Remember when IT companies reported in 2000 that orders just fell off the cliff (right when they had maxed out production to meet demand)?
Same story this bubble. So much inventory coming on line around the country, at the exact wrong time.
Here's Sacramento. Absolutely amazing numbers. Anyone who bought in 2005 is absolutely screwed. Anyone buying today because of incentives will be equally screwed. Like buying Cisco when it dropped 10%. It's a long, long, long way down.
Sales of new houses fall 57%
Region's builders try to lure buyers with lower prices and free upgrades.
Sales of new homes in the Sacramento region plunged 57 percent in the last three months of 2005, forcing builders to offer buyers sweeter deals.
The incentives include paying off fees for roads, thousands of dollars toward granite countertops and other upgrades, and the option to make no mortgage payments for six months or more.
In some cases, builders are simply lowering their prices. For example, KB Home, one of the region's largest builders, recently cut prices on many homes 3 to 5 percent to stoke sales, said Jefferey Fautt, the builder's local division president.
"Sacramento has always been a nice, affordable market, and our prices just got a little too aggressive," said housing analyst Greg Paquin, whose Folsom firm, the Gregory Group, collected the data.
"So there are some price adjustments in some (areas) right now."
January 13, 2006
Posted by blogger at 1/13/2006