BobbyD — can you tell us how many houses are built in those luxury tract home communities (that you referred to) in the last 3 years? Just wonder the size of the problem if it were to suffice. Do you get the sense of an average buyer’s profile (profession, age, etc)?
I wonder if some people right now are covering mortgages and expensese not from income, but from previous lump sum home equity extractions. That is, a homeowner sold previous house, instead of put all his profit as downpayment, he put the cash aside and take out a large mortage beacuse credit is easy. Now if someone made $200K profit, and his monthly housing related expense totals $8K, but he can only realistically support 4K from his salary, he’s $4K short. But his $200K profit can support him for 50month – that’s 4 years. Of course, if housing prices start to go down meaningfully, he sure will get nervous before he exhausts his previous gains (or equity extraction from a HELC loan). I guess my point is that people who bought these high end homes may have more room to manuver to buy them sometime before the cash flow issues really force them to give up. We’ll see. 2007 and 2008 will be critical years.