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Home builders' 'buy now' message rings true

For people scalped by the real estate market the past couple of years, few promotional campaigns grate more than the Never Been a Better Time to Buy mantra.

(Never better? For a few frenzied months in 2004 and 2005, you could have bought a house for zero money down and flipped it painlessly for a profit of $50,000. That's assuredly better.)

Leaving that aside, it's harder to scoff at the latest pitch by the Tampa Bay Builders Association. Yes, builders are once again reassuring us it's a good time to mortgage our future on a pile of concrete, shingles and 2 by 4s.

But I think they've got most of the facts on their side this time. They were shared at Thursday's roundtable at the Tampa headquarters of the Tampa Bay Builders Association. About a half dozen builders were there, ranging from Arthur Rutenberg Homes president Bobby Lyons and Taylor Morrison division president Michael Storey to Pulte Homes' Reed Williams and Standard Pacific Homes regional president David Pelletz.

Builders face obvious pressure to sell. As a group, the industry has lost billions of dollars. Sales are less than half of what they were during the 2005 peak. But at the same time, they can drop prices only so low.

Rising material costs, from the concrete in the slab to the diesel in the dump truck, are partly absorbed by customers. Local governments charge more than $10,000 in impact fees per home to pay for roads, schools and sewer lines.

Executives from the likes of Pulte, Standard Pacific and Taylor Morrison admit prices could dip further this year from an average of about $200,000. But not by much. And while procrastinators may save $15,000 waiting six months, they could lose that amount to interest rates that a chorus of economists insist must rise to stem inflation.

Is the message getting out to the roughly 20 percent of Florida buyers who prefer a new home? Pulte and Standard Pacific report sales about 25 percent higher than they were last year. Sales of smaller homes have led the way.

Builders insist home buying is becoming less the cold economic speculation of a commodities hustler.

Said Pulte's Williams: "The emotions of buying a home are back."

Home builders' 'buy now' message rings true 08/21/08 [Last modified: Monday, August 25, 2008 3:19pm]
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