Why build a home you have no buyer for

With the housing market and economy not in the best condition. I have to ask the question of why would you build a home that you currently don’t have a buyer for? Wouldn’t this be putting the builder in a risky position financially? When a new home started getting built on an empty lot in our neighborhood recently we didn’t give it much thought. Everyone pretty much figured in this market a buyer must be in place. At the rate construction was taking place we thought the builder would end up being the new owner.

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Well it turns out the builder isn’t who will be occupying the new home. Since even before the new house has a roof there is a for sale sign in front of this new construction. After some discussion the general consensus is that the builder must have employees he needs to keep working. I’m sure the builder also has obligations of their own to meet. Either way it still seems like a risk. Although I was told that the homes currently selling are single family units. Many people are of course downsizing. I just know I wasn’t the only one a little shocked when we saw the for sale sign. Everyone I talked to had assumed the property and construction was already purchased and financed.

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