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Daily Real Estate News | September 25, 2007
Builders Clear Out Inventory With Splashy Campaigns
Experts say home builders are anxious to unload excess inventory, considering analysts predictions that housing supply could rise even higher as more subprime borrowers enter foreclosure.
While many builders are offering free plasma televisions or low fixed interest rates, luxury builder Hovnanian recently went as far as reducing home prices by upwards of $100,000 through a mix of discounts and other incentives.
Builders have been hesitant to slash prices for fear of upsetting early buyers in their developments who paid much more for their units. But National Association of Home Builders vice president of research Gopal Ahluwalia expects more builders to offer substantial price discounts like Hovnanian, whose "Deal of the Century" campaign resulted in 2,100-plus sales.
Experts urge builders to take steps to move inventory now. They predict that as discounts increase, more builders will adopt such strategies.
Some builders are selling a large number of units at once via auction. In eastern Pennsylvania, Max Spann Real Estate & Auction Co. sold 11 new town houses for about $350,000 apiece. Meanwhile, Florida accounts for around 20 percent of the more than 1,400 homes listed on the online auction site eBay.
Source: Investor's Business Daily, Scott Stoodard (09/24/07)
© Copyright 2007 Information Inc.
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