Builders definitely have gone wild with incentives! It's the end of the year. For some of them, their financial situations have forced them to take the high road. The consequences of not having consistent cash flow is dire.
Debt-to-backlog. Having debt that is a higher multiple of backlog (the dollar amount of outstanding orders for homes) is troublesome. Consider that the amount of cash for paying down debt is going to be a fraction of the backlog.
Debt-to-market cap. A measure of the amount of financial leverage.
via Seeking Alpha
Problems with builders financial conditions is opportunity for buyers, especially those year-end close-out deals. They are usually "the best deals" in town.
Hovnanian's has the most aggressive pricing that I know of. They're willing to go that far, because desperately need the cash to survive! In comparison to other builders, HOV is in the top two builders with high debt leverage [chart above]. Here is the community where they have 'Name Your Price' condo $ales. A 1 BR condo previously for $374,290 can be had for you for - how much?.. Whatever you think it's worth.
Click on image to enlarge it
OTHER CLOSE-OUT DEALS in the PIPELINE
KSI aka Kettler (Alexandria, Reston, Shirlington, Lorton, Bethesda, and Largo)
I will post more year-end close-out deals as new information coming along.
As a word of precaution, make sure before you go out there and be blinded with all kinds of 'incentives,' come prepare with your market analysis. So, you know pricing on the market. It counts. And builders know it, too. They just don't want you to know about it.
Disclosure: No cash exchange hands for posting this on my blog. The only time I earn my broker's fee is when buyer/s decided to use my expertise to represent them in a sales transaction. A builder sales representative don't represent 'your interest.' She/he represents the seller [builder]. If you want to hire a Realtor, here is the Virginia Agency form to help you differentiate between seller and buyer representation.
