Here in the Daytona Beach Market many of the builders have drastically reduced prices of their new homes to reduce inventory.It sometimes makes it very difficult for a homeowner to compete with them when trying to sell their own home.I recently had a listing appointment with a customer who had a lovely 1800 sq ft home[living area] whoi wanted me to list it for $269,000.A year and a half ago it would have been in the $270,000-$280,000 range.Despite showing him the area comps and the newspaper headlines he was very difficult to budge from his preconceived price. Finally I asked him to take a ride with me.We drove 4 blocks to a new housing developement that I was familiar with. I then showed him 2 brand new 30000 sq ft homes for $233,000 dollars.It blew his mind, as it initially did mine, but this "listing tool' finally convinced him of our market conditions. This home would ,under normal market conditions sell for about $330,000. I immediately got a $40,000 price reduction ,His home does have some features the new one doesn't and he's hoping for a quick sale so he can buy one of the homes I showed him.
This is one instance where the builders "giveaway' price actually helped.