New York Times
Toll Brothers, the nation's largest builderof luxury homes, announced recently thatskyrocketing home prices appear to becoming back down to earth. Over the next12 months, the company predicts that itwill sell fewer homes than previously forecast,due in part to high energy prices andfall's hurricane activity, which may delayconsumer spending on new homes. Thecompany also attributes their slowdownto local governments, which appear to beholding back new construction permits topacify existing residents' clamoring forslower growth. The reports that the slowdown in Toll Brothers' sales may be the latest sign of a deceleratingreal estate market, also citing therecent rise in mortgage rates as evidenceof a possible bottoming-out. While thecompany does expect home prices to rise,it predicts it will do so at historical averagesrather than the rapid growth experiencedin the Northeast and California.According to the Commerce Department,new home prices have risen 6% since1964, but rose 13% last year. Toll Brothershomes start at $679,000, and the typicalbuyer has an annual family income ofmore than $100,000.