Jeff Ostrowski
Alexandra Clough
Home > Real Time > Archives > 2008 > February > 08 > Entry
Toll Brothers ask: Et tu, Wendy?
Pity the Toll Brothers, Robert and Bruce. Sales and profits at their Pennsylvania-based company are tanking. Shares are down from a high of $58 in 2005 to $21 now. Buyers of their Florida homes are canceling in droves.
And now, Bruce’s own daughter has backed out of a deal to buy a $2.5 million condo at a Toll Brothers project. Toll Brothers disclosed the cancellation today in its proxy.
“The Company entered into an agreement of sale to build and sell a condominium to Wendy Topkis, Bruce E. Toll’s daughter, and her husband for a purchase price of $2,468,075,” the proxy says. “In January 2008, the buyers informed the Company that they did not intend to make settlement on the condominium. The Company intends to pursue its rights under the agreement of sale.”
Toll doesn’t give the location of the condo, but Bloomberg reports that it’s somewhere in Florida. We’ll guess it’s Ocean’s Edge at Singer Island in Riviera Beach, which just completed construction and offers units in that price range. However, a Toll employee there said he knew nothing about Topkis backing out of a condo at the tower.
Maybe Wendy read one too many newspaper articles about the real estate market. Uncle Robert last year blamed the media for the downturn in home sales, saying consumers “have read one too many Times articles and decided now is not the time to buy a home.”
Permalink | Comments (9) | Categories: Jeff Ostrowski
Comments
By Curious
February 8, 2008 6:28 PM | Link to this
Campy article, Jeff!
Things, however, are tough all over.
In the meantime, I have been told that Linda recently married well and no longer has to endure that ghastly ink on her hands?
Cheers!
By Curious
February 8, 2008 7:42 PM | Link to this
Is this ever true …
Buried heads in the sand unite!
http://money.cnn.com/2008/02/07/news/economy/homeowners_views/index.htm
Cheers!
By Mary
February 9, 2008 7:14 AM | Link to this
Every potential buyer seems to be sitting on the sidelines waiting for the bottom to hit. If it continues, we’ll start to see more panic selling by those forced to relocate due to job transfer or those who have no choice financially but to sell. The last two times I saw anything this bad was in the early 80’s when interest rates were 15% or more and people couldn’t afford to buy or after the oil crisis in the south and southwest when people were just walking away from their houses. I’m beginning to think that the end of this mess isn’t near term. We may be years away from a correction as the Merrill report indicates; not good news for us sellers. The builders are in big trouble as the only apparent way out of this is the reduction in supply.
By Kerry
February 9, 2008 7:31 AM | Link to this
Approximately half of these so called “potential buyers” are investors.
The few homes being purchased now is pretty much the REAL market.
If this REAL market had been kept consistent instead of giving anyone who could breath and make an X on paper, we wouldn’t me in this mess.
By WIle E. Coyote
February 9, 2008 4:44 PM | Link to this
Wile E. Coyote runs off the cliff of the American economy, looks down to find nothing beneath him, and then begins to hurtle toward earth.
Our Wile E. Coyote’s on this blog are quite similar, except all the way down they yell: house prices are droppiiiiiing!
Again, the true fools here, like the doomer regular who calls himself “Mary,” are oblivious to the economy, about which they understand nothing. They can at least identify a house, so they keep talking about house prices, while the rest of the economy disintegrates under them.
The U.S. economy can not survive with 2 billion a week being dumped in Iraq. The few billion we could face in mortgage bailouts is peanuts.
To anyone stupid enough to still be talking about house prices while your country’s economic system collapses: enjoy the ride down.
By Victor DeFrisco
February 11, 2008 9:33 AM | Link to this
Dear Jeff,
I have never seen so much negativety on a subject in my life. Fact is the weather is still great, mortgage rates are at an all time low, prices have rolled back to 2002-2003 levels, and taxes and insurance rates are slowly decreasing.
The problem with the market is the media. The media loves bad news. The media drove the market in the frenzy and is driving it now. This is a great time to buy but people read the paper and see prices are still falling, they wait, and this allows prices to drop more. The smart money is buying now.
Here is a fact for you. For many years the average number of homes sold was 4.5 million nationally. All of a sudden with all the media hype on how everyone was getting rich in the real estate market every new development was like the next IPO. All of a sudden in 2005 the 4.5 million went to 7.1 million, a banner year. Followed by 6.48 million in 2006. Her comes the media, sharp declines in home sales. That’s it scare the people. 2007 we were back to 5.66 million, still above average, a healthy correction. But you guys played it as another sharp decline, not the correction that the market needed. We are where we need to be now but people are afraid to buy because of the negative media that never tells the whole story.
By Get in the Game
February 11, 2008 12:27 PM | Link to this
Not bad Jeff…
You just made CNBC with your article
By Mary
February 11, 2008 1:47 PM | Link to this
Victor writes “This is a great time to buy but people read the paper and see prices are still falling, they wait, and this allows prices to drop more. The smart money is buying now” If prices are falling, wouldn’t it make sense to wait, assuming you can, and not buy now? This is in fact what has been happening. I think the problem is that we still haven’t gotten to the 2002/03 levels yet, Victor. Many of us and I’ll include myself in that group, have difficulty seeing our paper equity dry up. However, I would agree with Victor that the real estate news is all negative and that this contributes to the problem…and Wile, this is a real estate blog. If you want to write about the state of the economy and discount what is occurring in the real estate market, knock yourself out.
By RCA
February 11, 2008 2:34 PM | Link to this
Do I think Lenders have changed their stripes? Not yet if this is an example of what is going on.
I checked on a condo sale I found in the Miami Herald today. Manuel paid $490,000 ($385 per square foot) in January ‘08 for a condo on the 5th floor. He financed $465,500 with a 30 year mortgage from HSBC Mortgage Corp.
There are at least 13 foreclosures in the building (condos owned by various banks). I only checked on about 84 properties out of 352. I am sure there are more. I did find one property that went for $325 a square foot but the price our buyer paid does seem to be somewhat in the ballpark price of what is selling in this particular building (the low floor of Manuel’s unit is a concern). Note this high-rise does a have a very bad view corridor on one side, overlooking an overpass, so I would expect fluctuations depending on view.
The seller bought this 1,271 square foot, 2/2 in ‘06 (it appears to be pre-construction) for $369,000. So the seller did really good in a bad market: A $121,000 profit by selling to Manuel at $490,000.
What disturbs me about my research, Manuel only put $25,000 down, a bit more than 5%. I would say the banks/lenders are still rolling the dice. This condo property could easily drop another 5% to 20% in this market and it wasn’t exactly a bargain.
Also it appears Manuel also owns an additional property, purchased in 10/06 for which he paid $178,525. He holds two mortgages on that property totaling $178,505. Just about 100% financing. Thus, this owner is holding a debt of about $644,000 with the 3 mortgages. I compared signatures, and all 3 mortgages are to the same person. I wonder if HSBC checked?