Shrinking choices offered in New Constructions?
Major builders from coast to coast are cutting many of their selections and choices to consumers. It cost's money to carry inventory and to keep items on the active list if there is insufficient demand and turnover for them. So when visiting local builders theses days the buyer will have less selections of available floor plans, some have reduced their floorplan choices by as much as 50%. In the area of design amenities builders are not offering as many flooring choices, counter tops, faucets and hardware choices.
Maybe new marketing strategies are in the making. The more common the stock item the quicker it's available for delivery, negotiating price reduction for bulk purchases, reducing construction completion time and reducing mistakes by eliminating variety. Prior to the housing crunch mark-ups and new pricing was as common as every Monday and profit margin were as thick as 25%, but now with the median home price down so are profits for the builder and I am sure cost cuts are being put in place to survive. Some analysts predict this to be the year for more cookie-cutter homes, with a shrinking pool of buyers some builders find this necessary.
There are builders that think this is not the way to go, they plan to offers buyers as many choices and amenities as before the housing crunch, because when somebody spends a half-million dollars on a home purchase, they want it to show. It also makes a buyer more apt to buy now, rather than sit out. The builders' that are keeping their variety options open are also keeping their design centers/studios and have seen an increase in their business.
It remains to be seen, we are not yet into the active months and maybe in the end the buyer will prevail. Indicators are that the builder's offering choices show stock shares going up, while the choice cutters' stock is down.
One thing is for sure, in this industry even big fish can be goobled up if they can't recover their fumble.
