U.S. Contractors Adapt to Selling In Slowing Housing Market

The foundation is in and workers have begun framing a new home in U.S. It’s a 1,400-square-foot cape with a base price of $204,000, roughly $50,000 below the median home price in County.

That price point is no accident. The builderhad initially planned "move-up" homes, with garages, paved driveways, gas fireplaces and other extras that would sell for $270,000 or so. But as the housing market slowed and potential customers had trouble selling existing homes, the builder redesigned the project to make it more affordable for first-time homebuyers. The strategy is working. Five of the 20 homes in the first phase went under contract quickly.

Cutting amenities is one way homebuilders are weathering the national downturn. They’re also offering buyer incentives, writing contracts contingent on the sale of existing homes and lowering prices. Some are staying away from price segments already burdened with too many "for sale" signs.

Builders such say these adjustments really just reflect a correction, a return to a more-stable construction environment after a few hectic years. But housing-start figures show that the brakes have come on fairly hard.