Housing News
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.
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Housing News
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.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
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.
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Housing News
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.
…Click here to continue reading this story…
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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
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.
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.
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.