Demand among homebuyers is so high in some parts of the United States that builders are holding lotteries to decide who gets to purchase homes in their developments.
O'Brien Homes started holding a monthly housing lottery for its 228-unit development called Fusion in Sunnyvale, Calf., after seeing throngs of prospective buyers camp out at the openings of other new condo complexes in the area.
Each month, as new sections of the development came under construction, roughly 50 buyers would show up at O'Brien Homes' sales office hoping to be picked for one of the 10 or so sites available. The participants were already pre-qualified for a mortgage and had their down payment in place. After being assigned a number on a bingo ball, they crossed their fingers and waited for each ball to be plucked from the tumbler.
For each unit, the company drew a winner and a back-up, just in case the winner backed out.
Lotteries are not a perfect solution, especially for the buyer who walks away empty-handed.
Adding to that frustration was that home prices rose virtually every time a new group of homes went on sale. The two-, three- and four-bedroom homes started out between $420,000 and $620,000 U.S. The last grouping went for $555,000 to $815,000 U.S., a 32% increase.
Even with the price hikes, buyers kept returning. O'Brien started issuing returnees an extra bingo ball. If they lost for four straight months, they would get five chances the next time.
The last available home in the complex closed last week. Some customers got shut out. For Frimel, that was one of the hardest things to watch. She had gotten to know many of the regulars well.
In addition to O'Brien Homes, other Bay Area builders are also using lotteries, including Shea Homes at a development in Livermore, Calif. and Shapell Homes in San Ramon, Calif.
But lotteries aren't just taking place in California. In northern Virginia, Camberley Homes held a lottery to sell two model homes in a new community called One Loudoun last week. More than a dozen people participated.
In Florida, GL Homes held its first lotteries since the housing bust. In mid-April, the company sold off 11 of its model homes in Delray Beach, Fla. in its first lottery in more than five years.
Last weekend, more than 1,000 people showed up for a sale of lots in its Boynton Beach, Fla., community featuring homes ranging from the high $300,000s to the low $600,000s U.S. GL Homes held a lottery, in which 75 home buyers entered to win their first choice of lots.
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