The News Press reported yesterday that Bonita Springs based WCI Communities had a rough 4th quarter. They got over 270 orders, but, they got over 260 cancellations or homes back into the system. At a net sales ratio of 10+ it will take a while for them to get rid of the inventory they have. Remember earlier posts about how building permits are only now at they lowest levels, homes already in the pipe line are still coming out of the ground and homes that are contracted for and cancelled are now being added back in. This is on top of the almost 15,000 homes in the resale market.
Other builders are facing the same problems. I think this will lead to even deeper discounts and incentives from the builders. Great news for buyers, bad for sellers. Some builders who are not as deeply entrenched as WCI, Centex and others may fair better. Ryland and DR Horton come to the market later and may not have as much build up of inventory as ones that have been in the market longer.
Michael Polly, Vice President, Denny Grimes and Company serving Fort Myers, Cape Coral and Lee County
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