‘We may be seeing a floor,’ Toll CEO says
Builder’s 2007 profit outlook below forecasts, but housing bottom seen
PrintE-mailDisable live quotesRSSDigg itDel.icio.usRelated Blog Posts & ArticlesBy John Spence & Steve Goldstein, MarketWatch
Last Update: 2:43 PM ET Dec 5, 2006
(An earlier version of this story misstated fourth-quarter revenue.)
BOSTON (MarketWatch) — Luxury home builder Toll Brothers Inc. on Tuesday said next year’s annual profit will likely fall substantially from the recent boom years as the housing market continues to unwind, but also raised hopes that it’s seen a bottom as buyer traffic improves in some markets.
Toll Brothers stock was chopped in half this year and is currently recovering from that drop. The home builders may be able to still operate with some profits in the coming year. Maybe even at a level of about 50 – 60% of what they did in the boom years. While this is positive for their stocks, it does not necessarily mean that housing prices have bottomed.
Bob Toll comments were regarding the Wash DC/NOVA markets and he said that some communities that were seeing 0 to 1 sales a week were seeing 1-3 sales a week.
Therefore all of housing is saved.
There quarterly report is insanely bad, shedding land, stopped buybacks (presumably to save cash, I’ll have to listen to the CC), and order cancellations are spiking.
In the past, Bob Toll claimed their business was more immune than other homebuilders due to their market niche. Now the truth is coming out, they aren’t immune, the same exact thing that happened to every homebuilder is happening to them, high cancellations and low sales.
In San Diego, every year since Dataquick started tracking sales, sales dropped in the fall but then jumped from November to December, anywhere from 8% to 30%. Then they fall off again, with January the lowest sales of the year.
I did not check if this is a national trend, but if the same thing happens in Wash DC as in San Diego, the uptick in December sales means offers made in late october – November, the period they are talking about. So this is probably just seasonal patterns, nothing more.
can anyone explain why sales reverse their fall/winter slump for just that one month, every single year?
.
