While market reports continue to point out softening in luxury condo sales, at least one company is skeptical of a slowdown.
“We don’t agree that there’s weakness at the high end,” said Douglas Yearley, the CEO of Toll Brothers, said during a recent earnings call.
“We don’t have buyers coming in that are looking to negotiate. We are very comfortable with the business. There are plenty of buyers, and we love the luxury end.”
Yearley’s comments come months after his firm chopped the price for condos in 400 Park Avenue South and 110 Park Avenue.
“These are very expensive units, and therefore there are less buyers out there,” Yearley told the Real Deal last December.
“We will not fire-sale it, we don’t think that’s smart business and it’s not necessary, but we will price to the market.”
Bob Toll, the company’s executive chairman, put an asterisk on Yearley’s statement, noting that most of the properties in their New York City portfolio fall into the “mass market” price of $3 million and under.
“In the New York market, we have four buildings, five buildings where the average price of units still to be sold is less than $3 million. I’m looking at averages that are a million, a million four, a million eight, a million nine, and then one building with three and a half million, and then we do have the building at 1110 Park where we have four units left that is in the high-end market, but the rest of our product in New York skews to the mass market, middle market, rather than the ultra high end,” he said.
Yearley offered an equally rosy assessment of the flow of foreign capital to New York City real estate projects, saying that foreign buyers continue to account for a significant portion of his company’s contracts.
“We have not seen any significant change in the appetite of foreign buyers in California or in our New York City high rise projects. The two Markets where they are most prevalent. Foreign buyers still represent about 15% to 20% of our California buyers and 10% to 15% of our New York City buyers,” he said.
Toll Brothers reported a 31.2 percent year-on-year increase in income for the second quarter.
During the period, the company reported home building deliveries of 1,304 units with an average price of $855,500, up from $713,500 from last year.