Luxury homebuilder Toll Brothers Inc. ($27.03 0%) returned to a profit in the second quarter with net income of $16.9 million, or 10 cents a share, thanks to increased confidence in the market and fewer cancellations.

The Horsham, Pa. – based homebuilder posted a loss of $20.8 million in the year-ago period, or a loss of 12 cents a share. The company also posted a first-quarter 2012 loss of $2.8 million, or 2 cents a share.

Last quarter’s losses, the hightest for any first quarter in five years, were largely a surprise, and the company reported the losses were due to fewer deliveries and increased cancellations. This quarter’s improvement comes as Toll Brothers reports greater recovery in Florida and in Phoenix, two of the hardest hit areas.

“It appears that the housing market has moved into a new and stronger phase of recovery as we have experienced broad-based improvement across most of our regions over the past six months,” said Chief Executive Douglas C. Yearley Jr. “Spring selling season has been the most robust and sustained since the downturn began.”

Analysts polled by Thomson Reuters had forecast earnings of 4 cents.

Toll Brothers delivered 671 homes in the quarter ending April 30, up 14% from 591 a year earlier. Backlog was at 2,403 units from 1,760 units from last year. Net signed contracts also jumped significantly, up 47% to 1,290 homes. The average price of those contracts was $585,000 up from $570,000 year-over-year. The cancellation rate, which is defined as cancellations divided by signed contracts, dropped 2.4% from 5.7% in 1Q 2011.

FY 2012’s second-quarter results included $2 million of pre-tax inventory write-downs and a $1.6 million recovery of prior joint venture impairments, compared to FY 2011’s second quarter pre-tax write-downs and joint venture impairments totaling $32.5 million. Revenue increased 6.4% to $695.6 million.

Toll Brothers’ stock has risen 32% so far in 2012, and closed Tuesday at $27.03.

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims and the GDP.

• Initial unemployment insurance claims continue falling down to record lows since the start of recovery.  New claims fell 5,000 to 359,000 for last week, while the four-week average is also down 3,500 to 365,000. A level of 400,000 is usually viewed by economists as suggesting improvement in the labor market with more job creations than job losses. The four-week average has been on a continual downward slope since September of last year. Continuing claims also fell by a significant 41,000 to 3.340 million. If the figure for new jobless claims remains at around 350,000, it would generally be associated with nearly 3 million net jobs created for the year.
• In a separate release, the Commerce Department released the final estimate of the 4^th quarter GDP, confirming the previous estimate of GDP growth at 3.0 percent.
• Year-over-year, the GDP increased 1.6 percent, compared to 1.5 percent in the third quarter.   We expect that GDP growth in the first quarter will have slowed to  about 2.0 percent.

Should the city of Holland prevent home owners from reducing the number of windows on the front of a home?

Some Realtors in the area have come together to say no.

In fact, they’ve likened the city’s proposed ordinances regulating exterior renovations of homes to a runaway train, said Dale Zahn, CEO of the West Michigan Lakeshore Association of Realtors

“The city may be going too far,” Zahn said, and people are expressing their concerns about that.

If you go WHAT Holland Planning Commission public hearing WHEN 5 p.m. today WHERE council chambers, Holland City Hall, 270 S. River Ave. ONLINE cityofholland.com

The Planning Commission discussed windows last month when the board learned of two homeowners on East 17th Street who had renovated enclosed front porches. City code enforcers were concerned by the remodels.

The two owner-occupied homes took what were three-season enclosed porches and reduced the number of windows, turning the rooms into extensions of the houses. Neither home appears to have a front porch now.

“A man’s home is his castle,” Zahn said, adding the homeowners in question didn’t do a bad job of renovating. “The homeowners bought the property and made the investment.”

There’s is no evidence that reducing the number of windows will bring down property values, he said.

The Planning Commission will conduct a public hearing today on the amendment to the zoning regulations that apply to certain “in-fill” districts within the city.

The proposed change is one piece of a more in-depth proposal that would allow the city to oversee many exterior renovations and modifications. Because that proposal met with opposition late last year from Realtors and homeowners concerned about personal property rights, it has been indefinitely tabled.

The amendment proposed now would require homeowners in the central city neighborhoods affected by in-fill rules to have changes to windows and doors reviewed. If approved, the rules would ban homeowners from reducing the number of windows.

Currently, the city doesn’t have the authority to do anything about windows and doors, Cindy Osman, assistant director of the Community and Neighborhood Services department, said in January.

The city’s responsibility is to “Keep (properties) safe, sound and sanitary and leave the rest up to the homeowner,” Zahn said.

Zahn questions the idea that a single member of city staff reviewing requests would know what is best for a neighborhood and should be the person to look at each home on case-by-case basis.

“What’s good looking and nice to one is not going to be to another,” he said.

Realtors are more in touch with what’s going on a city neighborhood and are better at marketing the city, Zahn said. The Realtors need the city, but the city needs the Realtors to promote and market the city also.

“It’s a two-way street,” he said.