Things are Playing into the Buyers' Hands More Each Day

Article from the Toronto Star this morning about the large declines in new-home starts. They use a Pickering town-home builder as an example of the struggles that new-home builders are facing right now. Here are some of the highlights:

Roof caves in on housing starts

CMHC forecasts a 22% drop in Ontario this year as global credit crunch takes toll on home builders

If time had been on Murray Koebel's side, there would be 45 new homes built on his Pickering site by this summer. But when he opened his sales office seven months ago, he was just in time for the credit crunch in October that dramatically stalled the market for home builders in
North America. "I don't think this is necessarily even about price – it's about confidence. People are just nervous to buy when you have all this bad news," said Koebel, a veteran builder who has been developing homes since 1981.

Grim outlook for the new home starts

According to a forecast released yesterday by the Canada Mortgage and Housing Corp., housing starts in Ontario are expected to drop by more than 22 per cent this year, to 58,250 units, before rebounding by 1.9 per cent in 2010. Koebel is all too representative of those numbers. He expected to finish work on his site this year, but because of slow sales, has pushed his Steeple Hill development back to 2010. Over the past year, he has dropped the price of his homes three times, in $10,000 increments, and offered incentives such as hardwood upgrades and appliances.

and that sad Pickering builder struggles to get financing...

Koebel said if he started selling a year earlier, he would have been sold out by now. So far, he has sold six of the 45 units. He figures he needs to sell between 10 to 15 units before he obtains bank financing.

Read the entire article in our Forums.