Homebuilders Offer Freebies as Booming U.S. Markets Cool
By Prashant Gopal Oct 7, 2014 11:48 AM ET
Joseph Beben wasn’t in the market for a house until he heard about a year-old community in suburban Phoenix where 10 homebuilders are offering buyers incentives such as swimming pools, built-in barbecues and subsidized mortgage rates.
Beben, a 33-year-old general manager at Best Buy Co. (BBY), visited three of the sales offices flanking the main corridor of The Bridges at Gilbert, whose 17 subdivisions are among the about 200 locally that have opened since early last year. He settled on Woodside Homes’ community within The Bridges after the builder agreed to cover as much as $10,000 of his closing costs, and throw in another extra he liked.
“When I saw this deal, it looked like a good business decision,” said Beben, who will pay $332,000 for a 3,000-square-foot (280-square-meter) house scheduled to be completed by February. “And I wanted a pool.”
Builders in Phoenix and areas from Sacramento, California, to Orlando, Florida, are sweetening offers as sales slow in some of the country’s most volatile housing markets. Buyers, suffering from sticker shock after large price gains in 2013, are pulling back after the U.S. government cut the maximum size for mortgages with low down payments. In Phoenix, the Federal Housing Administration’s loan limits dropped well below the median price for a new home.
Market ‘Rocked’
Nationwide, new-home sales have been uneven, dropping in June before rising in July and August. The shares of publicly traded homebuilders have fallen 7.9 percent this year, compared with a 6.3 percent increase in the Standard & Poor’s 500 Index.
http://www.bloomberg.com/news/2014-10-07/homebuilders-offer-freebies-as-booming-u-s-markets-cool.html