How To Sell Property Really, Really Fast
Fort Worth-based D.R. Horton Inc., one of America’s largest homebuilders, has had a hard year. Revenues dropped from $2.8 billion to $1.71 billion, home closings fell 36% and cancellation rates stayed at 44%. And they are not alone. Builders across America are running into similar hard times.
According to the Commerce Department, housing starts in January were at their lowest level in 17 years. Just over 1 million new homes were started in January, up 0.8% from one month prior, but down 28% from one year prior. Builders have offered all sorts of incentives to pique buyers’ interest, including discounts deep enough to anger surrounding homeowners who paid full price only to see their home value drop like a rock.
D.R. Horton is no different, except maybe in marketing tactics. The company’s recent “unauction” offered “auction-level pricing without all the hassle.” The tactic, also commonly referred to as a “firesale,” offered discounts of up to 50%, more than $300,000 in many cases. These are in about two dozen developments in southern California, a notoriously pricey real estate market. Well, obviously, response was overwhelming, with a line of buyers camped out in sleeping bags in the cold. According to the Outstanding Investment blog, this is the first of many such sales as builders look to cut their losses and boost their capital. What a boon for first-time homebuyers!
