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Home Builders offering incentives on SC Coast

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Special deals aim to pick up sales among wary buyers in shaky market
By JENNY BURNS
jeburns@thesunnews.com

MYRTLE BEACH — Big builders, taking cues from the auto industry to sell their oversupply of homes, are offering big incentives along the S.C. coast.
Buyers can get 4.25 percent financing, no payments until 2007 or free homeowners association fees for a year.
The deals are aimed at making cautious buyers during this real estate slowdown take the plunge and buy.
“(National builders) are seeing sales falling in general, seeing cancellation rates pick up, and they’re using the incentives to help drive sales and use it to sell inventory that they didn’t plan on having,” said Todd Vencil, analyst for BB&T Capital Markets, who covers eight publicly traded home builders.
For consumers, the payoff is in lower monthly payments and less upfront cash to get into a new home.
While incentives are normal, Vencil said this summer’s incentives go beyond the typical appliance upgrade and free closing.
“They’ve clearly picked up,” he said.
One example is Centex Homes, the Grand Strand’s largest builder. The company is offering 4.25 percent financing with an adjustable rate mortgage. On a $150,000 home, that would make monthly payments about $738 before insurance and taxes are figured in.
That rate is only on spec homes that close by Oct. 31 in most Centex neighborhoods, said Ken Balogh, Myrtle Beach division president.
For a 30-year fixed mortgage, that rate jumps to 6.5 percent.
Balogh said Centex wants to take rates down to last year’s level to help buyers fight rising rates.
The builder is seeing an uptick in cancellations compared with last year, especially in condos, he said.
Builders also are looking at ways to ease the pain of skyrocketing insurance rates along the Grand Strand.
For instance, Centex is paying homeowners association fees between $3,000 and $9,000 in most of its condo and town home projects.
Some Strand condo complexes have seen double and triple increases in their fees because of insurance hikes.
“We can’t fix the insurance challenges but we can help our customers to overcome a year or two of that increase,” Balogh said.
Builders aren’t saying how long they’ll be touting incentives, but analysts expect the enticements to stick around a while.
Jenny Burns is a reporter for The (Myrtle Beach) Sun News, a McClatchy newspaper.

posted by jkballentine @ 7:21 AM