get returns from the property, but it is better for the buyer on the other hand as the property will cost you relatively cheaper than the market with the benefits of negotiable prices. Unabsorbed homes have seen a recent rise in recent times which has decreased market prices.
How are Unabsorbed Homes Affected?
Unabsorbed properties are the first to have a fall in their prices. Since the builders of such properties would not have been getting their returns on the investment they have made, they would want to make the property occupied. They need to sell the property soon as the cost of maintaining the property from the damages of weather takes away more money from their hands. This is why the properties and rental homes in Edmonton that have been vacant from the time of completion have diminished value. These properties have the most negotiable prices.
The number of unabsorbed and vacant properties has recently seen a steep growth and has reached almost 890 in Calgary. There has been a 53% increment in the number of homes that have been vacant since the time of their completion and are diminishing in value and market price since October. Even real estate marketing companies listing such properties are looking forward to selling the house to people for negotiable prices. Prices of such properties will vary depending on the location and the amenities that the area has.
Is It Advisable to Buy Unabsorbed Properties?
A downfall of the real estate market does cause a problem for the builders and sellers, but for the buyers, it is the right time to own a new home. As discussed above, the market has seen a recent fall in demand for properties and new homes. It is highly recommended as the right time to invest in a new home or just a house you want to rent out. As a bonus point, when you directly buy from the builder, you get added benefits that are not offered when you buy it from a homeowner.
Customization
Generally, when a builder is constructing a home, buyers are informed firsthand about the property. If the builder sees no response from the market, the home is left with just the outer construction and basic internal structure. The finishing of the home is not completed until a buyer is really interested in the property. This allows you to have the privilege of personalization for your new home, which is generally not what resale homes provide. The builder always takes into consideration the needs of the buyer and designs the interior accordingly. You can choose the location of your kitchen, bathroom, and other areas according to your comfort.
Energy Efficiency
Vacant and new homes are much more energy efficient than resale homes. The most recent energy conservation codes that came out in 2009 required the homes to be 17% more efficient than the houses built prior to the time. When you buy newly built homes or rental condos in Edmonton, you get a home that has not been used so there is no wear and tear in the energy efficiency fittings like window insulation and rooftop insulation. Since these fittings have not been used, the house is tightly packed to keep inside the cool conditioned air during summers and the warmth during the winters.
Less Maintenance
When you buy a new home, it really is new. In a home that has been listed for resale, there would be years of usage of the utilities and other things like flooring. But when you buy a new home, it has not been used since the completion of its construction. This makes sure that the home is in top-notch condition when you move in and there won’t be much maintenance needed for at least two years. So, buying a new home saves you the cost of maintenance for a long time.
Warranty
When you buy a new home in Canada, the builder often provides you with a warranty as a membership benefit. The warranty provided by the builder includes repairs of any defects found in the home construction, material defects and also insurance on deposit. Some of the warranties may also cover the home’s mechanical systems and the insulation of the home. You can upgrade your warranty and get an extended warranty period which is basically 1 year in most cases.
Whenever in need of a new home in a new location, always check if there are unabsorbed properties in the area. An unabsorbed property will be a much better investment than investing in a resale property. If you need a new home or rental condos in Edmonton, contact us at Rental Advisors.