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Matthew Strozier of the Wall Street Journal wrote about the pricing shift for new homes on Friday. As builders begin the spring building season, Strozier cites a recent note from Rick Palacios Jr., a senior research analyst at Irvine, Calif.-based John Burns Real Estate Consulting, concerning the “new normal” for home buyers.

According to the U.S. Census and research by John Burns Real Estate Consulting, 75 percent of all new single-family homes are now priced under $300,000. So, there’s little surprise that the high end of the housing market has dipped significantly,  pushing more buyers to the $200,000 to $300,000 range.

While this development might lead builders to hone in on more conservative home buyers, Strozier points out the dip in luxury home sales might also create opportunity:

“…All is not lost for luxury builders, the research says. There’s less competition for them, and their share may tick back up if the economy continues to improve.”

If you’re a builder, do you focus on the $200,ooo to $300,000 sweet spot or pursue less competitive business on the high end?

[Graph from Wall Street Journal]



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