Builder's incentives for prospective buyers are tapering off as the new housing market appears to be regaining its strength.
Cindy Jez is Long & Foster's vice president of new homes for the Richmond region. The firm represents properties in 130 communities. "Most of the builders became very price-sensitive," she explains. "Buyers at the end of the day are concerned with the monthly payment, and incentives are often not applicable."
The federal first-time homebuyer tax credit expired in April, and Jez attributes it with getting people back into the market. And she says that the resulting momentum has continued.
Vernon McClure, Main Street Home's owner, says that his incentives are tied to the company's 15th anniversary — $15,000 given toward options or closing costs. To McClure, it's an "incredible time" to buy, with low interest rates and houses priced at 15 percent to 20 percent less than a year ago.
"We've had our best two sales months that we've had in the past five years," says McClure, with 37 homes sold during March and April.
Lloyd Poe, owner of LifeStyle Builders & Developers Inc., believes that the market is stabilizing and beginning to gain strength. "With the house prices reduced to new market realities, the incentives are kind of built into the new prices," Poe says. LifeStyle's incentives vary depending on its neighborhoods.
For three years, Gumenick Properties, which operates throughout the Southeast, has offered a Threshold program for apartment dwellers, which enables them to set aside a portion of their rent for closing costs on a new Gumenick home. About 25 renters are enrolled. From March to May of 2009, the firm operated a No Worries program that paid a homeowner's mortgage for the first six months, as well as closing costs and association fees.
"From where we sit, we think the market is getting better," says Gumenick spokesman Ed Crews. The company had more sales in 2010's first quarter than it had since the first quarter of 2006, despite the snows. The firm plans to build 30 Craftsman-style houses at Patterson Avenue and Maybeury Drive in Henrico but won't break ground until 12 sales are completed.
"The sweet spot for houses in the Richmond market right now is $275,000 up to $325,000," Crews says. The new community's houses are between 1,550 and 1,900 square feet. Currently, 11 buyers are interested in the homes. "The market is telling us this is the place to be," Crews says.