New Home Dive Levels Out

It turns out that after a year on the decline, the market for new homes may be stabilizing, according the Toll Brothers, the largest US luxury home builder.

By: John Noble

It turns out that after a year on the decline, the market for new homes may be stabilizing, according the Toll Brothers, the largest US luxury home builder. “We won't hesitate to buy assets if they are a steal,” says Robert Toll. The company has reported that their preliminary third quarter numbers were stronger than anticipated. In addition to their new sales, fewer of their customers canceled their new home orders.

With that good news aside, Toll does add that the foot traffic at their developments is still “dismal”, though he does say that it isn't getting any worse, and actually stabilized earlier this year. The majority of the economic numbers support that claim; even though sales compared with a year ago were down 1/3rd, sales are steady, and the supply of homes is decreasing, according to Financial Times.

While Mr. Toll said that they are not going to be purchasing other builders, the company is willing to purchase their homes or land. Toll Brothers remains in a strong financial position, with $1.5 billion in cash, and another $1.3 billion available to borrow if a deal presents itself.

Toll does admit, however, that the market conditions remain relatively weak. He characterized the phenomenon, “...as though we walked into a tar pit and sunk in up to our nose...and we are not going down any further, so that's sure doesn't make us feel that comfortable.”