Home Stretch

Article excerpt

Byline: Dan Gross

The housing market is making a comeback.

Until recently Douglas Yearley was among the many real-estate CEOs laid low by the housing crisis. Two years ago his company, Toll Brothers, produced a paltry 2,642 homes, far below the 15,000 they'd projected during the boom year of 2005. But last week he had an announcement: Toll Brothers, the past and future king of McMansions, is back.

"We are enjoying the most sustained demand we've experienced in over five years," Yearley said on Aug. 22, talking about his company's impressive earnings. Toll Brothers' home sales were up nearly 40 percent from the year before; its stock has risen 122 percent in the past year. And Toll Brothers isn't alone. Six years after the peak and despite the ongoing foreclosure and mortgage mess, there are undeniable signs that a sustainable recovery is underway.

The same day Toll Brothers published its earnings, the National Association of Realtors delivered a rare report in which the organization's natural boosterism was justified. Existing-home sales rose 10.4 percent in July from last year, while the price of a typical home climbed 9.4 percent. Compared with a year ago, there are now more first-time buyers, a smaller proportion of foreclosure sales, and less surplus inventory. Barring a collapse, 2012 is likely to be the first year since 2005 in which the number of homes sold and the price they typically sell for rise. …