'Best Spring in Five Years' for Housing: Toll CEO
Special to CNBC.com
There are "encouraging" signs the high-end housing market is recovering in many U.S. markets, Toll Brothers CEO Douglas Yearley told CNBC Tuesday.
It's been the "best spring in five years," he said. In 2012 "our orders are up significantly and continue to be up significantly. I'm optimistic right now."
The average price of a Toll home is $575,000.
Yearley spoke the same day homebuilder Lennar reported first-quarter earnings that beat expectations, a sign to some analysts that the housing market is recovering.
The Toll Brothers CEO said that's true for some markets but not for others. He said that "25 percent of our communities have seen a price increase since Jan 1. That’s encouraging. There are places where we don’t have pricing power (but) we’re not dropping prices. We haven’t dropped prices in over a year."
Here's how some regions are doing:
In New York, Toll has "huge pricing power. We’re raising prices every week," he said, adding the company is diversifying into the urban high-end high-rise market including properties in parts of New York and Brooklyn and Hoboken.
In the corridor between Boston and Washington, D.C., which did not have the overhang from foreclosures and where Toll does 60 percent of its business, the market is strong, land is hard to find and "we have pricing power in many of those local markets."
Phoenix is hot for housing, having gone from 14 to 16 months of supply down to four or five months. "In the last month, Phoenix is back in a big way," Yearley said.
So is California — both the northern and southern parts of the state — where it's also hard to find land, he said. The Carolinas, including the Raleigh area, are doing quite well as is the second-home market in Florida, which he said is "beginning to come back and we haven’t seen that in five years."
Texas is booming, but the midwest, as well as parts of Nevada such as Las Vegas and Reno, are not, he said.
"We're bumping along the bottom in certain locations but we're clearly off the bottom in other locations," Yearley said.