Homebuilders get desperate as the hot market cools and mortgage interest rates rise making market hungry for buyers.
The industry is counting on incentives to boost sales like offering free vacations, free home upgrades or huge discounts.
Homebuyers are now taking advantage of these incentives as the market slows down. Homebuyers in Dallas are able to get $100,000 in price cuts, vacations to places like Lake Tahoe and free home upgrades like media cabinets.
For builders, this isn’t good news. This September, new home purchases fell to their lowest since December of 2016. The sale of previously owned homes also dropped for a sixth straight month, the worst since 2014.
Rising wages may help the housing market as starter homes are still in demand.
There are still strong smaller markets, which are in an affordable market like in places like Columbus, Ohio and Grand Rapids, Mich.
In places like Seattle where home prices since 2012 have doubled, builders are incentivizing customers to buy down on mortgage rates. This means they will pay a lower interest rate. Builders didn’t need to do this before but in once pronounced markets, this is becoming more prevalent.
Take a look at Frisco, Texas. Once populated with cow pastures, it’s now full of narrowly spaced villas.
The population has almost doubled in the past decade, with an 8 percent jump this last year making it the fastest-growing city in America.
Realtors are taking a smaller piece of the pie on sales, sellers are taking a large cut off of the advertised price of their home.
Buyers are also weary, with many watching mortgage rates and stocks.
Where do you think all of this going? Are you willing to take a risk in the market and purchase your new home at a discount, or are you going to ride to wave and wait?
Market Hungry For Buyers
Sonia Rina Landry is a passionate entrepreneur, speaker, author, and personal development coach. She is an outspoken advocate of the free market economy and has helped countless clients identify their core values, envision and realize goals that resonate with those values. She oversees several businesses online and offline.