Quote:
Originally Posted by Papa_lecki
Another post that the Developer is not going to survive.
First, the developer bought most of the land when rates were at 2 or 3%.
Second, construction efficiently have led to lower construction costs (i.e. the pre fab concrete walls).
Third, if the developer didn’t model a threshold for an increase in interest rates, I would be shocked.
The developer controls the inventory of new homes, if they want more inventory, they put more on market.
Much of the pre owned inventory are flippers, who are out of the 1 year window, and waited til interest rates dropped a bit.
|
Where did I say the Developer is not going to survive? I said, he has quite a bit of inventory and will have to make choices. None of the choices will affect his wallet sufficiently. The choices he makes will most likely affect buyers'wallets.
Will he continue to drop prices on homes? Great! Buyers save money!
Will he sell off some of his land? Or, build on it differently? Great! Pre-owned home prices will go up! And/or, buyers will have new and different types of homes to choose from.
Will he slow the pace of construction? Not so great.This may force workers to leave the area. And, finding companies interested in commercial use will be difficult.
I named the three things the developer could do with his inventory. Slash prices, rethink his future plans, or slow the pace of construction. The only other option is to raise prices.(He made that decision. It didn't go well. I cannot see him choosing this avenue, again. Or, not soon ) I believe it is best to wait and observe what route he chooses. Again, everyone has different situations. Do what you believe is best for you. Me? I do not have a problem with waiting a few months.