Homebuilders Increasingly Target the Wealthy
The past few weeks have delivered sobering news regarding homebuilder confidence and nationwide home prices. But the high-end sector of the residential market is humming along—and becoming a beacon for homebuilders. We're not talking about the super-luxe condos going for $100M here. Rather, a New York Times report today notes that builders like Toll Brothers are hooked on homes priced at $1M and up, even though they represented just 3.7% of new home sales in 2013. Last year, Toll Brothers sold three times as many $1M+ homes as it did two years prior.
The fever has spread even to builders historically focused on affordable properties. For instance, in 2012 DR Horton sold just five $1M+ homes. Last year, that number zoomed up to 145. At the same time, the gap in prices between new and existing homes has widened to the point where the freshly builts demand a $100K premium, up from a $32K divide one decade ago.
