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I would suspect that for a small builder it would be more important to "stay in business" than just to fold up your tent and move on. Reason being,a business needs to be in the business of "being in business". There are crews you have put together. People that you have employed and trained you don't want to lose. Contacts in the industry you don't want to lose. And, land that you might have bought some time back that you need to develope or____________?
Once you give that all up, and perhaps the only business you know is developing, what do you do now?
It's not just the "little guy". So what's happening in the above case in Harrisburg, or what was going to happen is that the builder (Lennar) sold houses in the 400K range in this community and now just so they can keep building, they are wanting to switch gears and build houses inthe same community for $200K.
I say good for the residents of the community for fighting back! You've got to protect your property values at all costs
Yes I have to agree with that story in the Observer. They are selling my same home for $234K and I paid $289k just a year ago. That's almost a 25% decrease. Putting the nail in the coffin: They are no longer building my model in the community anymore!!!!!
Yes I have to agree with that story in the Observer. They are selling my same home for $234K and I paid $289k just a year ago. That's almost a 25% decrease. Putting the nail in the coffin: They are no longer building my model in the community anymore!!!!!
Now their homes are starting at 199K..
And this is going on in many areas - and is of great concern to those who bought in a subdivision expecting/believing that things would progress as outlined on the sales material.
In a way, it is like breaking faith w/ the folks who built the first homes in the subdivision. They bought a package deal - a vision for their neighborhood - and now they feel betrayed. I would definitely feel betrayed!!!!
But yeah - as John said - it is a way for the builders to stay in business. And if you can't sell anything but homes under $200,000 - that's gonna be where the contractors go.
This country is going thru/ a very discouraging transition as wages go down and lenders tighten the grip on mortgage lending.
Lower end models or different builders coming in are basically the norm now....
Builders are looking for "anything" to sell to potential buyers....
This is one of the potential pitfalls of building a home in an area w/new construction. (vs an established neighborhood). We all knew that this could happen...its just no one expected it would in a million years.
Lesson is never treat the unlikely as impossible.....
Lower end models or different builders coming in are basically the norm now....
Builders are looking for "anything" to sell to potential buyers....
This is one of the potential pitfalls of building a home in an area w/new construction. (vs an established neighborhood). We all knew that this could happen...its just no one expected it would in a million years.
Lesson is never treat the unlikely as impossible.....
I knew it could and most likely would happen. You have seen me continually advise newcomers to consider older, established neighborhoods w/ re-sales and mature landscaping. I have never recommended new subdivisions to anyone as I don't trust that development will stay consistent. Since 1985, I have only bought in a new subdivision if I could get in on the last homes in the last phase - for this very reason.
I have seen it happen back in the early 80s when there was another recession that laid off construction workers and made getting a mortgage very difficult. We had 13% mortgages back then and people were going for bargain basement homes. If you didn't have 20% down, you didn't get a mortgage, period. If you look around the Charlotte area, you will find that most of the homes built in the 80s were built in 1985 or later. The rates started going down in 1985. I would love to be able to pull up real estate stats from 1982,83,84. It would tell a story, I am sure.
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