Helpful Real Estate Blog

I think that each situation either connected with the economic events or with the life as a whole has its advantages and drawbacks. While one gains another loses. Thus due to the growing home inventory and slowdown trends many of the real-estate markets in a matter of few months have become buyer’s markets. Buyers dictate rules of the game and make home builders to acquire refinement in selling vacant dwellings. Construction organisations have to offer rebates, big discounts and different creative incentives (such as trips, cars, sprees, etc.) to attract potential buyers.

One the most obvious case of the aforesaid is North Port (the Southwest Florida housing market). Thus, in front of Allstate Builders model homes on Lovette Road buyers can see the freshly buffed 1980 Corvette of Gary Grennell, the sales manager for Allstate Builders, which he offers passerby to win. They can also see giant balloons, the colorful banners and the hot dog vendor there, attracting their attention to the 20 homes. Besides of this Gary Grennell puts together the “circus’’ every weekend and says that “these days, you got to do the work to get them to see your product.”

And what is the most painful for the home-sellers but the most pleasant for homebuyers that keen-witted Garry is not alone in offering creative incentives. Among the most common incentives are $10,000 in free upgrades, $20,000 buyer’s bonus, homes starting below $200,000, a chance to win a trip to Bermuda, a $10,000 gift card to a Rooms To Go furniture store, free moving expenses, an eight-night hotel stay or a shopping spree at Wal-Mart.

I consider this example as a proof of fickleness and riskiness of the real-estate market and assure once more time that investment in realty (especially with the intention to earning money instead of saving them) requires consultation and assistance of a good specialist. If only a year ago North Port’s builders had a customers on waiting lists because the city was issuing more than 350 permits a month (in comparison with just 88 permits in April this year and 74 permits in May this year) and building firms couldn’t build fast enough, today’s situation is characterized with the decreased number of customers excessive supply.

In accordance with the local builders downturn in the Southwest Florida housing market was caused by investors who bought up houses in times of housing boom with the intention of flipping them instead of using as resident homes.

According to the investigation implemented by the National Association of Realtors almost 40 percent (or 3.34 million) of the homes and condominiums bought last year nationwide were bought by people who had little or no intention of living in them.

Activity of house-flippers motivated construction firms to increase building. All this has resulted in superfluous home inventory and put home-builders in difficult situation compelling them to reach out in new ways to attract buyers and move their stalled inventory. Thus, according to the estimation of some real-estate specialists approximately 5,000 homes are offered for sale in the city today. Among them more than 1,400 homes are listed for sale with real-estate agents and the rest are for sale by house-owners and builders. These homes are sitting at the market for a long time before moving to buyers.

As the Florida Home Builders Association points out the only other area in Florida where builders are trying to attract customers with such incentives is Orlando. With the softening of local real-estate market home-builders around Orlando begun to raffle off Mini Cooper cars, furniture packages and vacation getaways. The situation at the housing market is similar to that in the North Port. If for a long time builders couldn’t build fast enough to accommodate the sales, today’s Orlando’s market is glutted with dwellings.
 
 But as some members of the Florida Home Builders Association stand out “builders statewide are remaining optimistic and are not anticipating layoffs”. Builders express their confidence in moving extra inventory in the near future. Moreover they have a lot of reconstruction and rebuilding work due to the two years of recording-breaking hurricane seasons.

I suppose that Southwest Florida housing market illustrated quite well how scanty supplies of homes turn into excessive supply due to the activity of house-flippers, behavior of customers, natural calamities and other factors.

This entry was posted on Monday, July 17th, 2006 at 12:22 pm and is filed under Real estate market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.