Homebuilders are responding to the looming deadline for the Home Buyers Tax Credit by building a limited number of spec homes in select communities across the US. The Tax credit is set to expire this year on June 30th for home purchases that have been signed by April 30th. Most economists and Washington watchers do not expect the credit to be renewed this time around.

Homebuilders got caught with too few spec (completed) homes when the previous deadline came around on November 30th and lost sales as a result. This time around builders are taking a cautious approach and on average are building 2 – 3 spec homes per community in their most popular subdivisions as opposed to not having any.

As reported in an article last week in the Wall Street Journal, builders are taking different approaches to what they call “finished” product. Builders are expecting buyers to wait until the last minute to get serious about their purchases and builders know that it typically takes four to six months to complete a new home, so the window to start construction is closing quickly.

The Journal article noted that KB home, the nation’s fifth largest builder will build a limited number of spec houses about half way through to the drywall phase, allowing enough time for buyers to personalize finishes and still close in time for the credit.

For those in the market for a new home the buying environment one can argue has not been much better in quite a long time. Builders are very flexible on both pricing and terms and will generally bend over backwards to get buyers to close on their purchases. If you are in the market to buy take note of the April 30th deadline for qualified buyers and happy house hunting.

This entry was posted on Friday, February 19th, 2010 at 5:00 am and is filed under In The News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.