With foreclosures still saturating the market and homebuyer demand remaining tepid, local developers and homebuilders are increasingly offering incentives and using other tactics to sell their new houses and condominium units.
Buyers in the Tampa Real Estate Market are in a great position to buy New Construction because the builders are competing with incentives and they have the ability to close quickly. Short sales have deterred buyers who want to purchase but are getting frustrated waiting. Being able to close quick is a huge advantage in buying something new. Not to mention builder warranties and sometimes even lower interest rates by using a builder’s lender.
Lennar recently offered units at its River Terrace Condominiums at River Strand project for $1,000 or less per month, with financing starting as low as 3.5 percent – about two percentage points below prevailing mortgage rates. The Miami-based builder also included free golf and tennis memberships with each unit sold.
During the second quarter, Lennar’s sales incentives averaged $52,000 per house and those houses were about 12 percent smaller on average, the company said in its quarterly earnings report last month.
A National Association of Home Builders survey released last month found homes started in 2009’s first quarter averaged 2,335 square feet, nearly 300 square feet less than a year earlier.
“That’s the first time that’s happened since 1973,” said Stephen Melman, the association’s director of economic services.
The trend likely will continue for the foreseeable future, as six in 10 builders the trade group surveyed in May said they planned to build smaller houses in the coming year. Only 1 percent said they’re going bigger.
But few expect the downsizing trend to continue after the housing market recovers. The builder association projects home sizes will stabilize around 2,500 feet in the next five years, or about the same as in 2007.
Pat Neal of Neal Communities credits smaller homes and low introductory prices with making the first half of 2009 among his company’s best in 40 years. But he also doubts the downsizing trend will last.
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