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Lennar bridgeway in Newark does lottery to decide who gets their Single family. Any reason why? Their prices are cheaper than market and these homes being new construction single family will sell like crazy if they do auction. They do sell their model homes in auction and they go way above the list price but usual releases are sold through lottery which to me is quite surprising. For example: Their bungalows are 2800 sqft homes being sold for $1.6m which is way below the current market rates. what am I missing here?
No idea. But I’ve been adding Lennar stocks LEN.B
It's to hype it up. Exclusivity causes hype. Hype causes easy sales.
Why hype it? They will sell as is! This is bay area and new construction, You hardly find any new sfh. Older construction homes are selling for more. I think this might be a legal thing?
To make sure that there are posts about them, to make sure that people who didn't get this batch will chase after the next, and of course make the news which is free publicity.
Their build quality is terrible. No idea why people are so eager to enter lottery to buy such homes
Which builder has better quality?
All the volume builders are terrible. Starting from DR Horton to Century communities The top quality build in Bay Area is from following. But they are very expensive Thomas James Homes Brooke Shaw Builder Urban Pacific Homebuilders Top Shelf Construction
I think lottery is to deal with overwhelming demand. They have low inventory and if they go with bidding, each of these homes will get 40-50 offers which only will keep increasing as time goes by. Holding a bidding is not sustainable and unmanageable. So they do selective auctions and rest is lottery or first come first serve.
I think they want to make sure each batch of houses sell for more than the previous batch of houses. They won’t make too much more money on a batch of 5 houses just this month. If they do auction to squeeze out the last dollar of profit and housing market cool off a bit next month, that will hurt buyer sentiment for future sales. Doing lottery means there’s no buyer remorse for their houses and they have continued demand. Imagine the outrage from existing owners if they price a new batch of houses below the previous ones, or that the new batch doesn’t sell. Lennar owns that whole community and all the future new construction sales and they want to be able to say none of their owners lost money purchasing their houses.
This works well for buyers who get picked anyway! Imagine not having to goto bidding war and over pay! You can never buy a home for its list price these days.
Pretty sure you answered your own question. They are doing a lottery because they are selling them under market value
But why sell them under market value? Is it some government mandated thing?