Buy my house and get a new car or vacation
| • | Hawai'i Real Estate Report |
By Noelle Knox
USA Today
The proportion of home builders who are dangling goodies to buyers — from free swimming pools to granite kitchen counters to vacations — is the highest in at least seven years. The reason was made vividly clear yesterday, when the Commerce Department said new-home sales fell a sharp 3 percent from May to June.
The sales decline, the first since February, is expected to worsen in coming months, making life harder for those with "for sale" signs in their yards. That's because the number of new homes for sale is up 25 percent from last year, while the number of existing homes on the market also has soared.
To drive sales, 75 percent of builders are now offering some kind of incentives to attract buyers, up from 50 percent who did so last year, according to the National Association of Home Builders. "These builder-developers understand the solution to the slowdown to the market is to quickly liquidate their inventory," says Ron Peltier, CEO of HomeServices of America.
Builders typically prefer offering free upgrades rather than cutting prices, which can hurt resale values for their customers who bought in the same communities.
Now the incentive war among builders is spilling into the market for existing homes. In what may be a nascent trend, a few homeowners are starting to lure buyers with the promise of exotic trips, new cars and higher commissions for their agents.
"We needed to do something different from our competition," says Findly, a marketing director. "Honestly, this kind of thing has got to be done if people want to sell their homes. Doing typical open houses every weekend, relying on your Realtor to do everything, isn't going to work any more."
"On top of that, (the sellers) usually have to sprinkle in some money to help with closing costs," Hiatt says.
Now it's back on the market for $439,000. And there's a new car in the driveway, with a sign: "2006 Corolla Free with Purchase of our Beautiful Home."
"You have to do something to stand out," says their agent, Barbara Tivnan. "There's so much inventory, and there's just not that many buyers."
