Luxury Builder Toll Brothers Planning Nationwide Sale
23 Septiembre 2009 - 2:13AM
Noticias Dow Jones
Luxury builder Toll Brothers Inc. (TOL) plans a nationwide
housing sale, the company said Tuesday.
It's a move showing that, while buyers might be tiptoeing back
into the market, even strong builders with ample cash still have to
work for deals as the housing market looks towards recovery from
the worst downturn in decades.
The "National Fall Sales Event" will be offered at its 215
selling communities - including the New York city condos, which
have been excluded from previous deals - from Saturday until Oct.
4.
The deals range from half-off options, including custom tile and
appliances, to mortgage-specials, including paid closing costs. The
Illinois and Michigan divisions, for example, are offering a 2/1
mortgage-rate buy down for a 30-year fixed-rate loan. The
first-year's rate is 2.875%, followed by 3.875% for year two. It
locks in at 4.875% for the loan's remainder.
While Horsham, Penn-based Toll's latest offer doesn't directly
lower prices, such specials erode a company's gross margin. And in
the case of mortgage-rate buy downs, builders make an upfront cash
payment to the investor who buys the mortgage. The buy down is
treated as a cost of sale for the builder.
In its third-quarter earnings conference call on August 27,
Chairman and Chief Executive Robert Toll told investors that the
builder was raising prices in about 40% of its communities and that
"the rest" were seeing price stability.
"We’re fairly well convinced that the bottom has been turned,
and, therefore, we are not increasing incentives or lowering prices
anywhere," Toll said.
While incentives continue, they're getting smaller, explained
Kira McCarron, the builder's chief marketing officer.
That hasn't yet shown up in results. At July 31, incentives were
an average $84,000, or 12.6% of the home's sales value, up from an
average $57,000, or 8.5%, a year earlier, according to financial
statements.
Toll is next scheduled to report Dec. 10.
-Dawn Wotapka; Dow Jones Newswires; 212-416-2193;
dawn.wotapka@dowjones.com