He cited metro Washington, DC in particular as one of severalmarkets, "that are sound economically but will need to work throughtheir excess supply before the imbalance once again tips in ourfavor." As for his own company, he added, "sales remain constrainedat the many communities we have with backlogs of 12 months or more.We are optimistic that as these backlogs are reduced and newcommunities are opened, sales should improve."

For the quarter ended Jan. 31, net income for the locally basednational homebuilder rose 49% to $163.9 million and revenues wereup 35% to nearly $1.4 billion, compared with the same quarter theprevious year. For the most recent quarter, the company's backlogrose 22% to almost $6 billion, but signed contracts declined 21% tojust above $1.1 billion.

It is on the basis of this data and precautionary signals Tollhas been announcing since late 2005 that the company reduced itssales expectations by 300 homes for this year. Its 2006 guidancenow calls for sales of between 9,200 and 9,900 new homes this year.While lower than anticipated at midyear 2005, the current 2006projection exceeds the 8,769 homes sold by Toll in fiscal '05.