When I see reductions like this, I begin to suspect we may see, over the next year or so, the ultimate “fire sale” on new development homes that must be completed and sold. Auctions, perhaps?
Common sense (yeah, I know…scary) says big builders won’t hold vacant homes indefinitely in a flat, stagnant, or declining market. At some point, they’ll cut their losses and sell them. Again, I see auctions coming for excess inventory.
When will this happen, is the question, though? With credit constraints and a return to tighter lending standards most likely near, potential buyers may be a small lot, indeed.
