Abridged keynote address by Toll Brothers CEO Douglas Yearley
at the 2017 National Assn. of Real Estate Editors convention
A couple weeks ago, I announced that it was the best spring selling season our company had in over ten years.
We are the only luxury builder that has a nationwide footprint. We operate in 20 states, 50 markets nationwide. We have about 25% of our business out in California…we’re in Arizona…Reno and Las Vegas.
More than 50 percent of our business is done in the West. It’s where the jobs are, it’s where the sun shines, it’s where the lifestyle’s better…that’s where you’re going to see the growth. That’s where all the builders are focused. That’s where the land is available and it’s where people want to live.
(Boomers) drove our business for years, as they were moving up into the suburban move-up house; and they are driving our business today, as they are moving down. They’re buying into the active-adult community…they’re buying second homes in Palm Springs, in Florida, in Scottsdale, Arizona.
We went from 2 million houses a year to 500,000, so labor left the industry and it’s taken a long time to get that labor back. As we get further into a recovery, we’ve had more workers come back; we’ve got subcontractors that have been able to ramp up their businesses. We’re still feeling cost pressure, but it is definitely less now than it was a year or two ago.
Whether you’re buying one house or you’re buying a master-planned community, it’s all about the land, right? We have to be much more creative in how we buy land and how the housing market will be growing. Not only because of the demands of the buyer…because they want to live in a more connected, tight community…but also because of the limitations of the old days, of just going out and buying the next farm.
Related story: Toll Brothers home builder looking for new lots… – The Denver Post (June 14, 2017)