<<There just isn't enough ground left in the suburbs, and you have a whole new thrust from boomers and young hip-hoppers who want to be back in urban areas. Urban developments are less than 5% of our business, heading to 10%. <<
That's certainly a trend in some cities, as empty-nesters are selling their suburban homes and trading down to a $1 million plus luxury condo in town. We're seeing that here.
But that's not what TOL and PHM (the two I'm focusing on) build. They build $600,000 - $800,000 castles in outlying, not-very-desirable suburbs. An empty-nester doesn't want to heat, clean, furnish, and landscape that kind of a monstrosity.
And why would a young couple spend that kind of money ($500,000 at 5% is $2,083 per month--that's being generous and assuming that they have the $ for a downpayment) plus $1,000 - $2,000 per month to heat the place in the cold belt, plus the $$$ to furnish the place, clean it, landscape it) in an undesirable community (translation: poor school system and 45-60 minutes away from the city) when, for just about the same price, they could get a decent home--smaller, but also less expensive to heat and maintain) in a very desirable community (excellent school system, 15-30 minutes from the city)?
I just don't think that the people who really have the money are going to spend it on that kind of housing this year. And I don't think people who don't have the money are going to be able to borrow enough to pay all of the bills that come with that kind of housing.
So, yup, that's why I'm up to my eyeballs in 2006 puts <g>
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