Spec Homes Needed for Tax Incentive

One of the side benefits of the $8,000 federal tax incentive for home buyers that it is driving the housing market by prompting builders to put up spec homes.  It seems almost counter intuitive that people wouldn’t just buy up the current inventory.  However the tax incentive requires that people close on their homes by Dec. 1st.  If the buyer cannot find a home by then, the potential buyers lose out.  From a builders’ standpoint, they have to have something ready to sell when that buyer walks in.  It won’t do any good to sign a contract in November for a house that won’t start construction until April.  So in  response, some builders are ‘stocking up’ by building spec homes.  The bad news is that this push will probably fade by the end of October.  Source: http://www.bigbuilderonline.com/industry-news.asp?sectionID=363&articleID=1031517