Tuesday, July 25, 2006

'Scary' Incentives

From ABC News:

Home builders don't like to talk about it, because it only makes it harder to sell houses. But because of an increase in the number of homes for sale, a majority of builders now offer incentives to close a sale. In Sacramento, Calif., recently, Meritage Homes offered "Zero Closing Costs; Zero Payments for 3 Months." And another firm, Centex, advertised an "Offer You Can't Refuse," which meant up to $125,000 in savings..."I have builders who are advertising right now -- 'make me an offer' -- which is definitely scary," said housing analyst Ivy Zelman.

4 comments:

norcal ray said...

How much are those Centex homes that are $125K off? Have not seen Centex make such offers in the Bay Area yet. Hope they do so soon.

Anonymous said...

When the new home builder starts dropping prices on a new home or begins to accept offers at ridiculous levels, it sets the table for home prices throughout the area. Look out below as the new home builder has high carrying costs and must get rid of his inventory without regard for the rest of the market. Better to losses early than lose more as the inventory sits idle. Another sign would be the condos converting to apartments to take up the slack. This market is ugly and with build out inventory growing its about to get down right grotesque.

tom stone said...

these builders are actually better off finishing and selling projescts at a small loss than they would be walking away from them half completed due to the frontloading of costs for permits,infrastructure,etc.i would sure want to have a competent home inspector check out the home before buying,contractors have been known to cut enough corners to leave spiral shaped homes.when centex offers that 600k home for 250 i'd consider a lowball offer.

drwende said...

Centex is starting a third subdivision in Modesto, as they already own the land -- even though they're offering massive incentives to finish selling the existing two tracts.