Toll Brothers, the largest U.S. builder of luxury homes, just increased its land holdings in anticipation that the housing market will continue to recover.
The company, which sells homes in 20 states, plans to focus on growth in its current markets in the next five years, according to executive vice president Douglas C. Yearley.
The company also is exploring selling homes with a joint venture partner in China and becoming a loan servicer.
“People are not as scared any longer that a house is a lousy investment,” Chairman Robert Toll told Bloomberg. “The focus is starting to change.”
“When a change is in the majority of the markets, which it clearly hasn’t done yet, then you’ll see a new paradigm for the business.”
Toll’s sales improved in southern California; Raleigh, N.C.; and the urban metro New York market, and the company says that most of the suburban markets in the corridor from Washington to Boston are also improving.
The company expects to deliver 2,200 to 2,750 homes in fiscal 2010, with the average selling price $540,000 to $560,000 per home in the third and fourth quarters.
The second-quarter backlog, or homes under contract but not yet sold, rose 5 percent by value to $993.5 million and the number of units increased 10 percent to 1,738 homes, the company said.
Selling homes that cost more than $1 million remains difficult in most markets, with the exception of New York City, Toll said during an interview on CNBC.
“There’s no doubt over $1 million is slower coming back,” he said.
The newly released Case-Shiller Home Price Index shows a very uneven housing market, with significant recovery in some places and continued decline in others, the Atlantic reports.
While the National Index is up 2 percent over the first quarter a year earlier, it is down 3.2 percent from the end of 2009.
© 2017 Newsmax Finance. All rights reserved.