Builders in the Sacramento, Calif., region are responding to the softer housing market by offering buyers enticing incentives to close deals, a move that industry analysts say could spread to other locations across the country.

Greg Paquin, president of the housing analyst company the Gregory Group in Folsom, Calif., says builder incentives range from $20,000 to $40,000. The perks include carpeting and granite countertops or goodies such as a wired sound system, plasma TV, a trip to Hawaii, or even a free swimming pool. Hanley Wood Market Intelligence concurs with Paquin's analysis but released data that puts the incentives in the $10,000 to $70,000 range.

Paquin cautions that most of the sizable incentives were on homes that were about ready to close and may have been canceled at the last minute or are located on undesirable lots.

“Back in the spring of 2005, builders weren't putting incentives on those types of properties, the market was so hot,” says Paquin. “We think it is a sign of the softening of the market,” he says, adding that “price points have peaked, interest rates are increasing, cancellation rates are up, and investors are either not buying or trying to sell.''

Other markets across the country have slowed, but builders in markets such as Washington and Charleston, S.C., haven't resorted to incentives.

“Things have slowed down,” says Bill Luther, president of Gemcraft Homes in Forest Hill, Md. “We didn't raise prices for the last three months of the year,” he explains, adding that he hopes the industry doesn't panic.

“If builders start giving away the store, then home buyers will wait and see if they will cut prices more,” Luther concludes.

Steve Kendrick, owner of Structures Building Co. in Mt. Pleasant, S.C., says he hasn't heard of any builders in the Charleston region offering incentives.

Learn more about markets featured in this article: Charleston, SC.