No Payments until January 2007

I called Ryland today about their "Choose-It" promotion. It was quite hard getting any information out of them.

Here is what I can gather:
This seems to be some kind of "fluff offer" that perhaps they are praying will work. It does not appear to me to be any substantial offering of any kind nor any real panic by Ryland.

I tried like mad to get the salesperson to tell me how much they would take off of homes (price reductions), but the best I could get was $30,000 - $60,000 in "select" Phoenix locations. He asked me where I wanted to live (and this is where it got harder as I do not know a thing about Phoenix). He gave me a friendly lecture about picking a section of the city first and starting there.

All I wanted to know was how big are the discounts and on what price homes. He was trying hard to NOT tell me that on a model by model or price range basis. It was my first unsuccessful attempt to get info. With Centex and others I was able to go model by model and have someone tell me what the reductions were. Not so with Ryland.

In Bubble Busting Phoenix I reported there were 14,601 Vacant Homes in greater Phoenix area. At the moment that does not seem to be of much concern to Ryland. I could only find a dozen or so homes on the Ryland site that were "available soon" and only one of them was "immediate".

Although the message boards I frequent were talking about this campaign, it does not seem to be panic but rather much ado amount nothing. Still Ryland will quickly be adding to the already mammoth supply of Phoenix inventory.

Here is an anecdote from StB on the Motley FOOL just today about Phoenix:

Well, we have had our house on the market for five months, nearly to the day. The first three months were capped by the holidays, non-aggressive pricing on our part, and non-aggressive marketing. In the subsequent two months, we got very aggressive on our price and marketing, but it took us cutting our list price $5k under where we thought it would move to get significant traffic through the doors.

We are now under contract for $12k under our list price...again, more than we thought. Over the timeframe, our list price dropped by $30k, and our final sell price is also $30k less than we originally thought it would sell for. During the time our house was on the market, we saw identical floor plans in this community sell for continually decreasing price: September (before ours went on the market) the price has steadily declined by about $10k every six weeks. Folks, if you needed any further confirmation that the PHOENIX market is declining, here is your anecdotal evidence.

I am making a note to check back into Ryland Phoenix in a few months when more houses will be available. It will be interesting to see who wants to buy a home and for what price in the dead heat of summer. I am also wondering how long it will be before we see "No payments until January 2009".

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/