Large Builders Battling Foreclosure Deals

Analyst: "I don't know how the builders are going to compete"

The rising tide of foreclosures means bad news for large homebuilders from California to Florida. The Wall Street Journal takes a look at several Pulte, Centex, KB and Lennar communities where the large builders are trying to sell new homes for 20-40% more than comparable existing homes in some stage of foreclosure. The Pulte home pictured is on the market for $149,900 while Pulte is trying to sell similar homes for $214,990 in the same neighborhood. A Pulte spokesperson makes a pretty weak case for buying new: "Our brand-new homes appeal to the buyer who wants up-to-date features, a chance to make their own selections like carpeting and paint colors." But isn't buying a new home in these neighborhoods in this environment almost akin to buying a new car? It's going to lose 30% of its value the second you're handed the keys, so why take the risk?