Home builders throw in price cuts, incentives

[NVMojo]

October 27, 2006

WASHINGTON "" After offering incentives ranging from fancy kitchen upgrades to free swimming pools to move a glut of unsold homes, builders finally decided they needed to get serious about cutting prices.

The result was the biggest decline in median new home prices in 35 years. And analysts are predicting more price cuts to come for both new and existing homes as sellers deal with near-record levels of unsold dwellings.

The Commerce Department reported Thursday that the median price for a new home sold in September was $217,100, a decline of 9.7 percent from September 2005.

That was the lowest median home price in two years and the sharpest year-over-year decline since December 1970, providing dramatic evidence of the slowdown in the once-booming housing market.

The latest new home statistics available for Washoe County showed sales of new homes fell 30.5 percent in Washoe County, to 660, during the second quarter ended June 30 compared with 2005's second quarter, according to a report by Reno-based Real Estate Marketing Network Inc., which tracks new homes sales in the area. The company does not track the median price.

The median price is the middle point, where half sell for more and half sell for less.

The price decline for new homes followed a report Wednesday that prices in the much bigger existing home sales market also dropped on a year-over-year basis in September by 2.5 percent, the largest decline in records going back nearly four decades.

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