D.r. Horton Issues Mass Warning. (cancellations Spike 18%)

[Bob Ipock]

Builders out here are giving as high as 6% in closing costs, incentives etc.

Whatever it takes to sell the house. Pretty much the same for existing homes, if you want to sell you have to come up with some incentives.

 

[Bob Ipock]

 

[Bob Ipock]

 

[Sadie]

The builder used to not reduce the price but added more incentives, now i see developments where they are doing both and the people who purchased in the past year are screwed

I agree on that, but most of the prices I see were way to high to begin with. No way was the market supporting that wish/asking price even before tarrifs.

 

[Zoe]

Builders have always given incentives, except in extraordinary times. Upgrading the appliances, carpet, etc. Add landscaping whatever. Or credit to closing.

I have no problem with that but the fence on this new construction is in the contract. I am doing it "subject to".

I either have to count it as a seller concession or do it subject to. Lender can put it in escrow. Lender can say we put $10,000 in escrow and still close the loan.

I decided on subject to. Lender can handle the escrow end.

 

[Sadie]

The builder used to not reduce the price but added more incentives, now i see developments where they are doing both and the people who purchased in the past year are screwed

What I am seeing is the builders priced their homes way above last year’s prices and are having to scale back to last year’s prices or a little above. At least where I am working. But every markets different.

 

[Zoe]

I don't know how much money D R Horton owes but they could be in trouble. Especially if Federal Reserve Bank bumps the Fed Funds borrowing rate. People with certifcates of deposit in a bank will be happy if Fed bumps the Fed funds rate because they will get higher interest on their certificate of deposits. People with any kind of interest bearing deposit account would be happy because they would earn more money in interest.

It will hurt things like car loans and credit card loans, personal loans.

D R Horton may have to do a flash sale if they have a bunch of inventory. But many of their homes have a preconstruction contract on them before the house is even built or completed. In other words, by the time the house is completed it is already sold before it is completed. I don't think they do a ton of spec houses. They have a buyer and build them quick. They want the buyer to be able to pick out the finish on the house.

 

[Joe Flacco]

DR Horton recently sold houses nearby for $1.5M to $1.9M. They are not bad for the price. Big houses but basic construction and finishes.

 

[Joe Flacco]

Matrix

These are probably the nicest homes they build. Upper end of Q4.