As a result, the luxury homebuilder "is in a substantial cutbackmode," Toll said during a conference call. "Before the obviousdoldrums, we were hiring and training for continued expansion. Now,it is obvious we will not see expansion for a year, two at most."The hardest hit areas are in the Mid-Atlantic, Midwest andCalifornia markets. Revenue rose in the Northeast, Southeast andSouthwest.

The company anticipates delivering between 8,600 and 8,900 homesthis year at an average price range of $685,000 to $690,000. For2007, it projects from 7,000 to 8,000 home deliveries at prices ofbetween $635,000 and $645,000. The price reduction is attributed tomore sales of lower-priced and smaller multifamily, active adultand single-family units.

Toll conceded that the bottom of the market is not yet in sight,but reiterated a belief that "when buyers become confident thathome prices have hit bottom, the market will return to a firmfooting." He blamed the downturn largely on an oversupply ofinventory and steep discounts by builders, conditions that causeconsumers to sit on the sidelines.