Toll Brothers (luxury home builder) earnings drop by 85%

Toll Brothers earnings drop by 85%
By Daniel Pimlott in New York

Published: August 22 2007 11:42

Toll Brothers’ chief executive on Wednesday said the company was seeing the highest rate of cancellations on orders for its luxury homes for more than 20 years, as he revealed third quarter earnings had fallen 85 per cent.

“During this downturn, we have experienced a much higher rate of cancellations than at any time in our twenty-one-year history as a public company,” said Robert Toll, who set up the company in 1967.

He also warned that the global credit crunch which has hit financial markets in recent weeks could further exacerbate the weakness in US housing by making it more difficult for home buyers to secure mortgages. “Tightening credit standards will likely shrink the pool of potential home buyers,” he said. “Mortgage market liquidity issues and higher borrowing rates may impede some customers from closing, while others may find it more difficult to sell their existing homes.”

Home builders have been hit by the fall-out from rising defaults on subprime mortgages, which are loans to people with sketchy credit histories. More stringent requirements for loans, higher interest rates and falling interest in buying houses have compounded the problems for the housing industry.

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http://www.ft.com/cms/s/0/16fc00d2-509b-11dc-86e2-0000779fd2ac.html

I despise these big developers who wreck neighborhoods, take the money and run.

Those quarters add up!

Toll Brothers are well known creators of the monstrosities known as McMansions around the country. Basically huge particle board pieces of shit. Their business should be down because of shoddy construction standards as much as the mortgage system.

We toured one of their "developments" that pretty much destroyed a nice greenspace and couldn't believe the garbage they were passing off to people as houses.

The dump they called a "show home" was built in a matter of weeks and contained so many basic flaws we quit counting on the first floor. Carpet was peeling up, paint was already cracked, gaps in the kitchen counters and cabinets that my father would have fired the installers for back in "the day".

The most galling part is that they actually had the audacity to ask almost $500,000 for a place built without the "options" they asked you to add on.