Toll Brothers Home Builders- crushed earnings

[GON]

Toll Brother Builders, one of the better respected/ managed new home builders in the USA crushed earnings, beat by about $1 per share. Toll Brothers stock is up over seven percent today.

If Toll Brothers is any indication of the housing market on a MACRO scale- the housing market itself remains strong. It should be noted Toll Brothers new home contracts are down 60 percent this month.
The luxury homebuilder reported an increase in profit to $640.5 million, or $5.63 per share, compared with $374.3 million, or $3.02 per share, a year ago. Analysts polled by FactSet expected $4.01 per share. Net income in the quarter includes a $138.4 million net pre-tax benefit, primarily related to the settlement of claims associated with a natural-gas leak that occurred in Southern California in late 2015.


REVENUE: The company said revenue increased to $3.71 billion from $3.04 billion a year ago. Analysts expected revenue of $3.17 billion. Home sales revenue, which represents a majority of total revenue, increased 21% to $3.6 billion.

https://www.marketwatch.com/story/t...arnings-review-271670364356?mod=mw_quote_news

 

[jhellwig]

Not to poop on your parade but…. https://news.yahoo.com/homebuyers-underwater-mortgage-203707947.html

Guess it just depends on the news source.

 

[CarLuver]

i bet a lot of those contracts were in the pipeline already . it takes months or years to do a development. a friend of mine was planning a high rise apt in 2005. by the time permits etc it was 2008 and he lost everything.

every realtor and mortgage person i personally know is hurting now .

 

[RhondaHonda]

Toll Brothers gets paid at closing so most of this revenue is from spring and summer housing starts. Buyers had signed contracts and the market hadn’t slowed much. I’m curious what the next quarter shows.

 

[GON]

Toll Brothers gets paid at closing so most of this revenue is from spring and summer housing starts. Buyers had signed contracts and the market hadn’t slowed much. I’m curious what the next quarter shows.

I think the stock being up seven percent today suggest what's ahead earnings wise for Toll Brothers. Toll Brothers provided future guidance in their earnings release.

 

[Warstud]

Wait till next year

 

[GON]

i bet a lot of those contracts were in the pipeline already . it takes months or years to do a development. a friend of mine was planning a high rise apt in 2005. by the time permits etc it was 2008 and he lost everything.

every realtor and mortgage person i personally know is hurting now .

"every realtor and mortgage person i personally know is hurting now ."

They shouldn't be hurting. They are in a commission business and made five to ten time their typical earnings in the past 24 months. If they banked their money- they should be just fine for quite a while. If they blew the record monies realtors and mortgage brokers made over the past 24 months- no tears shed.

My realtor in Utah made well over a million dollars in commissions over the past 24 months. She typically made about 50k per year in commissions.

 

[demarpaint]

Wait till next year

+1

 

[GON]

Not to poop on your parade but…. https://news.yahoo.com/homebuyers-underwater-mortgage-203707947.html

Guess it just depends on the news source.

Not my parade at all- I am a cash buyer waiting on the sidelines with a trigger to buy if single family home prices hit JAN 2019 levels, which were already very lofty prices, well ahead of what they should have been. I study home prices like a hawk- and have not seen a single indicator of any fall in home prices. The article on Yahoo you posted in clickbait IMHO. I can't find a single example of a home that was purchased in JAN 2022, that would sell at a loss today (before commissions).

Of note. I sold a home in AUG 2022 for $450k. In SEP 2022 the home on-line showed a value on $455k, in OCT 2022 the home showed a value of $459k. In DEC 2022 the home shows a value of $457k. The webs-ye also shows the home is down $2k (in the red). How false. The homeowner bought from me at $450k in AUG 2022. Any value above 450K is green for the homebuyer. Yet at $457k the internet says the homeowner lost $2k.

 

[PimTac]

i bet a lot of those contracts were in the pipeline already . it takes months or years to do a development. a friend of mine was planning a high rise apt in 2005. by the time permits etc it was 2008 and he lost everything.

every realtor and mortgage person i personally know is hurting now .

This is correct. There is a lag within the sectors. As home sales start to drop and prices go down it takes a while before the home builders can adjust to the news. This applies to the well established builders. Those that were on shaky ground before this will just abandon projects.


The lag has to be considered in many things in the financial world. Higher interest rates do not show their full effects for a while.

 

[JMJNet]

Not my parade at all- I am a cash buyer waiting on the sidelines with a trigger to buy if single family home prices hit JAN 2019 levels, which were already very lofty prices, well ahead of what they should have been. I study home prices like a hawk- and have not seen a single indicator of any fall in home prices. The article on Yahoo you posted in clickbait IMHO. I can't find a single example of a home that was purchased in JAN 2022, that would sell at a loss today (before commissions).

Of note. I sold a home in AUG 2022 for $450k. In SEP 2022 the home on-line showed a value on $455k, in OCT 2022 the home showed a value of $459k. In DEC 2022 the home shows a value of $457k. The webs-ye also shows the home is down $2k (in the red). How false. The homeowner bought from me at $450k in AUG 2022. Any value above 450K is green for the homebuyer. Yet at $457k the internet says the homeowner lost $2k.

You lost 6% of the top of the price when selling paying realtor commisions?

 

[GON]

You lost 6% of the top of the price when selling paying realtor commisions?

JMJ,

Not sure I understand your question?

 

[JMJNet]

Do you have to pay the realtor 3% for seller agent + 3% of buyer agent so whatever the price, it will reduce by 6% to the seller?
That is the way when I sell my house.
Plus a lot of other fees.

So, a house have to appreciate around 10% before at least break even.

 

[GON]

Do you have to pay the realtor 3% for seller agent + 3% of buyer agent so whatever the price, it will reduce by 6% to the seller?
That is the way when I sell my house.
Plus a lot of other fees.

So, a house have to appreciate around 10% before at least break even.

Correct, I use use gross sales numbers. Not net numbers.

 

[samven]

These past 12 years have to be the only time in history when people expected to have equity in a home they just bought and are already planning a refi to take it out. In 45 years of home ownership I have never once worried about being under water for a few years but maybe thats because I bought for a place to live and not a fast flip.
Wait for a repeat of the 80's when interest rates were 15% and try to build any equity.

 

[Dave Hess]

This is correct. There is a lag within the sectors. As home sales start to drop and prices go down it takes a while before the home builders can adjust to the news. This applies to the well established builders. Those that were on shaky ground before this will just abandon projects.


The lag has to be considered in many things in the financial world. Higher interest rates do not show their full effects for a while.

You took the words of out my mouth.

Next year will be very interesting and bad news lags for 6-9 months.

 

[pbm]

It seems to me that the 'American Dream' of home ownership is out of reach for most young Americans these days. If a young couple is fortunate enough to be able to buy a home they usually have to put off having children to make it happen (2 incomes are needed). That's not a very promising scenario for America's future IMO.

 

[SC Maintenance]

Toll Brothers provided future guidance in their earnings release.

I wonder what their future guidance was in December of 2007?

 

[daves87rs]

These past 12 years have to be the only time in history when people expected to have equity in a home they just bought and are already planning a refi to take it out. In 45 years of home ownership I have never once worried about being under water for a few years but maybe thats because I bought for a place to live and not a fast flip.
Wait for a repeat of the 80's when interest rates were 15% and try to build any equity.

This. Homes were really never meant to make money. Just be lived in.

The really sad part about this new fall is going to be that Wall Street will cash in on these homes (rent for profit) rather than normal folk……

 

[alarmguy]

This. Homes were really never meant to make money. Just be lived in.

The really sad part about this new fall is going to be that Wall Street will cash in on these homes (rent for profit) rather than normal folk……

Its a cycle, increases and falls.
It's nothing unusual, supply and demand. It's the way the world works, the entire world. The selling price of anything is what the public is willing to pay which normally means what they can afford.

Low interest rates = higher selling prices
High Interest rate = Lower selling prices
The payment is the same, homeownership hasn't changed and that should say something about the people who feel cheated in life that they need to look at what they are doing wrong. (not to sound cold, its just fact)