With prices flattening and inventories soaring, home sellers in the United States are showering prospective buyers with incentives. The freebies include fancy kitchen cabinets, granite countertops, marble baths and hot tubs, even months of massages and a personal chef for a while.
In some parts of the country sellers are putting more on the table, including golf memberships, Visa gift cards, swimming pools and subsidised mortgages. 'Incentives are all over the place', said Salli Kirkpatrick, founder of the Sacramento-area advertising agency SK Associates.
'About 75 per cent of the nation's builders and developers are offering incentives,' said David Seiders, chief economist of the National Association of Home Builders. 'Price cuts are averaging 5 per cent to 6 per cent and one third of all large builders have cut prices in at least one of their developments by 10 per cent.'
The US housing market, after five years of double-digit price gains, is correcting faster than expected by many in the industry. Late last month, the National Association of Realtors reported sales of existing homes fell 4.1 per cent while inventories soared to a 13-year high.
Las Vegas, which had led the nation in prices gains in 2004 and last year, saw the median price of a single-family home increase by just 1 per cent in July to US$310,000. But the number of existing homes that were listed for sale shot up by 33 per cent from a year ago, according to Linda Rheinberger, president of the Greater Las Vegas Association of Realtors.
With the tide having turned, developers and builders in the casino capital turned to incentives to cut inventories. Newspapers report giveaways of washers, dryers and refrigerators with new home purchases. Agency Kimball Hill is offering a 10 per cent commission to agents on standing new home inventory and up to US$25,000 for a pool on all homes closed by September 30 at the Cascade section of the city's Mountain's Edge development. Offers range from landscaping and irrigation systems to Vespa motor scooters.
