Home Prices Being Slashed
October 30, 2007
There has been a lot of bad news lately about the current housing market and the future of the market as well. Some of this dire news is securely rooted in the sub-prime market and the effect that adjustable rate mortgages will have once they begin to reset. However, another issue in the housing market is the glut of inventory currently available.
Some of the nation’s biggest home builders are all but slugging it out with each other as they try to attract buyers. This means lower prices for those who able to buy. In many areas, home prices are being virtually slashed in order to bring buyers to the closing table.
An example of how builders are doing this comes from Hovnanian Enterprises which is one of the nation’s biggest home builders. In what they termed the Deal of the Century, a three day sales campaign, they sold over 2000 homes. What made the campaign so successful, however, was that they cut prices by up to 30 percent. The company may have lost some of its profits on the homes that were discounted but home buyers certainly benefited.
This is not the only home building company looking to offload some of its inventory. Companies across the US are working hard to sell what they have before the market becomes even more volatile. In some areas, builders are selling “at cost” or even below.
In addition to lower prices, many home builders are also offering incentives. These incentives might include paying a portion of the closing cost or paying the taxes on the property.