The first move they usually make is to redo the specs, cut costs in conjuntion with price cuts. I’ve seen it in past cycles and last week I visited development that had opened and had abysmal sales initially and was cutting specs and prices. It doesn’t require any plan or permit changes because all of the changes are on the inside. The builder I visited is dropping everything it was including(granite, stainless steel, nice fixtures, wiring, nice cabinet choicess). They make them as cheap as they can and slash the hell out of the price in order to go after a different client pool and it seems to be working for them. Another strategy that Lennar took was to include every option imaginable for free. It’s still all smoke and mirrors, One way they cut prices 100k but by cutting the specs the real cut is only 50k, the other way it looks like you get 100k in freebies but it only costs them 50K.

Regarding the fear of them throwing in condos or small houses, I don’t know if that will be the trend, the starter homes generally attract a larger sub prime/ alt a clientele, not really what they want to be chasing right now.