From the Allentown Morning Call:
Builders give buyers a break
By Beth W. Orenstein
To move cars at the end of the 2005 model year, Ford, General Motors and Chrysler offered some buyers the same discounts they offer their employees. One area homebuilder, Heritage Homes Group of Jamison, recently started a similar incentive program to spur sales of its homes.
Since mid-September, Heritage has offered ”employee pricing plus,” which entitles homebuyers to the same discounts its employees would get if they were to buy a home in one of its developments: $25,000 worth of options for free if they buy a single family home and $10,000 in options if they buy a town house. The program applies to all its developments, including The Manors and Carriage Court at Highgate, a mix of single family and town houses, in Upper Macungie Township.
The builder incentive program is a sign of the times.
When the new home market was at a fever pitch — as it had been for at least three years — builders needed to do little to attract buyers. They could build home after home and offer them at take-it-or-leave-it prices, and they would sell. However, when the new-home market slows, as it has since the middle of last year, that is no longer a case.
”The day of people running at you and saying, ‘Please take my check,’ is over,” says Sharon Sheldon, the real estate agent for the Elliott Group’s CloverView Estates in Lower Saucon Township, a development of 14 luxury homes on 2 to 5 acre sites that sell for more than $800,000.
That’s why more and more, builders are offering incentives such as low-rate financing, free upgrades and special promotions. Some are even cutting asking prices.
Survey: Rising Rates Worry Homeowners
1]about one in seven respondents had an adjustable-rate mortgage.
2] 80% of homeowners with adjustable-rate mortgages are “concerned” about rising interest rates.
3]10% homeowners expect their properties to appreciate a lot. 53% a little. 24% see flat.
4] Younger homeowners see thier house as a good “investment”.
5]72% that the equity in their home was their most important investment
6]Margin of error 3%.
http://biz.yahoo.com/ap/061030/homeowner_survey.html?.v=2
hey v,
does the survey trouble you as much as it does me?
metro,
In my opinion,
1]optimist evaluation, it’s going to be a recession.
2]”Home prices always goes up crowd” (10%) will however be the first to get hit.
Where not to buy
(at least for the next year or so)
At a glance: Projected drop in median home prices
Stockton, CA – 9.7%
Merced, CA – 8.9%
Reno/Sparks, NV – 8.9%
Fresno, CA – 7.9%
Vallejo/Fairfield, CA – 7.8%
Las Vegas, NV – 7.1%
Bakersfield, CA – 6.6%
Sacramento, CA – 6.4%
Washington, D.C. – 6.3%
Tucson, AZ – 6.2%
http://money.cnn.com/popups/2006/biz2/newrules_wherenot/6.html
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This is the minimum drop main stream media is ready to admit, for now.
Personal Income, Spending, Savings Rate and PCE due out at 8:30.
jb
Plase note we already have 3.9% correction in the north east!
Interestingly, Buisness 2.0 listed “The Jersey Shore” as a place where prices will go down but never put a percentage on the decline. Freefall i guess!
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http://money.cnn.com/popups/2006/biz2/newrules_wherenot/3.html
The Jersey Shore
Atlantic City, Ocean City
Prices here soared as Philadelphia commuters bid for condos against second-home buyers from across the Eastern Seaboard. But the latter group usually tries to get out from under mortgage No. 2 when interest rates start climbing.
jb,
Do you happen to know what Otteau was prediciting last fall?
15-20% – they are getting to 305+, slowly but surely :)
Thanks
not 305 … 30+%
HI have an idea on how to sell new homes – how about building smaller/cheaper houses??? no granith countertops, fancy bathroon – if I need it I can put it in myself….
Hey, has anyone else heard of this new builder incentive called Pictured Home, my builder offers this service. Pictured Home is going to take digital 360 pictures of my new home during the entire construction process. I can log into my own personal account at picturedhome.com to view the photos.
Other cool things are you can store information about your home’s flooring, paint color, trim work on the website. I have two kids and I am constantly painting spots where they write on the walls with their crayons. Now I can store the manufacturer and color code of the paint, so I can find it easily at my hardware store.
Also, Pictured Home can capture an entire inventory of your home’s valuables for insurance purposes. A couple years ago, my home was flooded and I had to replace my big screen TV but I lost the receipt and didn’t have a photo of the TV. I fought with my insurance company for months to get them to cover the cost of the TV.
I’ll post an update when I receive my first set of photos.