From Rick Palacios: Home builder commentary from our survey this month was about as negative as I’ve seen to date. Here’s some of the market color that jumped out…
Oklahoma City builder: “Biggest challenge is your customers who just closed their home and see you drop prices by $30,000.”
Jacksonville builder: “Buying land at the top of the market and having to pull every incentive lever to sell is not a recipe for success. We’ll cut starts ~60% to 70% in 2023.”
Boston builder: “October was exceptionally weak.”
Harrisburg builder: “October was the worst sales month in 12 years. No buyers, no sales.”
Baltimore builder: “The market is terrible.”
Birmingham builder: “The market is weakening demonstrably.”
Wilmington builder: “The market is falling off a cliff.”
Phoenix builder: “October started strong, then there was a head fake and in the last two weeks things dramatically worsened.”
Denver builder: “Preparing for a very sluggish 2023 with increasing incentives and price erosion, driven mostly by the need to buy down interest rates.”
Austin builder: “Cancellations spiked again in the second half of October.”
Dallas builder: “Traffic has completely dried up. We’re spending considerable dollars keeping backlog in place and closing.”
Houston builder: “Anticipating 2023 being off 40% or more from pre-pandemic 2019, and 2019 was a typical standard year for us.”