Spec building -- market metrics?
I am working on finding a site for my first spec build. I'm looking in a few different neighborhoods, all next to each other and relatively similar. These neighborhoods have seen a huge demand for new homes over the past few years. They are all infill, city neighborhoods with great school systems. A typical spec build consists of buying a older, smaller home and then replacing it with a larger, more expensive home.
New homes have been flying off the shelves the past couple of years and these older, "tear down" homes often have multiple offers on them the first day they hit MLS.
Lately, however, I've been noticing that the new homes are sitting on MLS longer and longer. It used to be that they'd always sell within 30 days, sometimes 45, but now I see them routinely sitting on the market longer. A friend and experienced spec builder brought a gorgeous new home to market in a great location and it's now been sitting on the market over 60 days.
I'm growing a bit concerned and wanted to reach out to the experienced spec builders to ask what other market metrics should I be looking at? Building these homes has been a no-brainer over the past couple of years, but maybe that's changing? I've spoken to a couple of builders and agents and they say it's just the summer season and that's what always happens. Minneapolis is a buy in the spring and fall market according to them, because everyone is at cabins, traveling, etc during the summer months. That's great, but I don't want to rely on anecdotal evidence. I'd like to evaluate some hard data.
What market metrics do you typically monitor/evaluate to feel comfortable going forward with a spec build?
Thanks in advance,
Sean