The Real Deal New York

Builders in a bind with excess inventory

November 21, 2007 12:38PM

U.S. home builders with excess inventory are facing a dilemma: if they cut prices — on top of offering incentives — buyers come to expect further reductions; if they don’t cut prices, they fear buyers will turn to competitors for better deals. Still, 60 percent of builders slashed prices in October, according to the National Association of Home Builders, with reportedly mixed results. California-based Meritage Homes Corp. has reduced prices by as much as 40 percent. Luxury builder Toll Brothers and Pulte Homes Inc., the nation’s third-largest builder, have shunned price cuts altogether.

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