Builders struggling? What is really the solution? (Cary: real estate, foreclosures) - Raleigh, Durham, Chapel Hill, Cary - North Carolina (NC) -The Triangle Area - City-Data Forum

3muskateers · 01-09-2009, 02:28 PM

In the Cary Times today there was an article regarding the positions builders are in, and the fact they are requesting incentives from the govt to help them out and hopefully stimulate buyers? I realize it is a difficult time, but my question is why don't they reduce their prices? I am not saying to reduce by much, even 3%?

Buyers are scared to buy...it really doesn't matter how low the rates go, although it is helpful, people buying do not have the money they had two years ago when these home were sited and being built. Alot of the Cary and surrounding area real estate boom came from the equity that the people moving here had from their home in other parts of the country...The buyers do not have that equity anymore, and unfortunately cannot buy these house. No incentive package is going to change that. It is sad, but true. Most of those buyers had to reduce their properties by much more than 3%.

I see the same houses sitting and sitting and yet the on-site realtor just go on about how nice the upgrades are. People are careful not to over purchase and are going to walk away.

We are currently "FANTASTIC" buyers, but have been turned down by over zealous on-site agents that keep claiming their builder is doing great and has "no worries"...yet the 6 vacant house have been sitting for months and some years...go figure?

We are now searching for a preowned.

Any thoughts?

bobbis · 01-09-2009, 02:36 PM

What?

tony23 · 01-09-2009, 02:48 PM

Are you asking what is the solution for the builders who are struggling, or the solution for you looking to buy a house?

If the former, IMO, stop building. If there are 50,000 houses and 40,000 families, 10,000 houses are going to remain unsold, no matter what you want.

If the latter, then I would suggest stop looking at new homes. Really - think about it - even if you DO manage to get a new home in one of those developments, do you WANT to live in a mostly vacant, or unfinished, neighborhood?

sneezecake · 01-09-2009, 02:50 PM

The government DID give the builders an incentive, albeit indirectly...they gave first-time buyers a 7500 tax credit, and by bailing out FM/FM and buying mortgage-backed securities, they single-handedly knocked mortgage rates from 6.5% down to 5% or lower. That right there is instant help. It may not be enough, but it's more helpful than giving each homebuilder a check for $1mm.

chuckreis · 01-09-2009, 03:02 PM

The easy solution is that the builders that cannot survive should go away. Those that can survive, should keep doing business. It's really wonderful how capitalism should work. Maybe if some of them loose out this time, during the next boom they will be more careful with over extending themselves. If you give the home builders a handout they will not learn their lesson.

As for cutting the prices of their homes, I disagree with that. One of the things that can destroy an area is a fire sale. 6 houses sell for $100K in a $200K neighborhood and you destroy home values and make the houses attractive to slum lords.

Charlton Dude · 01-09-2009, 03:09 PM

1) Our neighborhood IS still selling and for a pretty penny.

2) The government should do absolutely nothing. The government trying to manipulate the housing market by force feeding homes to people is exactly what caused this problem. The last thing we need is more of that. Just let it play out. But it doesn't matter. That's not what is going to happen. Haven't you heard? The government is the cure to all our problems, so we are going to print an endless supply of cash and spend it everywhere. Ya, that's it. That will work. Bury our children under an ocean of debt to make us feel better now.

Stepping off soapbox now.

3muskateers · 01-09-2009, 03:10 PM

No, I am in now way claiming that they lower their price to hurt the neighborhood, but if you offer 94% of the asking price and the on-site agent is offended, and the builder doesn't even counter....well then that is "crazy" Plus, I still think that some of the homes were overpriced in the first place, the land in alot of the developments have either "high tension wires" "highway (540)" "trains" "small lots" etc...

Beermat · 01-09-2009, 03:11 PM

Quote:

Originally Posted by 3muskateers

In the Cary Times today there was an article regarding the positions builders are in, and the fact they are requesting incentives from the govt to help them out and hopefully stimulate buyers? I realize it is a difficult time, but my question is why don't they reduce their prices? I am not saying to reduce by much, even 3%?

Buyers are scared to buy...it really doesn't matter how low the rates go, although it is helpful, people buying do not have the money they had two years ago when these home were sited and being built. Alot of the Cary and surrounding area real estate boom came from the equity that the people moving here had from their home in other parts of the country...The buyers do not have that equity anymore, and unfortunately cannot buy these house. No incentive package is going to change that. It is sad, but true. Most of those buyers had to reduce their properties by much more than 3%.

I see the same houses sitting and sitting and yet the on-site realtor just go on about how nice the upgrades are. People are careful not to over purchase and are going to walk away.

We are currently "FANTASTIC" buyers, but have been turned down by over zealous on-site agents that keep claiming their builder is doing great and has "no worries"...yet the 6 vacant house have been sitting for months and some years...go figure?

We are now searching for a preowned.

Any thoughts?

It's called greed on the Builder's side and you should bide your time as sooner or later they will realise their folly and lower their prices to reflect the market conditions. You need to be careful not to appear too keen on any particular house as that will improve your negotiating position considerably

geoff2v · 01-09-2009, 03:27 PM

I'm not sure there's a big solution. One solution for getting construction types working is to provide infrastructure work, and that's going to be a part of any stimulus package. While that helps the workers, it doesn't directly help the builders. The core of the problem is that housing prices went up too high too fast, and they've just got to come down. I don't think steps to reinflate the housing market (lower rates to 4.5%, for example) are a good thing, though I think finding out ways to slow down foreclosures can be helpful. None of that will help those empty houses in a new subdivision sell, though. (Directly, of course; putting people to work and getting money in their pockets will help the economy more generally.)

3muskateers · 01-09-2009, 04:03 PM

I agree with you completely! The housing market prices went up too fast...Due to the flood of people moving in from the Northeast. The builders thought these New Englanders had tons of equity to spend! Well the equity is no longer and the builders need to lower their prices.