To a buyer, $10,000 usually won’t make or brake a deal. To the builder, it gives the impression that prices are increasing – “get in before you’re priced out!”
I do know from inside sources that some builders put sold signs on houses in their developments to give the appearance that the product is moving.
A price increase can be another tactic. If someone who has been looking at 4S for a while (going once a month to see if there are more price drops) sees that prices have now changed course, then this could scare some people into buying. I actually think it is a decent tactic that many people would fall for… They’re hope is to scare the people who have “fallen in love” with their homes – as we’ve heard before, NEVER fall in love with a home.
As jeeman stated, he’s checking prices, but he isn’t “in love.” I laugh on the inside when I hear the same crap in south Orange County. I actually know some executives for a big public builder in Irvine. They’re budgeting for 15% price decreases over the next year – what they think is a worst case. If it comes to it, they’ll be able to drop 15% and still make a profit – albeit a slimmer one. I’ve been tracking some new developments in Talega (a “master planned” community in San Clemente). I recently saw a house that was priced at 1.6 million in February currently listed for 1.1 million as of three weeks ago. Still over priced? Yes, but not a bad adjustment – 1.6 was pre subprime implosion, and 1.1 is the current price. I haven’t checked back to see if it has sold.
