Building On Spec

This is a good sign that builders are starting to take on some risk but only if they get them sold.  Hopefully they aren’t being too optimistic and rates stay low because low rates and home affordability is what is selling homes more than the tax credit.

There seem to be some good deals out there on the newer homes and you are taking on the hidden costs like you are with short sales and foreclosures. 

“The strategy is risky. If the buyers don’t materialize, builders could be saddled with unsold homes that will require heavy discounting to sell, hurting profits and slowing the housing recovery. New homes may also continue to lose market share to lower-priced foreclosed houses. Indeed, some economists expect an avalanche of foreclosures in the months ahead as lenders release homes they have been keeping off the market.”