Challenging times for luxury builder Toll Bros. - Pittsburgh Business Times:

ejoxot.wordpress.com
couldn’t have predicted the sour market when it startede planningthe 87-unit development, called Estatezs at Halfmoon. The model home openefd in mid-January, giving prospective buyers a taste for whatToll Brothers, of Horsham, Pa., does with 3,409 square feet of living Priced at $477,000, the model features a 20-foot vaulted ceiling above the family gourmet kitchen with Energy Star-rated appliances, huge mastere bedroom closet, whirlpool bath, walk-out basement, hardwood floors, crown chair rails, four bedrooms and a three-car On a recent day, contractorx were hydro-seeding the lawn near the whitew vinyl fence surrounding the which measures about two-thirds of an acre.
Many trees have been preservedc onthe 130-acre parcel off Vosburgh Road where the homes will be built. A 15-minute drive from Northway Exit 8A, the planned development is the sortof luxury-meets-conveniencre community that was in high demand during the real estat e boom years of the early 2000s. Theree is still demand today, but it has lesseneds comparedto 2006, the peak year for locak home sales. That year, 511 homesw costing more than $450,00o sold in the region, compared to 390 homed last year, a 23 percent decline, according to the . The overall market is also weaker.
Total sales of new and existinyg homes in the region fell 21 percent in February comparedd to theyear before, and the median price was down 5 to $176,000, according to In Saratoga County, where Estates at Halfmoob is located, total sales were down 17 percent in and the median price fell 9 percentg to $230,000. Toll Brothers officials know they’rse trying to sell a new brand and producrt in the region at a time when people are concernedx about their jobs and theoverall economy. Many buyersz are also reluctant to sell their existint homes today becausethey don’t believe they will get as much as the propertgy is worth.
The companh touts the quality of its homes as its mainsellinbg point. Some local contractors declinee to work for Toll because of the rigorous stipulationes inits contracts, said Jonathan Hove, senior projecgt manager. Every few weeks, someone from the corporate offic e visits all the construction sites to do athorough inspection. They check every detail, from the craftsmanship of the crown moldingf towhether there’s any dust on the boiledr in the basement, he The model home in Halfmoon has drawn an averag e of 20 visitors per week since it opened, Hove So far, three sales contracts have been signed.
The companty expects it will take four yearsd to sell and build all of the Toll Brothers sees the Capital Region as a safe harbo inthe nation’s stormy housing market. Althoughg fewer homes are selling median prices fell by only 1 percentlast “There are markets in the Southwest that have seen a 40 percent depreciation in values,” Hove said. Toll Brothers TOL) has been hit hard by the downturn. The companh posted its first loss infiscal 2008, $297.8 after 22 consecutive profitable The slower pace of sales has forced Toll Brothers to cut the numbert of developments it’s building.
The companuy expects to end the 2009 fiscal year with abourt255 developments, down 22 percent from a peak of 325 developments in the secondx quarter of 2007. Daniel Oppenheim of said in an analyst’s report that the sales environmentf in keymarkets “remains challenged” for Toll Brothers and that a recengt 3.99 percent mortgage promotion didn’t spur many