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Are Developers
Reducing Prices?
“I’VE
READ ABOUT SOME DEVELOPERS OFFERING SUCH THINGS AS COUNTRY CLUB
MEMBERSHIPS OR PLASMA TV’S IN ORDER TO LURE POTENTIAL BUYERS, BUT WHAT
ABOUT PRICE CUTS? ARE DEVELOPERS REDUCING PRICES AT ALL?”
Although it’s not a widespread practice,
some developers have begun taking the fairly radical step of lowering list
prices on unsold inventory, especially in the condominium and townhome
markets. Just like private sellers, developers have been hit by the recent
market slowdown and are finding that other incentives—such as pre-paid
closing costs, free amenity upgrades, etc.—aren’t attracting enough
buyers. For the most part, the developers who are offering price
reductions are doing so only in specific developments where excess unsold
units are becoming a financial burden to them. Fortunately for buyers,
these developers are taking an “offer/counteroffer” approach to moving
unsold units—an idea that was unheard of during the recent housing boom in
the last few years. However, be forewarned: reduced prices will ultimately
bite into a developer’s bottom line and thus these reductions will not be
around long. Once the level of unsold inventory begins to adjust downward,
the window for price cuts may close abruptly. If you’re looking to buy
soon and want to get a good deal on a new home, your real estate agent can
steer you in the right direction. ∆ |
