Real Estate

Toll Brothers Having Difficulty Selling High End Homes.

Fri Jun 04, 2010 12:45 pm
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The housing market has been down-sizing in more ways than one. Just a decade ago home builders were looking for every way possible to add "bells & Whistles" to a prospective buyers home. That was were the huge profits came from, the upgrades.

The high end housing market, which Toll Brothers is but one of the Companies, is now looking to keep their proverbial heads above water. There has been a seismic shift/paradigm shift in what buyers are willing to and can afford to purchase.

High end Bathrooms & Kitchens with special items such as Spas, built in Ranges, High end Cabinets, Marble Showers etc. are not so affordable to those buyers in the housing market. Buyers are concerned that they will be able to afford even a modest mortgage along with Property Taxes, Home Owners Insurance, Repairs and so on.

Builders have been looking to reduce square footage of the homes they build. The average new high end home once at least 3,000 sqare feet has been shrunk to about 2,000 square feet.

This condition will be generational. It is my expectation that there will be a much smaller high end market for the next 10 years at least. The number of high end homes that are in danger of being foreclosed is at record levels. Banks have been playing the "delay game" in working through the process of foreclosing on tens of thousands of these homes. Doing so would only exacerbate the decline in home selling prices.

Builders are not naive. They are keenly aware of this fact and are looking for ways to work through this real estate crisis. 



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