Reply to The bifurcation of the housing market - new home price collapse, existing homes stable value

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[quote=Anonymous][quote=Anonymous]Builders need to sell. Homeowners don’t. [/quote]

It's this. It costs builders money to sit on a bunch of empty homes while buyers are scared off by rates, so they have no choice but to lower prices and offer incentives unless they want to sit on this units for a year or more until rates come down (if they do). Developers have a cycle for new builds and the rate increase has greatly increased it, which means they are losing money waiting for homes to sell, which reduces the capital they have for future projects.

I bet if you could separate the sales of second and third homes from primary residences, you'd see the same thing. When someone decides to sell a home they don't currently live in, they usually can't just let it sit for months and months waiting for someone willing to pay asking, as they pay taxes and utilities and any borrower costs in the meantime. Whereas if you live in the home you are selling, you can hold out for "make me move" money unless you have some other compelling reason to sell.[/quote]

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