The Quotable Toll

From Tuesday's Conference Call with Robert Toll:

"Interestingly noted, and perhaps specific to Toll Brothers, our regional presidents in a number of markets report that our customers are not concerned about the potential for declines in home prices and our communities. Rather, customers seem very concerned about selling their existing homes.
. . .
The reason we know is when we hold a special, any gag will do as long as we can work the phones, bring project managers, assistance vice presidents to make phone calls to the backlog of people to the list of people that have visited a community, we can bring them out in tremendous number and we can sell a great number of homes.

The problem as I said in the monologue is that they go home, they think about it. Our guess was that in top management, we thought most of them were electing not to go further, they cancelled the deposit and get their money back because they go to their friends and neighbors and say we just bought a new home and everybody says what are you crazy, prices are dropping.

But I’m advised by my regionals who read the release and called me and said you know, as big a problem if not a bigger problem is the fear of selling because we’re a luxury move up provider. Their fear of selling their existing home, and that’s causing them to have second thoughts and cancel.
. . .
So we did this a couple of weeks ago for instance in Maryland and DC and we had like five, six times the ordinary turnout that we would get and they deposited. And we got a tremendous number of deposits. So that’s an indication that they’re there but they’re scared for either reason, falling prices or inability to sell their old home.
. . .
In the Mid-Atlantic states, Pennsylvania, Philadelphia suburbs are now a C minus. Poconos are an F minus. Delaware is a D. Maryland shore, the beaches, still an F minus. Washington DC, Maryland, we rate now at a B plus.

Virginia at a C plus, but you need to produce apparent bargains to bring them out to make Northern Virginia work. West Virginia, just in the last four weeks has been a B minus but I wouldn’t go invest in West Virginia just yet. North Carolina, Raleigh, in the South, Raleigh is a C minus, Charlotte recently has turned into an F minus".