Move My Realty - Real Estate News

HOMEBUILDERS CUT OPTIONS

Homebuilders are slashing the number of options they offer, seeking standardization and simplification to save millions of dollars and survive the housing slump. “If you don’t like cookie-cutter housing, you’re not going to like the next several years,” says Eric Landry, a Morningstar analyst. Beazer Homes USA Inc. says it reduced its carpet offerings by 85 percent; Pulte Homes Inc. cut back to 400 floor plans from more than 2,000; and Centex Corp. cut its roughly 4,500 plans in half, with more reductions under way. “‘Everything’s included’ was born in times that were more like these,” Lennar Corp. Chief Executive Stuart Miller said in an earnings conference call this past summer. It brings “better value to the ultimate purchase price for the home, and that’s going to work well in the declining market.” Not everyone is enthusiastic about the scale back. “I think that when they get a sort of cooler head and really look at the long term of what works in this industry, they’ll realize [that scaling back] does not work. When somebody’s spending a half-million dollars for a house, they want to be able to select some things that personalize it,” says John Fioramonti, senior managing director of Meyers Builder Advisors, a real-estate consultancy.

Source: The Wall Street Journal, Dawn Wotapka (01/09/2008)
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