Everyone got really excited about US housing last year. After years of rising foreclosures and plummeting prices, investors gave an all-out standing ovation to signs that the market was finally bottoming. Homebuilders were big beneficiaries – their subset of the S&P 500 doubled. Pity that Toll Brothers, the US luxury homebuilder, whose shares gained 58 per cent in 2012, on Wednesday missed analysts’ forecasts in its fiscal first quarter ending January 31, even though it swung to a profit of $0.03 a share. Deliveries were shy of expectations and the average price of the homes it sold declined slightly. The company pointed to increasing demand but the shares still dropped as much as 9 per cent. That is the problem with high expectations. It becomes far easier to disappoint.

The recovery story for housing in the US is based on three main drivers: low inventories (new, high-end homes such as those Toll Brothers builds are seen as a different market from the bombed-out foreclosed properties that are the casualties of the boom-bust); low interest rates and stabilising prices. Also, the number of houses being sold is still historically low. In 2012, Toll Brothers closed on 3,286 homes, 26 per cent more than the previous year, but in line with levels in the late 1990s and far below the peaks above 8,000 during the last decade.

The housing recovery will be long with fits and starts, especially with concerns about unemployment and the availability of cheap credit beyond the best borrowers. There is also the question of what “normal” sales will ultimately look like; some expect more Americans to favour rentals, for example. At $34, Toll Brothers trades at 13 times analysts’ earnings forecasts of $2.53 for 2015. It’s not outrageous but sales have to jump to $4.7bn, up 150 per cent from 2012 and not far from the $6.1bn peak of 2006. That’s pretty enthusiastic.

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