With the current economy the way it is, and I'm not saying it's all bad, especially in the Charlotte region, the greatest difficulty we are having, isn't finding buyers for our product, but finding buyers for theirs.
We are doing well on the traffic side, and getting interested, qualified buyers, but they all need to sell the home they have first. This is presenting a new alternative to our builders, and that is people interested in trading up.
At Park Creek, our custom homes run from about $525,000 to $675,000. These are the new home prices, with some resales coming in slightly lower. We currently have seven inventory homes for sell, and several of those have seen interested buyers with homes they need to sell.
Once last year, one of our builders made a deal on trade with a prospective buyer. Their home was smaller, and deemed an investment opportunity for rental property by the builder, and the sell was completed. Now this year, we find that this is a growing concept for some move up buyers.
With first time buyers finding it a little more difficult to obtain financing due to down payment requirements and so on, starter home owners are finding it harder to sell what they have in hopes of moving up to a larger, nicer home. On the positive side however, this trend is feeding the rental market, which is actually doing well in the area, thereby providing some incentive to builders looking to sell a higher priced home, on a trade for one with a lower mortgage, and better rentability.
It really works as a win for everyone as far as I can see. Now obviously it would be dependant on the condition, style, location, size, and price of the trade, but for a builder, it could potentially put some money in their pocket, reduce their overall debt, create a potential income stream, and show activity in the neighborhood. We'll see if this growing interest really pays off.
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