D.C.: Facing Weaker Home Sales, Builders Sweeten Deals

[WhiteTara]

http://www.washingtonpost.com/wp-dyn/content/article/2005/12/30/AR2005123001481.html

Home builders around the region are luring would-be buyers with freebies worth thousands of dollars, in an attempt to prop up sales in a slowing real estate market.

Pulte Homes Inc. is offering a 42-inch television, free heat for six months or a $5,000 check for window coverings to some buyers. Ryan Homes will finish the basement free. NVHomes will throw in a golf club membership in some developments.

"Incentives are definitely on the rise," said Kenneth Wenhold of real estate research firm MetroStudy. He estimated that since July, when the market began to soften, buyer traffic at new-home projects has fallen off 30 percent and so have contracts. "With all the inventory, buyers now have more choices."

<snip>

In the Washington area, incentives can amount to as much as 5 percent of the sales price, according to Daniel Oppenheim, an analyst with Banc of America Securities. One problem for builders, he said: Investors who bought recently are reselling to cash out.

"All of a sudden the new-home builder is not only competing with the resale market but with the exact same home they just completed," Wenhold said.

...more...

Ruh-roh...

[hang a left]

1. There is a condo conversion in the city I live that is giving away

a 2006 Nissan Pathfinder with every condo purchased. The place is a dump though. It used to be an apartment complex right on a major street.

[bleedingheart]

2. I predicted this would happen...1200 new homes went up

in our area...in a very short period of time. Now people who lived in homes they paid $280k for ...are asking $400k for the same home just 2 years later....and I have to say I don't feel the least bit sad for them as they have to keep dropping the price. Hell one guy in the neighborhood down the street is doing this...and he built a new home already...so he is carrying TWO mortgages on homes in the same community because he though the first one would be his "investment" that would pay for the second home he purchased...now he will be lucky to keep either one.

[HockeyMom]

3. House down the street from us

Hi Ranch in good condition, 3 bedrooms, 2 baths, half basement, not much property. Sold in a matter of WEEKS in May for $375,000. Apparently, the deal fell through and now the house has been on the market since June. The owners moved out two weeks ago. It appears empty, but I guess they will probably try to rent it until it sells.

This is for a house UNDER $400,000 on Long Island which not too long ago was considered a BARGAIN. Now, I guess not.

I am also now seeing more private house rentals that are including ALL UTILITIES in the rents. These people must have moved and cannot sell these homes, so they have to sweeten the pot for the renters (plus pay the mortgage), given the sky high costs of utilities.

[bleedingheart]

5. I just cringe at the number of foreclosures that will occur....

there are a lot of people who got caught in the fever and will now end up deeply in debt...

[LibDemAlways]

11. The market is long overdue for

a correction. Homes in Southern CA that sold new in the 380-450K range in the late 90's are now on the market for over a million. Here's an example:

http://www.realtor.com/FindHome/HomeListing.asp?snum=2&locallnk=yes&frm=byzip&mnbed=0&mnbath=0&mnprice=900000&mxprice=99999999&js=off&pgnum=1&fid=so&mnsqft=&mls=xmls&areaid=91377&typ=1%2C+2%2C+4&poe=realtor&zp=91377&sbint=&vtsort=&sid=05E931811253C&snumxlid=1051408012&lnksrc=00002

Note that the realtor is showing a picture of the nicely landscaped backyard rather than the unimpressive front of this 2770 sq. foot tract house which is built a few feet from the next door neighbor.

This home has been listed for months and the price keeps coming down. Still no takers. I know a couple who bought a similar house for 1.5 million last August. Their mortgage is 1.35 million, and needless to say they already owe more than the place is worth. Sometimes the desire to keep up with the Joneses gets in the way of common sense.

[gizmo1979]

4. It's gonna be a rough year at work

I work in a housing related industry.We've been going hog wild for 2 years it started slowing down in OCT. and hasn't picked up yet.We knew it wouldn't last forever.

[progressivebydesign]

6. Wait till Spring.

Uncertainty about gas prices and heating costs, the recent interest rate rise, low consumer confidence (which has rebounded since the gas prices went down), emotional aftermath of Katrina, and crappy weather, have all contributed to the slower market. 2005 is STILL above past years for home sales... and I beleive that come springtime, the market will perk up again. I wouldn't list my house during the late fall/winter months unless I was desperate. No one wants to move over the holidays. The rising interest rates calmed the market down a little, but according to the experts, there is no bubble burst.

I know that's a disappointment to the people here on DU with their hateful attitude toward people who have nice homes... I know they wish that everyone making over minimum wage and living in their parent's basement will lose their homes and savings, but.. alas.. not going to happen. (In all my years here at DU I have yet to figure out the envy and hate for people with nice homes and good jobs).

[Journeyman]

8. I certainly hope you're right. . .

I've no desire to see the housing market slow, let alone collapse. And like you, I don't understand the hopeful anticipation so many here on DU have for a burst of the housing bubble. It's as though they have no concept whatsoever of the impact such a development would have on their own lives.

[maryallen]

10. Talk about gross generalizations ...

How many members are there at DU?
80,000?
What percentage are "hateful toward people who have nice homes?"
20% ?
51% ?
75% ?
90% ?

But it's ok to just generally cast aspersions on all these people???

WHO'S HATEFUL?

Tell me again ...

[4dsc]

7. Big house, BIG heating bill

My brother lives in a big house that's he now trying to sell. He stated it may take a year to sell it(he's at least realistic). But the kicker is he claimed his heating bills DOUBLED from last year.. And he's only receive one so far this year..

I suspect that larger homes will become harder to sell once this heating season is over as any prospective home buyer will want to see previous heating costs before they buy. Seeing large heating bills will not be good for selling any home for sure!!

The era of cheap oil is over!!

[cliss]

9. Gerald Celente, future prognosticator says that

in the next few years, people will be moving away from McMansions and large cars to smaller homes and smaller cars.

The thrust will be towards more energy efficiency and a less complicated lifestyle. The reason: Oil and natural gas will keep going up in price. People will be forced to think smaller.

Soon, we're going to see large sections of McMansion neighborhoods with every other house for sale. They'll be like ghost towns.