Since the recent economic troubles, home building projects have slowed as many individuals are obviously uncertain about what the future holds for their real estate investments. Now, it is apparent that according to the luxury-home building firm, Toll Brothers, this Spring of 2012 represented their best performance for selling homes in any Spring market over the past five years.
With a profit of $16.9 Million accounting for a $0.10 increase per share, Toll Brothers’ first quarter of this year far and away out did the previous years first quarter. The same corresponding months for 2011 had Toll Brothers with results that saw them realize a loss of $20.8 Million, representing a $0.12 decrease per share. Moreover, this year their revenue also jumped 17% to $373.7 Million for the first quarter.
A Pensylvannia-based Toll Brothers revealed a 51% boost in signed contracts that correlates to 1,290 units totalling $754.7 Million. Furthermore, deliveries were up as well by 14% to 671 units and of these net signed contracts the average price per unit was fairly consistant with the first quarter of 2011, holding at or around $585,000.
The past six months is where the most drastic housing recovery improvements have occured. As the first quarter came to an end, it was found that Toll Brothers had a backlog of 2,403 units that are worth $1.5 Billion. This ultimately is a rise of 37% in units and 49% in total dollars when compared to the final calculated results from the same first three months of 2011.
So what does the CEO, Douglas Yearley Jr., feel is the main reason for such an optimistic turnaround of late? Much of it can be drawn from the historically low mortgage rates and the lack of inventory in the market. Toll Brothers shareholders are also seeing their stock up by roughly 30% so far in 2012 as well largely because of these two factors. Evidently, things in the Real Estate business are picking up and only look to continue to press on as we go forward this year and for years to come.
More Information: Fox Business