Home builders catering to wealthy

Home sales of $1 million and higher account for only a small share of the overall market. Sales of new homes over $750,000 made up just 3.7 percent of all new-home sales in 2013, according to census data. But for Toll Brothers and several other builders, the million-dollar price point has become a new sweet spot for attracting buyers.

Last year, Toll Brothers sold 585 homes across the nation priced at $1 million or more, according to Metrostudy, a research company that focuses on residential real estate development and new-home construction. That was nearly three times the number it sold just two years previously, the company reported.

Toll Brothers has long included the high end in its spectrum of new homes, but even builders known primarily for affordable offerings, like D.R. Horton, are selling a lot more million-dollar homes. According to Metrostudy, D.R. Horton in 2012 sold just five homes for $1 million or more; last year it sold 145. PulteGroup/Del Webb/Centex, Taylor Morrison and Lennar followed similar patterns in recent years.

For wealthy buyers, the recession is long gone, said Mike Castleman Jr., senior vice president of Metrostudy. "If the builders want to stay in business and keep the flywheel running, they go after that market."

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Even apart from the million-dollar level, many builders are moving upscale as fast as they can. The price of newly constructed homes has risen significantly faster than the price of existing homes, according to an analysis from Zillow, the online real estate firm. In September 2005, the average price gap between existing and new homes was about $32,000; by December 2014 it had widened to $122,000.

At the Newtown Square development, called Liseter, even the harsh winter weather was doing little to slow the bulldozers breaking through the frosty ground this month for homes that will feature cathedral ceilings, hand-scraped hardwood floors, winding staircases, his-and-her walk-in closets and garages with what look like antique barn doors. The development sits on a former Monticello-inspired estate where Jean Liseter Austin du Pont once bred Welsh ponies and hunting beagles.

Buyers can tweak the floor plan, pick from a variety of shower designs and fireplace tiles, and adjust the number of data ports in the walls. Since construction began in January 2013, Toll Brothers has sold 136 homes at Liseter and hopes to sell about 300 more.

Not all the Liseter homes begin at $1 million, but buyers want extras sunrooms, built-in wine storage, even the ultimate man cave with a glass-encased room for brewing beer that push the price as much as $300,000 higher.

"We're trying to cater to the higher end just because that's what the market is demanding," Brian Thierrin, a Toll Brothers senior vice president who is overseeing the Liseter project, explained as he meandered through model homes after showing off a club house that looked like a fancy restaurant and spacious gym in a separate building. Final work on an infinity pool awaited warmer temperatures.

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Home builders catering to wealthy