Arizona home builders finally come up with a good idea! What were the odds?
I expect Arizona home builders to act like relocation companies when they own resale property. They will lower a home’s price aggressively until it sells.
That will, unfortunately, push the Arizona home overbuilders’ inventory problems onto the resale market further pressuring resale home prices.
(I mean it was a good idea for the overbuilders.)
{ 6 comments… read them below or add one }
Stan 05.27.07 at 9:05 am
It’s a good idea for many reasons and it’s not a new idea. In fact its has many decades of history. I doubt enough people will take advantage of it to further hurt the resale market.
John L. Wake - Realtor 05.27.07 at 11:33 am
Yes, and new sales are what? 15% of total home sales? A small fraction of those will use the trade-in program so the downward pressure on resale home prices is not likely to be significant… but I’m not sure.
Russ 05.27.07 at 12:42 pm
It is kind of a nutty idea in the sense that it reminds me of broke people rolling over debt from one car loan to another. They are upside down and the combined new loan makes the situation worse. One way or another, the builders will pay less than the current resale value, either directly or by raising the cost of the spec house. For the builder offering 90% of appraisal value, that would be from the appraiser who works for the builder.
Anyone who parrots the “I won’t give my house away” nonsense deserves their coming economic obsolesence.
Ken44 05.27.07 at 6:31 pm
–For the builder offering 90% of appraisal value, that would be from the appraiser who works for the builder.–
There it is.
Ken44 05.27.07 at 7:00 pm
Hope for stability in housing market grows fainter
http://www.azcentral.com/arizonarepublic/business/articles/0527biz-catherine0527.html
Looks like it`s going to continue to be a very cold year in Phx for a lot of sellers.
John L. Wake - Realtor 05.27.07 at 10:08 pm
I think RL Brown had already written off 2007 as a possible rebound year for new home sales. 2008 seems to be the general consensus now.
Last autumn and early winter I thought resale prices might rebound in 2007. Now, I’ve written off 2007 as a rebound year for resale homes. I’m thinking 2008 or later.