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The New York luxury-housing market is moving more slowly than Toll Brothers wants. 

Nationally, the market for high-end homes doesn’t look weak, CEO Douglas Yearly said during an earnings call Tuesday. That optimism comes even though there was a slowdown in California amid what the company said was a temporary lack of inventory. 

But New York is the big exception. 

America’s largest luxury homebuilder reported its quarterly results Tuesday, beating estimates for revenues and earnings.

It benefited from strong demand, which, along with tightening inventories, is helping to push up prices. That’s a refrain that several other homebuilders have sounded throughout this earnings season. 

During the earnings call, Yearly disagreed with an analyst’s concern that the luxury market may be slowing down because of a possible shortfall in the number of buyers relative to sellers.

But CFO Martin Connor chimed in to explain why the one exception to the positive market trend might be New York. 

Here’s an excerpt from the company’s earnings call:

I took the opportunity to mention that in the New York market, we have four buildings, five buildings, where the average price of units still to be sold is less than $3 million. I’m looking at averages that are $1 million, $1.4 million, $1.8 million, $1.9 million. And then one building with $3.5 million. Then we do have the building at 1110 Park where we have four units left in the high end market. But the rest of our product in New York skews to the mass market, middle market, rather than the ultra high end. 

In short, based on the $3 million watermark, several units are not selling as quickly as the company thought they would. And this diverges from the national trend.

There was reason to be concerned about the high end of the market, according to Erik Oja, an S&P Capital IQ analyst who covers homebuilders. 

He told Business Insider that as China’s economy recently slowed down and there were fewer foreign buyers, “people worried that if they leave, that will be a lot of trouble for the high end” of the market. 

But Toll Brothers’ overall earnings results were a relief; the company’s shares rallied 8% Tuesday. 

If luxury markets in New York and California slowed down, “that would really hurt,” Oja said. 

SEE ALSO: The largest US luxury homebuilder crushed earnings but acknowledged the big problem in the housing market

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