It is happening in Maryland with builders reducing the price of options by half.

My concern would be buying a home in a partially finished subdivision. There have been numerous cases of builders disappearing leaving half finished houses, roads incomplete, clubhouses not built, etc. I would also make sure you get all lien releases. I am always hesitant to do business with anyone who is desperate.

It's happening in our area as well....but sue makes some very valid points. One subdivision in particular in our area, the builder built 6 spec homes,and the sub division has probably over 100 empty lots. Those spec homes were auctioned off by the builder for a fraction of what they were originally listed for. The status of the rest of the sub division is questionable at best.

Another area of concern if the builder(s) skip is...what eventually gets built on the now empty lots? I've seen many a subdivision where this has happened & new builders coming in reduce the size & quality of the homes so that those who purchased when the subdivision was new & paid, as example only, $500K...are now immediate neighbors to a $250K house.

There's an 8 lot subdivision near me now where that exact scenario is happening. The builder got two homes up & had trouble selling them in this market. They eventually sold in the mid-$700Ks & "For Sale" signs went up on the remaining lots. Now, foundations are being poured on a couple of the other lots that are about half the size of those first two houses. Easy to see what's happened...new builder buys a couple of the sites at a reduced price because Builder #1 had to unload to clear his loans...Builder #2 has a lower cost base so can afford to build less expensive homes on the sites. My guess is that those first two purchasers who paid $700K+ are not very happy right about now.

In this market, I'd be very cautious about purchasing into a subdivision that wasn't almost built-out.

/tricia

Covenants and Restrictions, as much as I hate them, should keep the 250K and 500K side by side scenario from happening. Most places in Charlotte have sq footage requirements as well.

This development has three builders and a couple hundred homes occupied. But their next phase (about 60 lots) isn't started yet.

bdpeck-charlotte: "Covenants and Restrictions, as much as I hate them, should keep the 250K and 500K side by side scenario from happening. Most places in Charlotte have sq footage requirements as well."

Not in our township in NJ. As a matter of fact, there is a dislike here for oversized homes. That said, IMO, the powers that be would be happy to grant a variance from the initial site plan approval if it meant a smaller footprint...as that is environmentally better due to less impervious coverage.

Even in areas that DO have restrictionsÂÂÂif they are faced with a deserted building siteÂÂ..or relaxing some rules...IMO, they will opt to relax the rules in order to get the site finished.

It is best to realize that what may have been the case under normal circumstances has more than likely changed quite a bit due to the credit squeeze...

That said, assume nothing, and think twice before buying into a troubled development....because what you see may not be what you will get in the end.

I think restrictions in larger developments might see changes to the initial approved site plan to accomodate smaller homes..In small subdivisions, 10 homes or less, i think it is less likely...In the township i previously lived, all new construction,had to "conform" to the existing neighborhood...It had to be aesthically in line with the rest of homes..

qdognj, during times of market stress my experience has been the opposite. Small projects are always prone to modification.

/tricia

I am shopping for a home on Long Island, New York. I have three floor plans in front of me for new builds. Each of them has had their price dropped several times. Drops were in approximately $25K increments. The final prices at the moment are $50K to as much as $100K off original asking price in 2007. Yep, that's $100K. If we decide to make an offer, it will be 10% - 15% less than the sticker price currently in front of me now. I've looked at a few existing LI homes that have dropped the asking price more than $100K and are going on two years on the market. Major pricing correction occurring in some parts of the country, but not all.

Among all the other concerns with builder's finaicial stability in this market, you have to consider that as soon as you sign the papers, again in some markets - not all, your new home could immediately start to lose value. The markets will likely come back, real estate always has. But who the heck knows how much it will come back and how fast.

Have to really do your homework and make the absolute best deal that you can right now. I'd go for dollars off the sales price or getting builder to help lower int. pts. Incentives are nice, but...

On the flipside I was also looking in Spokane, WA for a while. Their market is very healthy and they are having no problems finding buyers. Spokane and nearby ID areas are up about 7% and it was clear to me when I was shopping Spokane that there was not going to be much wiggle room in making offers in that area of the country.