Burning Through the Backlog

Toll Brothers gave the first indication about how the housing market fared in October (horribly). Net orders for their quarter ending 10/31/06 were down 57.56% nationally year over year. The order decline was worst in the previously hot Southeastern region, -77.8%.

Toll traditionally kept about 1 year's worth of orders in backlog, so it has taken a long time for closings to decline substantially. Profits remain strong for now, but they'll fall going forward as closings follow orders and backlog down: