Industry NewsMarkets & Economy

NAHB survey finds decline in condo confidence

Builders report price drops, rising incentives

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A National Association of Home Builders quarterly index that measures builder and developer confidence in the condo market dropped 11 points in the final quarter of 2007 compared to the same quarter in the previous year. The Multifamily Condo Market Index, based on a survey of builders, stood at 18.8 in the fourth quarter on a scale of zero to 100. A score below 50 indicates more negative responses than positive responses. About two-thirds of builders reported that they lowered condo prices to strengthen sales, with an average price reduction of 11 percent. When asked about other marketing strategies, about 70 percent of respondents reported that they included optional items at no costs, paid closing costs or fees, or absorbed financial points for buyers as incentives. A component of the condo confidence index that measures sentiment about current conditions in the condo market did not rise above 25 during any quarter in 2007. A component that tracks condo builder expe...