Perks Don't Show up in Median Prices

One of the frustrations of real estate bears has been the lack of price moves to the downside, despite the huge increase in supply. Many have pointed out though that ugrades and incentives do not show up in the final price paid for a house. For example,when a seller has to throw in a $4,000 plasma TV to close a sale, the value of that TV is not subtracted from the the final sales price that is reported to the county.

"Home buyers across the U.S., take heart: 2006 is shaping up to be your year.

As the real estate cycle gets put on cool, the balance of power is shifting from the seller’s corner to the buyer’s. And homebuilders are responding with plenty of perks, especially in areas like Las Vegas and San Diego, where there is a lot of new home construction and where there is not much diversity in what is being offered, said Nicole McAllister, director of development, for the Lusk Center for Real Estate at the University of Southern California.

“Buyers ought to do alright this year,” agreed Stephen Melman, director of economic services at National Association of Home Builders, a Washington, D.C. trade group which surveys developers on the use of incentives."

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