Newly built, not sold ... now for rent

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Good morning, again. Excellent post over at the eagle-eyed Manhattan Beach Confidential blog, on a trend that speaks to the weakness of the market in August: numerous, brand-new $2-million and $3-million homes that have been sitting on the market are now listed for sale or lease in Manhattan Beach.

Example: 2709 Oak (new, 373 days on the market) – list price: $2.29m, rental price: $8,500.

On the surface, this is a no-brainer: the market is soft, you can’t sell these showpiece houses right now, so you rent them out. But MB Confidential goes beyond the no-brainer and observes, shrewdly: ‘And yet, offering your new stuff for lease has got a bullish edge. Doesn’t it convey that the builders expect demand and prices to recover in the near term, so they can later take the profits they penciled out at the start? An intriguing gamble.’

Your thoughts? Comments?
Photo Credit: Reuters

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