Saturday, March 11, 2006

Centex Sacramento, We Have a Problem

No, this is not a blog about Centex. But Sacramento Centex has a way of popping up all the time. The Sacramento Bee had this piece which quoted the president of Centex's Sacramento division.

Mortgage giant Freddie Mac said Thursday that interest rates for 30-year home loans reached their highest point in 2 1/2 years this week, but Sacramento real estate experts predicted the benchmark would have little effect on home-buyer decisions...

An official of Dallas-based Centex Homes, which expects to sell 800 houses in metropolitan Sacramento during its fiscal year ending March 31, said higher rates aren't dampening sales. "We're not hearing in the sales offices from buyers asking, 'What are your interest rates?' " said Jack Hood, president of Centex's Sacramento division. "I always say, 'Give me 95 percent employment and interest rates in the single digits, and I'll build houses all day long.' That's what we have in this market..."
Hard to tell if higher interest rates are dampening sales when you offer never-ending $50,000-$150,000 sales. It's curious that wasn't mentioned specifically. Has anyone heard of Centex offering such significant discounts for this length of time anywhere else in the country? (If you have, please comment below.) Obviously Centex is experiencing some "difficulties" here in Sacramento given all those cancellations.

6 comments:

arizonadude said...

The 150,000 is off the most expensive overpriced pigs they have. The sale is a joke I think.

HighSierraGuy said...

I think I saw a reference to discounts in Dallas at Ben's a week or two ago, but something like 30k (which may still be 10-20% off in the Dallas market).

I love the line about "building houses all day long". It sure as hell looks that way, whether they're selling or not.

Also, I saw a HUGE inventory of unfinished homes while passing through Merced this weekend. These developers must be counting on the Trouble With Tribbles syndrome for buyers.

drwende said...

I'd love to know what the carrying costs are on the land Centex has bought to develop. The one figure I've heard quoted for an infill (non-Centex) development down in Modesto was so big that I didn't quite believe it and therefore don't remember it.

Happy Renter said...

As anyone else noticed that the inventory in Sacramento hasn't really gone anywhere in the last few months. It's beyond high but holding steady. I expected a spring surge by now. I guess the weather hasn't completely cleared yet.

Happy Renter said...

Jimmy Castros new post was interesting. He wasn't exactly positive but he was telling people to hold onto their investment properties. I can't wait until their little market rating scales read one.

dd said...

A few other Centex divisions have held 12 hour sales, with the same great results as Sacramento. (Great for them in terms of sales.) Centex seems to offer discounts on houses that have not sold, but are due to close escrow fairly soon.