Housing recalculation

At econlog.org, Arnold Kling often writes about the Great Recalculation that is underway (and essential) as we get out of the Great Recession. Recalculation is, of course, routine in market economies and explains their success. But the crunch comes when large-scale shocks require large-scale recalculation -- and when the politicians ride to the rescue with their own surprises and shocks.

Here is the story of one such recalculation (H/T Planetizen). It's the story of how home builder Toll Brothers is working to cope with new realities of the housing market and looking for the new sweet spot in it's market: what sort of new homes can builders like this put on the market that their customers will buy as they are less optimistic, less willing to throw caution to the winds and more conservative in their approach and expectations re living space and living amenities?

All this is distinct from the point made in my post yesterday: the rethinking is not in response to the smart-growth ideas from the smart set. The bottom-up rethinking is essential -- and always more usful than what is proposed top-down.