Struggling to Close Out Those Last Homes in a Community?

National Public Radio (NPR.org) the other day told the story about a California homebuilder who’s had enough with holding inventory in an ever-stagnating economy and decided to take a rather drastic action — placing their final new construction homes up for auction during a one day sale.

According to Mike Davin, president of CataList Homes, who the builder, Cal Coast Development, worked with to liquidate inventory, 18 of 24 homes offered sold in 38 minutes at an average of 87% of the last list price. Similar strategies have been taken in Portland, Oregon, Scottsdale, Arizona and Omaha, Nebraska. Of note, most builders or agents are claiming that bidding frenzy is bringing them prices close to their desired selling price.

So we gave this tactic some thought — after reading what one might think is yet another doom-and-gloom indicator of the housing bust — and came up with a strategy for you homebuilders and real estate professionals to consider to capitalize on the buzz and excitement that this rather radical decision seems to have created.

Homebuilder Bankruptcies: Scaring Buyers, But a Builder’s Opportunity

I must be listening to too much NPR these days — that or their reporting too much on the homebuilding industry’s woes! A recent spot on the radio (listen here and see a summary) hit a bit too hard to home. It was a story that originated here in Chicagoland about some of our larger homebuilders that were going bankrupt or having dire financial problems.

The gist of the story was that buyers of new construction homes were nervous to purchase from some of the larger builders as many were either going out of business or drastically curtailing their business. The story told the tale of one family who drove past their half constructed home, only to hear their newly installed furnace furiously pumping heated air through all of the open windows spaces — the actual windows were never installed!