Luxury homebuilder Toll Brothers is seeing "notable improvement" in North Carolina, another sign that the housing slump may be easing.
The Pennsylvania company reported a smaller quarterly loss Thursday morning, and executives painted a largely optimistic outlook, saying the simmering economic recovery will revive the market for high-end homes.
Toll's Triangle communities include Triple Crown Estates in Chapel Hill, Green Level Crossing in Cary, The Hills at Southpoint in Durham and Brier Creek Country Club in Raleigh. It also owns communities in the Charlotte region.
All the communities are seeing more traffic and contracts, said Tom Anhut, the company's Raleigh division president. Green Level, in particular, sold as many homes during the past two months as during the previous four months.
"My sense is we've seen the bottom," he added.
The Triangle luxury home market has been among the hardest-hit segments during the downturn, and the region has a glut of higher-priced homes on the market.
Just 91 new homes priced at $500,000 and above sold during the first three months of the year, down 32 percent from the same period a year ago, according to Market Opportunity Research Enter prises, a Rocky Mount firm that tracks Triangle real estate.
In this market, Toll traditionally has gotten up to half of its sales from non-local home buyers. That figure is now 20 percent to 25 percent, suggesting that fewer customers are moving here or that they're unable to sell their previous homes.
"They still have those chains around them, anchoring them back in Pennsylvania, New Jersey or wherever they're moving from," Anhut said.
Toll has been buying more lots and land in anticipation of rising demand. That includes paying $23.46 million for the majority of the Hasen tree luxury golf course community in northern Wake County, with 318 lots.
"We are very aggressively looking for more land," Anhut said.
Nationwide, the company spent $143 million buying land during the quarter that ended April 30, and ended the period with 33,600 lots owned or under option. That was up 6 percent from the previous quarter, the first increase in four years.
"We are seeing solid activity in many markets," Douglas C. Yearley Jr., 50, who will take over as CEO on June 16, said in a prepared statement.
Yearley will replace Robert I. Toll, 69, who has run the company since it was founded in 1967.
"It appears our business has finally emerged from the tunnel and into a bit of daylight," Toll said. "We don't expect housing to roar back right away."
The company's optimistic outlook is notable because sales of high-end homesweren't given much of a boost from the federal homebuyers' tax credit. The company's average home sale price was $567,000 during the latest quarter.
"We believe the past few months' activity has been driven by an increase in confidence among our buyers in their job security, their ability to sell their existing homes and general trends in home prices," Toll said.
For the quarter, the company's loss narrowed to $40.4 million, from $83.2 million a year earlier. Revenue fell 22 percent to $311.3 million.
Toll's shares rose 17 cents to close at $20.78 Thursday and are up 11 percent this year.
Staff writer David Bracken contributed to this report.
