What Buyers' Stalled Decision Means to Homebuilders

While most homebuilders take measures to control cost, such as modifying the plan layouts or building more energy-efficient homes, few revamp their business strategies by creating specialized division for distressed markets.
July 26, 2011, 6am PDT | Jeff Jamawat
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The Economist reports:

"A less common tactic is to intervene directly in local markets. Beazer Homes has set up a 'pre-owned homes' division to buy homes in Phoenix, Arizona, at distressed prices. As well as producing income from renting these out, the programme has the side-benefit of reducing the number of foreclosure signs in specific markets. This can make a big difference to local prices."

For homebuilders, "there was no light at the end of the tunnel. Now there's light, it's just that the tunnel is very long," says Vince Foley of Barclays Capital in the article.

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Published on Thursday, July 21, 2011 in The Economist
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