Builders Cut Back on Incentives
Home builders are cutting back on the freebies they’ve been tacking on new homes for the last couple of years to woo buyers.
The reason is simple: Demand is almost back in sync with supply. According to Jeffrey Laverty, analyst with research firm Oscar Gruss & Son, new-home inventory has declined from 12.4 months in January to 7.3 in August, close to the six-month mark considered standard.
While eliminating incentives like free cars and free pools, some builders are continuing to offer to pay points on mortgages and discounts on upgrades—“Incentives that make sense,” says Laura VanVelthoven, Hovnanian's corporate vice president of marketing and sales.
Source: The Wall Street Journal, Dawn Wotapka (10/05/2009)