Toll Brothers, other builders stock up on cheap land
The 12 largest U.S. home builders added 14,214 lots to their inventories in the first two quarters of this year.
Part of Toll Brothers' new CEO Douglas Yearley Jr.'s strategy is to purchase land at low prices while demand for new homes is sluggish.
Toll Brothers has spent $250 million on land so far this year, the first purchases since 2006. Purchasing property cheap will raise the margins when the homes are sold.
"Our shareholders will be better served by this company growing through acquiring more land at today's prices," Yearley says. "When you get it, it's gold."
Toll Brothers aren't alone in taking this approach. The 12 largest home builders together added 14,214 lots to their inventories in the first two quarters of the year.
Source: www.realtor.org
Source: Bloomberg, John Gittelsohn (08/24/2010)
