Summary: Toll Brothers, a luxury home builder is seeing some positive signals in the economy as an increasing number of buyers are looking for “value” homes rather than bottom priced, distressed properties. This is good for Lake Tahoe real estate market as it enables us to sell “high value” distressed properties quicker, limiting the impact to surrounding neighborhoods.
Ive been seeing this trend quietly gain speed. Value home buyers are shunning low quality homes in short sales and foreclosures for homes built with higher standards:
“…wealthier customers with higher standards for a home’s condition are less tempted by cut-rate foreclosures and short sales.”
True, home builders like Lennar and Toll Brothers are affected by bottom of the barrel prices of distressed properties. But as I have talked to sales managers of these same companies, I’ve discovered that their buyer demographics are a special breed. They want value. And they are willing to pay for it.
Not everybody goes crazy over Walmart.
They went on to report that buyers are starting to move off the fence and move into the market:
“We believe that some of our clients, after waiting so long, are starting to move off the fence and into the market,” said Toll Chief Executive Officer Doug Yearley.
This statement coincides with the latest housing starts and building permits report:
U.S Housing Starts and Building Permits
As you can see from the graph, we came from a looong slide (perhaps we still are), but we’re seeing flickers of hope the past year, as new home builders are starting to build again, because demand is beginning to improve.
Worth mentioning is the improved performance of home builder stock index:
Home Builder Stock Index
The above numbers gives me the good chills that construction jobs are on the rise again after a forgettable last four years.
What does this have to do with Lake Tahoe Short Sale market? I think this “search for value” of buyers is good for the local Tahoe market as most of the short sales and foreclosures (albeit few) are in good condition, and are being bought by active buyers. The more short sales and foreclosures we sell (and we are), the faster our market is going to recover.
We can’t control the possible future onslaught, but any present help from the economy, I would gladly take.
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