Mortgage Crisis Hitting Home-The High Priced Ones
An interesting tidbit in the guidancefrom Toll Brothers this week: Amid all the talk of rising cancellation rates and falling orders, “The average price per unit of gross contracts signed in the fourth quarter was $646,000, compared to $667,000 in 2007’s third quarter..however, the average price of the 417 fourth-quarter cancellations in FY 2007 was a much higher $788,000 per unit.”
It should probably come as no surprise that higher-priced homes are seeing higher cancellation rates, since the jumbo loan market is now far tighter than it has been in a very long time. In some areas, anecdotally, I’ve heard that the jumbo loan market has all but dried up.
I notice even in my area of Chevy Chase, DC and Chevy Chase, MD, which was deemed a “micro-bubble,” immune to the housing downturn, that the higher-priced homes are sitting on the market without a move. The 2-3 million dollar range seems to be having the toughest run.
If you’re interested in your area, I want to alert you to a great new source of info. S&P/Case Shiller just started publishing indices that track low, mid, and high price homes. You can look at the top metro markets and see how prices are faring, depending on what price point interests you. Just what you need heading into a chilly November weekend.
Questions? Comments? RealtyCheck@cnbc.com