Home Builders Using 'Car Dealer' Tactics To Dump Unsold Inventory

In the Washington, DC area, The Washington Post reports:

• When the housing market began to weaken, builders responded with incentives such as money toward closing costs and low-interest loans through their mortgage arms, but they did so without cutting their base prices. Faced with a glut of unsold homes and canceled contracts, builders are now turning to tactics typical of car dealerships and department stores. What's even more unusual is that the deals are often accompanied by deep price cuts, which builders had been reluctant to do up until now. "It's a little odd thinking of homes being sold that way," said Dean Baker, co-director of the Center for Economic and Policy Research in the District. "You think of a sale for coffee or laundry detergent, but not really for a home."

For more, see Car Dealer Tactics on the New-Home Lot (To Sell in a Slow Market, Builders Slash Prices and Offer Financing Deals).

For a related story, see 'Betrayed by our builder' (San Jose Mercury News - 10-8-07), a story on a Northern California builder's intention to auction off brand new homes in one subdivision at "closeout" prices to unload its inventory. Current subdivision owners (former customers) who bought from builder at "full price" are up in arms.