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Are luxury real estate buyers are pulling back? Signs point to yes



Luxury homebuilder stagnant?

Growth for luxury homebuilder Toll Brothers Inc. took a hit with a reported rise of cancellations from 6.2 percent in the first quarter to 7.4 percent in the second quarter and although contracts signed rose two percent in units and dollars, the company warns of uncertainty in the luxury market. Toll Brothers reports that continued volatility in the stock market and overall economic uncertainty have plagued homebuyer confidence.

Toll’s revenue in the fiscal third quarter ending in July, fell 13.2 percent while deliveries in the same period fell 14 percent.

The disappointing quarter for the builder that focuses on buyers typically less affected by economic downturn points to a general feeling of uneasiness of affluent homebuyers and a hesitancy to buy.

Skittish consumers in the luxury market

“Nothing shows you the consumer is getting skittish more than tepid orders and higher cancellations,” Demir Gjokaj, senior homebuilder and real estate analyst with ITG Investment Research told Reuters. Gjokaj had projected an 18 percent jump in orders, Wall Street analysts averaged projections of a 12 point increase, making two points a paltry rise in orders that connotes a “broader malaise.”

“The luxury consumer is pulling back,” Gjokaj continued, which implies luxury builders could have to cut prices if demand remains stagnant.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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  1. Joe Loomer

    August 27, 2011 at 7:34 am

    "…buyers typically less affected by economic downturn…" Huh?!?!?! What the heck does that mean? Only the little man (and woman) were affected by the economic downturn? Don't you think the affluent would take advantage of THIS market more than any other sector of the public?

    In my area, you have a less-than 3% chance of selling your home if it's over $300K – about one quarter of what it was four years ago. This with two nuclear power plants, seven major hospitals, a large military installation, and the headquarters of the two largest golf-cart manufacturers in the world. You can't tell me these buyers are "less affected."

    Navy Chief, Navy Pride

  2. Bruce Lemieux

    August 27, 2011 at 8:37 am

    After three years of declining sales activity of upper bracket homes in my market outside of D.C., activity has been up significantly beginning late last year. I attribute it to better values, higher confidence and buyers with a ton of cash.

  3. Ruthmarie Hicks

    August 27, 2011 at 11:58 pm

    The luxury market in Westchester has remained strong – however I have seen people pulling out of new construction.

  4. Sam in Austin

    August 29, 2011 at 1:00 pm

    Toll Brothers is a luxury builder? I think not. They are just a little higher end production builder.

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Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?



Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.



aging housing inventory

aging housing inventory

The average home age is higher than ever

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With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

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zillow move

zillow move

Why Realtors are vulnerable to these rapid changes

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Note: We’ll let you decide which company plays which role in the image above.

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…Click here to continue reading this story…

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