Luxury homes moving
Builder sees improvement in market
LOS ANGELES – Luxury homebuilder Toll Brothers Inc. said Wednesday that its mostly affluent customers are starting to shake off worries about the housing market and they’re buying homes again.
The builder said its contracts for new homes rose 7 percent and home deliveries increased 9 percent in February through April, compared with a year earlier.
It also posted a smaller quarterly loss and raised its forecast for the number of homes it expects to deliver this fiscal year.
The results bucked recent trends among large homebuilders, most of which posted weaker sales numbers for the first three months of the year than a year earlier, when a federal tax credit helped stoke home sales.
That government incentive, aimed primarily at first-time homebuyers, wasn’t much of a factor for Toll Brothers. The builder caters mostly to homeowners who are looking to trade up into a nicer home and have jobs, sterling credit and can afford a 30 percent down payment.
Those buyers took a big hit when the financial crisis began in fall 2008, but their fortunes improved as the stock market recovered. Their main obstacle to buying now is, in many cases, concern about when the housing market will recover.
But CEO Douglas Yearley said those concerns appear to be easing, or at least starting to taking a back seat, for many of Toll’s buyers.
“We believe that some of our clients, after waiting so long, are starting to move off the fence and into the market, motivated by attractive pricing, low interest rates and, most importantly, the desire to take the next step in their lives,” Yearley said.
While characterizing the spring home-selling season as similar to last year’s, Yearley said he sees signs of stability in the market and improvement across Toll Brothers’ offerings.
The company has raised prices in some parts of New York City and in Hoboken, N.J., by as much as 10 percent, compared with a year ago.
Still, Toll’s pricing has remained flat in many other markets, with Las Vegas, Phoenix, Chicago and the market for second homes in Florida remaining weak, Yearley said.