Toll Brothers Orders Plunge as California Buyers Vanish

Toll Brothers Orders Plunge as California Buyers Vanish

Toll Brothers Inc.’s new home orders dropped 24 percent in the fiscal first quarter, the steepest annual decline for the biggest U.S. luxury homebuilder since the depths of the housing crash in 2010. The company struggled to find move-up buyers in California, which is gripped by an affordability crisis.

Analysts expected a decline of less than 15 percent in new home contracts in the quarter, which ended Jan. 31. Instead, it was the largest drop since the 27 percent year-over-year fall in the third quarter of 2010.

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They waited too long to enter in the market.

They always do that, because they forget that a home built today is cheaper than one built tomorrow.

The land/entitlement cost per unit is $120k. How much does it cost to build each unit assuming 1000sf 2/1 unit?

The seller chose a residential broker. They should choose a well connected commercial broker instead.

They can sell condos. A 1000sf 2/1 condo can sell for 450k-550k in Irvine.

Oh, you mean these builders aren’t building to favor American buyers?

That’s new to me. :laughing::smile:

“but there’s not enough housing being built!” :wink:

Theses are all short time frame issues …take the long view.

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Gen Z sees technology and health care as the most desirable industries to work in, and, in fact, both sectors are expected to be growth drivers for jobs in the coming decades.

Buy AAPL!

The article supports my belief that recession is short and may not cause the stock market to go into bear territory. Btw, the stock market did go into bear territory last Dec, probably may happen again in late 2019/ early 2020 which means there is no need to get out of the market totally or even need to.

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There are thousands of stores closing because they fail to innovate. But their absence is causing strip malls or many buildings to be almost empty if not abandoned.

And, there’s plenty of space there to build housing. Except that those in the industry are not there to solve the problem but to enrich themselves.

As I said one too many times, these building companies get into the game in the last quarter of any housing cycle. Had they had some visionary ideas, they would build and build housing, which would be cheaper yesterday than today. Instead they are playing against the famous “time is the essence” mantra.

Retail should be converted to housing. But cities don’t allow it. They don’t want to lose the sales tax revenue. In fact cities often require retail on the ground floor of urban apartments. Space that is worthless and unwanted. Parking is more desirable.