This week the websites of some the nation's top home builders would do infomercial icon Billy Mays proud.
They're full of flashing countdowns, visually shouting at buyers to hurry and sign a contract to buy before the door closes on the most recent home buying national tax rebate at midnight Friday, April 30.
A "BREAKING NEWS" notice crawls around a flashing box on Lennar's website, with a countdown and a hurry-up message. To sweeten the pot, the company's offering "fixed for life" interest rates at a 5.03% annual rate.
Buyers then are teased into checking their local markets for specific offers. In Central Florida, Lennar is advertising so-called vampire hours, where sales offices will stay open until midnight to draw in the procrastinators and excite inveterate shoppers who love shopping while everybody else is turning in for the night.
KB Home launched a similar promotion last weekend in a number of markets, including Dallas and Southern California, calling it a “moonlight madness” event. However, Hovnanian's Delmarva division, which builds in Delaware, Maryland, and Virginia, took a slightly different take on a weekend blowout, urging buyers to avoid missing the boat with its 72-hour sales event.
Other builders, cognizant that the tax rebate won't help a buyer come up with the cash to buy today, are offering to match the tax breaks with cash that can be used for everything from interest rate buy-downs to closing costs.
Beazer Homes, for example, is offering to match up to $8,000 in tax credits. However, there are fine print caveats: "Valid only on select Beazer Homes. Savings vary per home, plan, and community. Pricing, features, and availability subject to change without notice. Additional restrictions may apply. See New Home Counselor for complete details."
There were similar strings attached to M/I Homes' tax credit madness events in Orlando and Tampa, Fla., and Raleigh, N.C., which promised "7 days of insane deals." Rolled up in the special deal are a 4.25% interest rate and all closing costs and prepay fees paid. However, the deal only applied to conventional 30-year mortgages with a 20% down payment. Moreover, buyers must have a minimum credit score of 720 and apply for the loan within 24 hours of signing a sales contract.
Tax credit matching programs are a popular incentive for a number of big builders. Standard Pacific Homes, for example, offers to match the federal tax break in some markets with "flex money" that can be used for closing counts, buying down interest costs, or options. In select markets like Houston, Taylor Morrison is advertising $8,000 off available inventory homes.
While some of Ryland Homes' divisions--Denver, for example--are working a tax credit match program, other divisions are taking the idea one step further. The company's Indianapolis division, for one, is offering to double the tax credit in savings on a new Ryland home. In simple math terms, this means the combined incentives could put as much as $24,000—with $8,000 from the federal tax credit and $16,000 from Ryland--back into a first-time buyer's pocket.
However, not every builder jumped into the tax break promotion fray. Other builders, many with a focus on the move-up buyer segments, made little notice of the tax credit expiration on their websites. Brookfield Homes, for one, had more tax credit FAQs and informational materials on its websites than promo blitzes.
Toll Brothers focused its sales messaging less on the tax credit expiration and more on its “national spring sale event,” which offers buyers different incentive options depending on divisions. Minnesota buyers, for example, can get up to $10,000 in closing costs paid, while North Carolina buyers are eligible for a $30,000 outdoor living package that includes a screened room, a grill, and a patio with pavers. In other markets, $1 options on designer upgrades are the carrot.
NVR's family of home building companies also avoided banging the tax credit expiration drum; however, it is advertising its own "stimulus packages," with details that vary by builder brand and market.
Of note, however, is that some of the builders with the loudest tax credit expiration messaging and promotion also appear to have the most spec inventory to move.
For example, Pulte Homes' Web site makes note of the tax credit in a much lower-key manner than many of its competitors. A small blue box notes that the federal program expires soon and, when clicked, sends buyers to a list of finished homes that may qualify for the break. "Get the home you really want--and the tax credit. Act by April 20, 2010," according to the site. However, Pulte's list of homes available seemed somewhat short in many markets, which may reflect in part Pulte's move toward a more build-to-order model.
D.R. Horton management, on the other hand, has said it planned to increase its spec count to have more homes available to capitalize on any buying frenzy the credit may generate. Horton may have eschewed the flashing boxes on its home page, opting for a red pencil circling April 30 on a calendar to tease buyers into the site. But a quick look at the available move-in-ready homes in its markets shows that executives have made good on their word. Buyers who click through to view quick-close homes have quite a selection of homes to choose from in many of its markets.
Learn more about markets featured in this article: Denver, CO.