The Orange County Register reported today that Capital Pacific Homes, which is building some home developments here in Menifee, is offering a price guarantee against falling home prices when you buy a one of their homes.
Under the plan, buyers can back out of deals and get their deposits back if the home loan appraisal issued about 30 days before closing shows that the home value is less than the price tag.
I'm not certain 30 days before closing is enough time to prove that your home value has lost its value. I'm sure you'd have to hire an appraiser to just before taking ownership to prove this, and I don't most think will fork over money to hire one.
Moreover, when buying a new home, buyers have already invested themselves into that home by picking out tile, carpeting, outlets, cabinets, and so on.
Also, I don't think home buyers are putting off buying homes for fear of falling home prices. Most people buy homes based on need. Investors, on the other hand, are staying from certain homes.