Sellers Hope Discount Housing Will Attract Buyers

Sept. 16, 2007 — -- With the mortgage crisis slowing home sales, developers have had to go to great lengths recently to transform house hunters into house buyers.

This weekend, they're hoping incentives like rebates, free upgrades and sometimes even cars will help push reluctant shoppers to purchase homes.

Geoff and Nancy Oliver were initially priced out of the home they wanted, but then, the seller offered the couple a $75,000 allowance.

"We wouldn't even be here if it weren't for that to be honest," Geoff Oliver said.

In Virginia, promotions like this are working. On its first day, home builder K. Hovnanian Homes sold as many houses as they usually move ina month. The company is sitting on 35,000 homes across the country. They want to move 1,000 by the end of Sunday.

"All the folks that have been on the fence, now this is the opportunity to buy," said Emilio Martinez, who works for the developer. "It's really not going to get any better than this."

But the deals aren't limited to Virginia. Seventy-one percent of new home sellers coast-to-coast are offering extraordinary perks. The extras include free swimming pools, $10,000 gift cards, pre-paid property taxes and sometimes "driveway jewelry" -- Porsches and Jaguars.

"Home builders are desperate. This is a great time to buy a house," said BusinessWeek's Peter Coy. "There are cases where builders are literally selling homes for less than their costs."

Some analysts predict the market downturn and the deals may continue all the way into 2009.