Toll Brothers Inc. (NYSE: TOL) has been giving deeper-than-usual discounts during its "Toll Advantage Days" events at its developments around the country, where it offers what it calls "a behind the scenes look at our homes from start to finish." In other words, a sale. Deals include everything from additional hardware flooring to upgraded cabinets and appliances. Buyers may also find bargains on some lots and properties, such as those that Toll was forced to hold onto after a sale collapsed.
Kira McCarron, Toll's chief marketing officer, told PhillyInc that it was "reasonable" to assume that the offers would be better this year, given the state of the real estate market. "A few years ago, there probably were zero offers," she said.
Toll held "Toll Advantage Days" in Denver in April and now plans several on Sept. 29-30 in select spots, including New Hope.
Like other homebuilders, Huntington Valley, Pa.-based Toll is facing one of the worst real estate markets in recent memory. Reuters this week reported that sentiment among home builders fell for a seventh straight month in September. Speaking at a conference sponsored by Credit Suisse, Chief Executive Robert Toll said the current housing downturn is worse than others the company has experienced in 1980 to 1982 and 1987 to 1991, according to Reuters. His gloomy outlook takes into account the Federal Reserve's decision to cut interest rates.
Reuters quotes Toll: "Is this a turning point? Does anyone want to call this the bottom because of the Fed cut? I don't think you can call it yet." (Disclosure: The vice chairman of Toll Brothers is Bruce Toll, who is also is chair of Philadelphia Media Holdings L.L.C, which owns PhillyInc, The Philadelphia Inquirer, The Daily News and Philly.com.)
Other homebuilders also are having tough times. Orleans Homebuilders Inc. (NYSE: OHB), based in Bensalem, recently said it had an $11.3 million loss in the most recent quarter. A company spokesperson didn't return our call for comment.
Chief Executive Ara Hovnanian of Tolls' rival Hovnanian Enterprises Inc. (NYSE: HOV) of Red Bank, N.J., told the same conference where Robert Toll spoke that Hovnanian didn't expect the housing market to recover anytime soon. To that end, Hovnanian held what it dubbed the "sale of the century" last weekend, which the company claims was a huge success, Bloomberg News says.
Toll's McCarron says Toll Advantage Days is not a reaction to Hovnanian's sale. She pointed out the company has held these events for years. This time, though, the buyers are calling the shots more than they have in the past.
