Developing.... 48%???? So, half of all people who signed a contract to buy a home have changed their mind. That is simply amazing. http://today.reuters.com/news/artic...199_RTRIDST_0_KB-RESULTS-URGENT.XML&type=qcna CHICAGO, Feb 13 (Reuters) - KB Home (KBH.N: Quote, Profile , Research) posted a quarterly net loss on on Tuesday as it took $343.3 million of pretax land-related charges, a consequence of the U.S. housing market downturn, and said its cancellation rate rose to 48 percent. KB Home reported a net loss of $49.6 million, or 64 cents per share, for the fiscal fourth quarter ended Nov. 30, compared with net income of $304.4 million, or $3.44 per share, a year earlier.
its either walk away from their deposit at this point in time or close on a house/condo you will not be able to sell for quite sometime. Their change of mind is just a business decision. It is time to go talk to some developers. Seeing that they will keep a 5-20% deposit on something they dont want to own themselves is a recipe for a nice buying opportunity for a longer time hold...obviously using the OLDTRADER buying at a deep discount mentality....you might be able to pick up an entire floor for the price of one condo..
It is unbelievable. Really. What other business in the world has one half of their customers sign a contract to buy a product that costs 6 figures, and then back out?
It's pretty easy: find the industry where they'll let you flip and keep all of the upside and only $3k-$10k of downside and you'll find 0% cancellation rates go to near 100% cancellation rates in a period of months. Also look for industries where they'll let you control an $300k asset for a non refundable 1-2% deposit. The hard thing to ponder is how it could have ended any other way.
Wouldn't you cancel a contract on a $300K condo if your next door neighbor signed his for $250K or less?? Most builders will allow this out of good faith and to avoid possible legal issues. The real question is whether the 48% cancelled and resigned at a lower sales price or whether they outright killed the deal. The latter would be mean an incredible amount of inventory remaining on their books and an opportunity for the long term buyer to finally be able to negotiate on the ridiculously priced homes.
That's not what it says, and I don't believe you are correct. I believe that 48% of people who signed contracts to buy homes from KB canceled their purchase in 4Q.
I should not have said anything, this was the start of a thread where one could have learned a lot about the posters.