I attended a great meeting this week at our local realtor association, Suburban West Realtors Association. It is titled Starbucks Mornings and there are always different angles from blogging, to marketing etc. This month it was a roundtable discussion with some local builders, Wayne Megill, Joe Mingioni and Mike Murphy.
We talked about a lot of topics which I will post over the next few days but we started out with a question about how these builders see the current market. I apologise now for not making notes about who said what, but the thoughts and comments really flowed and it was very interesting. Foreclosure rates in the Philadelphia Suburbs have remained even, there has not been an increase in foreclosed homes in the region over past years. However, the market is being affected by the lack of financing available to customers. Our region has not been affected like Michigan and other states by lack of jobs, this area has a strong job base over a variety of industries which is bringing increased numbers of customers to the area.
Whilst large national builders pull in their horns during these times smaller, local builders have made out alright generally, that is not to say they are not offering large incentives to buyers to do a deal. These builders say the are seeing new developments tough to get started as buyers are unwilling to be the first to buy in a new development that may take a lot longer to sell than previously. Developments at all prices have seen a drop in sales and visitors, especially over the summer, but some of the hardest hit are starter homes where buyers are finding it hard to get credit because they don't have down payments, lower credit scores and other credit issues.
55+ communities which a lot of builders have tried to build in the area recently are some of the hardest hit, with manybuilders trying to unload to others whole developments. These buyers are not buying as quickly as before, some taking 3-4 months to make a buying decision rather than the 2-3 weeks it used to take. There seems to be no incentive in the buyer to make the move. Many of the amenities these developments are offering are available in their current communities, swimming at the Y, golf can be played locally and lawns can be mown by a lawn service. Also many of these buyers have seen their finances reduced due to recent stock market downturns so there seems to be a big fear of commitment as buyers can keep their lifestyle without making the move.
So this implies if you are in the market, or thinking of buying that builders will be willing to do a deal that they may not have last year. Builders also are unemotionally attached to these homes, unlike a homeowner, it is a simple business decision for them; are they making a profit or not.