"Many of the home sellers are having trouble facing the facts," he said. "The best prices are not on the privately owned houses, they're from the builders and the banks."
Even with the discounts, however, many buyers remain on the sidelines, thinking the market has yet to bottom. To help persuade them, some builders are offering price guarantees.
KB Home, for example, recently agreed to give buyers in some developments a lower base price if the selling price of similar homes in their developments falls in the time between the contract signing and the purchase closing.
Tom DiPrima, president of KB's north Los Angeles division, said the policy had helped persuade reluctant buyers to make the leap and purchase. "They've said it really gave them the peace of mind to jump into the market," DiPrima said.
DiPrima, however, also credits the role of lower price points.
In one Antelope Valley development, KB Home had been offering 3,200-square-foot houses for more than $400,000. By cutting the size of the houses to 1,500 square feet, the company was able to sell them in the high-$200,000 range, DiPrima said.
"People there couldn't afford a $400,000 home, no matter how big it was," he said. "We're back to what people can afford."
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peter.hong@latimes.com
