In Las Vegas ,Toll Brothers is not reducing prices on its luxury housing units. It stubbornly clings on to very high prices:
These Toll Brother fools out in Las Vegas better get the widely circulated memo that deep price reductions in price are necessary to move new housing units.And despite total traffic through models of between 500 and 600 people weekly, Toll Bros., a luxury builder that also hasn't marketed any discounts, had zero net sales in the week ended Nov. 11 and a negative net-sales rate of two homes in the week ended Oct. 14.
That means the company, whose homes are priced from $345,975 to more than $1 million, had two more cancellations in Las Vegas that it had sales.
Toll officials declined to discuss local sales volume, noting that they release regional data only quarterly. Spokeswoman Kira McCarron said sales of new homes and standing inventory "are consistent with current marketing conditions." (Las Vegas Review - Journal 11/25/07)
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It amazes me how the REIC ignores supply and demand. Draw the line showing sellers are more motivated... Now draw the line showing buyers are less motivated. Result? slower sales at lower prices.
ReplyDeleteThere is such a national surplus driven by the easy credit of the last few years. We'll return to normal credit in 2008. Tight credit in 2009. :( Cest la vie.
Got popcorn?
Neil
This is indicative of how average or median prices can misleadingly increase or stay flat in a declining market, i.e., where sellers are recalcitrant. Transaction volume is the real indicator.
ReplyDeleteToll is wise enough to know that these places won't sell at current prices; it seems that Toll would rather pay the cost to carry these properties than sell at reduced prices and incur the wrath of the customers to whom they sold at the top of the market.
Why do BH's keep "demanding" that sellers reduce their prices? Maybe sellers don't need to or want to. If you believe that it is inevitable, then just wait it out.
ReplyDeleteThe REIC ignores supply and demand? Give me a break. When financials require it, prices will fall. Apparently Toll is not at that point. It may come to prices being slashed or it might not.
Why should it, or would it, be on your schedule?
If your bet is that prices will fall drastically, then sit back and relax. Your outrage will do nothing to alter the process.
Are you upset that you have to continue renting for a number of years while you hope that your scenario plays out? Maybe there will be a pot of gold at the end of the rainbow, maybe not. You know the saying about "death and taxes".
In the meantime sit tight, pay your cheap rent and amass a fortune for your downpayment. I'll just continue to reside in my home, eating popcorn, and pay it off like the vast majority of "home-debtors".
va.
Good point VA!
ReplyDeleteThose houses are obviously priced right.
Lets all go buy one...
Pride goeth before a fall.
ReplyDeleteDang, va, you and the sock puppets and really getting nervous, and it shows.
ReplyDeleteGosh,
ReplyDeleteIs that the best you guys can do? I'm nervous? My pride is gone?
And where did I say to go buy a house? I've never told anyone to buy OR sell. All I said is to quit complaining about prices not falling off a cliff.
You guys rode out years of incredible price increases, you can ride out the next 5 yrs. So what if you are 40 when you buy a home?
I was saving this for later on, but the comments of va have persuaded me to post this....
ReplyDeletehttp://www.washingtonpost.com/wp-dyn/content/article/2007/11/19/AR2007111902145.html
http://www.washingtonpost.com
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(I cut it up into sections in case part of it gets lost)
The number of recent home foreclosure filings in Loudoun, Fairfax and Prince William counties is up more than 600 percent from a year ago, a much higher increase than in the United States as a whole.
Loudoun had the sharpest increase among the three counties,
with 1,073 foreclosure filings in July, August and September, compared with 125 filings during the same period in 2006, a jump of 758 percent, according to RealtyTrac.
Oh yes, the market is stabilizing, prices will go up, no one will buy some cheap foreclosed property when there are still overpriced houses for sale, the NAR is alwyas right and yada yada yada.
;)
VA,
ReplyDeleteA seller who doesn't lower prices to meet the market isn't really a seller.
"Why do BH's keep "demanding" that sellers reduce their prices? Maybe sellers don't need to or want to. If you believe that it is inevitable, then just wait it out."
ReplyDeleteMaybe Toll Brothers will just stop selling houses completely. Instead of selling them they will instead just build them and let them sit vacant, forever.
What could possibly go wrong with this plan?
Clearly they have no need to cut prices... afterall, what is a few months with negative sales in a major metro area? Certainly nothing to be concerned about!
Terminator-X said...
ReplyDelete"VA,
A seller who doesn't lower prices to meet the market isn't really a seller."
And Terminator, a "buyer" who doesn't buy because he's not willing to pay market prices, isn't really a "buyer". He's a bubblehead. :)
Boy, I wonder who will flinch first? The "buyer" who is paying $1500 a month rent and saving $3k a month or the "seller" who has a $5,000 a month mortgage they can't afford on a depreciating asset. hmm...tough one.
ReplyDelete