Toll Brothers is making difficult decisions and making it work
I’ve previously mentioned Toll Brothers as a company that seems to see the forest for the trees. This BusinessWeek article reaffirms my impression.
Considering the challenging environment, Toll Brothers seems to be making all the right movesâ€â€?but what are they? For one, Toll Brothers is simply doing what homebuilders should do, considering the glut of homes on the market now. “We believe that reducing new-home production until the current oversupply is absorbed is a key step in bringing housing markets back into equilibrium,” Chairman and Chief Executive Officer Robert Toll said in a statement.
Now that doesn’t seem so difficult to me, but given the machine that is a public national homebuilder, cranking back production is apparently a whole lot harder than you would think. BW goes on to point out a few other things working in their favor: Toll Brother’s build to suit strategy (they’ve got contracts before the break ground), and “fewer than 2% of their inventory falls into the subprime category.” Add into the mix an unwillingness to accept loose contracts, and they’re looking pretty good, all things considering.