Builders offering trades on resale homes

The article, Builders move homes by taking trade-ins, from the Arizona Republic, reports that builders frustrated by customers canceling deals are coming up with aggressive ways to keep them. Some are offering trade-in programs, while others are giving sales guarantees on existing homes. It's a switch from their traditional role in the house deal: building and then selling them. Now, builders are taking a more active role in clearing the way for buyers to purchase their homes. The new programs are driven by a drop in new-home orders and soaring cancellation rates that have left many builders with an excess of unsold homes. Cancellations shot from 1 percent in January 2005, the midst of the housing boom, to nearly 29 percent in March, according to Hanley Wood Market Intelligence, a real estate and new-home construction consulting firm in California. Although some companies are seeing an improvement over last year, cancellations were still running high the first quarter of 2007. At Scottsdale-based Meritage Homes, cancellations stood at 28 percent. At KB Home, it was 31 percent. Pulte Homes lost 25 percent of the sales to cancellations in its Southwest division, which includes Arizona. Valley housing analyst RL Brown said a 15 percent rate is an acceptable industry standard.
http://www.azcentral.com/business/articles/0523tradein0517.html

Realistic prices help ailing home market

Realistic prices help ailing home market


Buyers and sellers; A gradual meeting of the minds
The difference between what homeowners are listing their houses for and what buyers are willing to pay is narrowing. It’s a new sign the Valley’s housing market is stabilizing.

Here’s your sign……..

Indicators that will signal a housing-market rebound:

· The gap between sales prices and listing prices will shrink
· Home listings will steadily start to fall each month until they are down by at least 20 percent.
· The time it takes homes to sell will drop from the current three-month average to a more normal two-month time frame.
· The number of monthly home sales climbs back to levels from 2003 before the market frenzy.
· Home prices go back to increasing 5 to 7 percent a year as they did before 2004.


“Both buyers and sellers are readjusting their expectations,” said University of Arizona economist Marshall Vest. “Buyers are coming back into the market with reasonable offers. More homeowners are pricing their homes to sell.”
Vest analyzed data from the Arizona Regional Multiple Listing service and found that the spread between what Valley home prices sold for in March and what they were listed for is the narrowest it has been since mid-2004. The gap hit a high in mid-2005.






Notes from an article in the Arizona Republic May 14, 2007
By Catherine Reagor