Seattle Bubble

Yesterday’s Tacoma News Tribune had an article about new construction in outlying areas, which is becoming front line of the Puget Sound housing bust. In short: it ain’t pretty for builders.

Facing fewer buyers and many, many homes for sale, South Sound builders are pulling back and getting extra promotional.

Builders have slowed construction schedules in recent months, cut prices, offered their biggest-ever incentives and even rented out finished homes that couldn’t find a buyer.

…builders are looking to unload even more of what’s built and empty. In March, 1,485 new homes, excluding condos, were listed for sale.

It used to be that half of the homes sold by Soundbuilt, one of the area’s largest builders, were properties with homes either under construction or yet to be built, said Gary Racca, owner of the Puyallup company.

Uncertainty about the economy, however, means consumers are holding off, and now 90 percent of the company’s sales are on ready-to-move-in homes. But completing homes without a committed buyer can be risky, because the builder fronts the cost and often has to secure and pay to finance the construction.

The company has launched a first-time promotion: a price guarantee, which allows someone to buy a not-yet-constructed home at a locked-in price and ensures that if Soundbuilt lowers prices on other similar houses in the subdivision, the buyer will get the same discount.

Of course, they’re still confident that all they need to do is “get the momentum back” with a few discounts and incentives here and there, then they can get back to jacking up the prices.

(Devona Wells, Tacoma News Tribune, 05.04.2008)