Toll Brothers' Posts Declining Homebuilding Revenue

Updated from 9:42 a.m. EDT

Toll Brothers TOL said Tuesday contracts for new-home sales fell 44% in its latest quarter, and the luxury builder acknowledged that the all-important spring selling season was "quite weak in most markets as buyers remained on the sidelines."

On a positive note, Toll's preliminary revenue estimate for the second quarter was $818 million, better than the $753 million that analysts expected, according to Thomson Reuters. Revenue, however, was down 30% from a year earlier.

The company's CEO, Bob Toll, once again blamed the media's focus on declining home prices as a reason for homebuyers' lacking confidence.

"We believe there is significant pent-up demand which is growing," Toll said in a statement. "When we have held promotions, buyers have come out to play and put down deposits. Often, however, a lack of confidence in the direction of home prices overcomes their enthusiasm and they don't take the next step of going to contract. They, like all of us, read the papers and watch TV, both of which keep advising them that home prices are declining."

The average price of new contracts signed in the quarter was $590,000, down from $711,000 a year earlier.

Higher incentives offered for homes, along with a larger percentage of adult and lower-priced communities, drove down the average price, Toll said.

The company will report final results June 3. Toll shares were down 64 cents, or 2.7%, at $22.73 in recent trading Tuesday.

In separate but related news, the latest data from the National Association of Realtors, released Tuesday, shows the median price for a single-family home in the U.S. was $196,300 in the first quarter, down 7.7% from $212,600 a year ago.