Builder’s Price Hikes Not Scaring Off Buyers

January 29, 2015 | Comments Off on Builder’s Price Hikes Not Scaring Off Buyers

The nation’s largest luxury homebuilder, Toll Brothers Inc., reported that its revenue jumped by 29 percent in the latest quarter as it sold more homes at higher prices.Toll Brothers’ average selling price in the fourth quarter, ending Oct. 31, increased to $747,000, a 6.3 percent rise compared to a year prior. The builder also upped its pace of the number of homes it finished in the fourth quarter, climbing by 22 percent to 1,807. The momentum likely will continue: New contracts rose 10 percent to 1,282 homes, while the value of its contracts jumped 16 percent.

“We are pleased with our strong finish to fiscal year 2014, and, given the fourth quarter’s improvement in demand, we begin fiscal year 2015 with optimism,” says Toll Brothers CEO Douglas Yearley.

Homebuilders overall are showing signs of strengthening in the market after a sluggish start to 2014. New-home starts rose 6.3 percent to a 1.02 million-unit pace in September, following a 14.4 percent drop the previous month, the Commerce Department reported.

The National Association of Home Builders says it expects stronger performance in 2015 as homebuilding makes some gains at the end of 2014. “This is mostly due to significant pent-up demand and steady job and economic growth that will allow trade-up buyers who have delayed home purchases due to job insecurity to enter the marketplace,” NAHB Chief Economist David Crowerecently said in a statement.

Source: “Toll Brothers Sells More Homes at Higher Prices,” Reuters (Nov. 10, 2014) and “Get Ready to Corner New-Home Market in 2015,” REALTOR® Magazine Daily News (Nov. 3, 2014)


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