Bursting our bubble

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For months now it’s seemed everyone has been biting their nails in anticipation of when the housing bubble is going to burst. Well, the needle may finally have touched the balloon: Toll Brothers—the nation’s largest builder of luxury homes, previously reported by C-VILLE to be scouting Albemarle for future development opportunities—recently announced plans to scale back its previous production forecast for FY 2006 to be-tween 9,500 and 10,200 homes. The original forecast was between 10,200 and 10,600 new homes.

“It appears we may be entering a period of more moderate home-price increases,” Toll Brothers said, characterizing this as a return to a normal market. Toll Brothers, a publicly traded Fortune 500 company, already has holdings in Louisa and Culpeper counties, not to mention hundreds of millions of dollars in holdings in Northern Virginia.

Dave Phillips, CEO of Charlottesville Area Association of Realtors, says the Toll Brothers analysis holds water locally.

“We’ve been at a record-setting market pace for the last five or six years,” says Phillips. “We’ve seen prices go up at phenomenal double digit rates… It’s unsustainable… For 2006 we’re predicting another record year, but instead of beating the previous record by 10 percent we may beat it by 1 percent.”

As for the local luxury-housing market specifically, according to Phillips, that’s also putting on the brakes. At this time last year 50 homes in the area had been sold for more than $1 million. This year? Just 30.

Piecing bits of the local development puzzle together, lately the rumor mill has also been churning with speculation that Toll Brothers may in fact be the money financing local developer Hunter Craig’s purchase of the 1,000-acre Breeden property, the acreage just five minutes south of town that’s ripe for the developing.—Nell Boeschenstein

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