Despite a nightmarish second quarter earnings report Toll Brothers CEO continues to put the housing market in good light. The nations leading luxury homebuiler lost $83.2 million in Q2 with write-downs totaling $120 million. Cancellations were up slightly when compared to Q1.
Robert Toll said:
“With interest rates near historic lows and housing affordability near historic highs, it appears that some buyers are beginning to re-enter the new home market. The recently reported strong rise in consumer confidence was consistent with our recent experience: We have now experienced positive same-week, year-over-year refundable-deposits-per-community comparisons in nine of the past eleven weeks. Although cancellations appear to be leveling off, we believe that concerns about job security and the economy continue to inhibit traffic and the conversion of deposits to contracts.
We believe affluent buyers continue to have an appetite for higher-end homes while still demanding value and quality. When we have run promotions offering reduced mortgage rates or other special savings, many customers instead have elected to convert the special savings to upgrades on their homes. On average, buyers selected options which were approximately 18.3% above the base house price on the new homes we have delivered so far in FY 2009.
We have begun to see more offerings in the land market as sellers – individuals, companies and financial institutions – appear to be more motivated. With our solid capital base, we believe we are well-positioned to take advantage of these opportunities.”
Bob Toll continues to talk about how well positioned his firm is for the eventual turnaround. But for some reason, Mr. Toll and his brother continue to sell huge amounts of the stock. Mr. Tolls insider sales have been remarkably good. He sells at nearly every intermediate top in the market. It looks like Mr. Toll might be the ultimate case of “SOLD TO YOU!”