I’m not arguing that a builder reducing prices or auctioning off units in a community does not hurt the existing purchasers. What I’m saying is that it is not limited to owners in the particular building. It instead will affect owners in the building AND owners in nearby buildings to the extent they are comparable. In a way it is not dissimilar to a bunch of foreclosures in one particular building. The banks will cut the price until they can get out which doesn’t help an owner occupied seller who is selling at the same time. At the end of the day I think people should do their research, know the market and what things are selling for, and buy a home that they want to live in. There will always be someone who gets a better “deal”. But, maybe they had to sacrifice the enjoyment of living in a home they like for some time to get that “deal”.

Jamie,
I have seen it happen personally. You can read it on my blog. A community was hovering around $330k, then they held an Auction and everything dropped to $280,000 and they haven’t recovered since.

And even if they don’t do an outright auction, even if they slowly drop prices $10,000 every 2 months for 10 months… The point is you might think you are getting a “steal” but if the builder has another 20 units, everyone after you will get a “steal-er.”

Also I left off the all important #10

#10 WATCH OUT FOR CONDO FEE HIKES AFTER YOU CLOSE Don’t think this doesn’t happen. Sure the condo association is a bunch of owners, and they don’t want the fees to go up, but the builders tend to make them artificially low to attract buyers. Watch out for this.

Chris