The residential real estate market is making gains as sales increase in many areas. We have witnessed this as we have sold out of our finished home inventory in several communities and we are starting to see many of our communities enter into presale agreements to build homes for delivery in 2010. While pre-sales are just beginning to pick up, this is an important indicator in terms of economic recovery, along with the stronger home sales. This is all good news for homebuilders, and it�s important to take note of what the return to pre-sales could mean for the real estate economy as well as the factors that are attracting buyers to pre-sales.
Factors that are attracting buyers include the desire to take advantage of current construction and financing costs, which are at their lowest in years, along with the $8,000 Federal tax credit for first-time buyers. We have also been able to offer buyers low interest rates through our lenders. Buyers have taken a “wait and see” approach, and in the recent past, some have gotten lower prices on homes that may have been overpriced to begin with. However, others have found that the home they thought would drop in price has since sold, leaving them with the sense that they should have moved more quickly. As a result, we are increasing the number of homes we start construction on each month and are experiencing a rise in requests for presale homes.