There is always next year...

Toll Bros. CEO: Customer Traffic 'Worst We've Ever Seen'
May 13, 2008: 03:40 PM EST
DOW JONES NEWSWIRES

The housing market is improving in some areas of the country though "there is no indication that the end [of the downturn] is in sight," Toll Brothers Inc. ( TOL) Chairman and Chief Executive Robert I. Toll said Tuesday.
In a conference call after the luxury-home builder released preliminary results of its fiscal second quarter, Toll said home sellers seem to be more worried about whether they can sell their homes than about declining prices.
In its release, Toll Brothers said the average price of contracts signed in the quarter was $590,000, down from $711,000 a year earlier and $634,000 in the fiscal first quarter.
Robert Toll said current customer traffic is "the worst we've ever seen," but noted that potential buyers are well-qualified, with an average credit score of 747.
Asked for evidence of pent-up demand for homes, Toll described the company's recent efforts to sell homes in the Washington, D.C., area, which included many phone calls by salespeople and deals on prices. He said the number of customers who turned out to look at homes was five or six times the usual number and some signed contracts.
"They're there but they're scared," Toll said.
His best news was that Toll Brothers has almost eliminated its backlog of speculative homes, those built without a contracted buyer, in western Florida, and it recently raised home prices in Naples, Fla.
"That was a huge event," he said.
Offering to rate regional housing markets in the 21 states where Toll Brothers builds, the CEO gave Connecticut and the counties north of New York City a B- plus, New Jersey an average of C, the Philadelphia suburbs a C-minus and Delaware a D. F-minuses went to Illinois, Minnesota, the Poconos area of Pennsylvania, the Maryland shore, Atlanta, the Charlotte, N.C., area and the Hilton Head, S.C., area.
Toll rated Las Vegas F-minus-minus, saying the company simply can't sell homes there.
Earlier Tuesday, Toll Brothers reported a 30% drop in home-building revenue and said that with weak market conditions and challenging times ahead, it expects pretax write-downs of $225 million to $375 million.
Net signed contracts declined 44%, while cancellations fell 20% and Toll's backlog fell 50%.
The company is expected to report fiscal second-quarter results June 3.
Toll's shares traded recently at $23.19, up 18 cents, or 0.7%.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com
(Saba Ali contributed to this report.)