Thursday, June 01, 2006

Sacramento Homebuilders "Slashing" Prices, Cutting Personnel

From CBS 13:

Is The Building Boom Going Bust?

Developers are not ignoring the housing glut and the rising interest rates. According to a national housing consultant, they're renegotiating land and lot purchases and in some cases even walking away from deals. Builders like Centex and D.R. Horton are not just cutting prices they're cutting personnel...

Today, the 30 year fixed mortgage hit 6.66% - a four year high. Now, builders are not just lowering prices. They're slashing them. At the Landing at Riverdale North, Beazer lopped $16,000 dollars off $425,000 dollar houses. In Folsom, more than $55,000 dollars off homes selling at $586,000 dollars...

David Garibaldi knows the buying power of patience. "By waiting a year we could have saved tens of thousands of dollars," he says. He and his wife might pay more in interest but that was offset by the enormity of the incentives and price cuts. "We really waited until prices went down to have a little leeway in the buying department," says Garibaldi.

4 comments:

Lander said...

"But national housing consultant John Schleimer says now is the time to buy. In April, 2005 4,423 homes were for sale. By April 2006 that number hit 11,3444. That's an increase of 156 percent. The combination of housing glut higher interest rates and slow sales means good deals ahead."

If there are "good deals ahead" why is now the time to buy?

Happy Renter said...

Now, is always the best time to buy to these #%@&$@!!%'s. They nock of 10% and say it's a steal.
Sadly the media only listens to them.

For the average person, a homepurchase at this point in time would be financial suicide.

tom stone said...

leeway? how about a lee shore with your mast in the water,no auxiliary,and a cat 5 hurricane due in 5 minutes.....i am expecting quite a few vulture funds to buy at a 25% discount from todays prices and eat it big time. anyone who makes a buy decision based on the last downturn is going to get hurt.the difference in the financing alone is enough to make this bust significantly worse,not to mention the dependence of the economy on housing...oh,jobs.yes ,jobs go bye bye.good deals are ahead.wait for them.

Wannabuy said...

I agree with Tom Stone,

The bottom of this market is further down than before. When will I buy? When inventory is obviously starting to normalize.

I expect when the "vulture funds" jump in, a lot more inventory will be dumped on the market.

Oh, for the record, I am part of a "vulture fund." But we have a specific goal and its to buy a shared vacation property for lifelong use (its not an investment). The fund is also amoung family (I'll be part of the 3rd generation who has done this.)

Neil