For luxury builder Toll Brothers, the sagging housing market presents the classic "is the glass half-full or half-empty" question.

Certainly, the Horsham, Pa.-builder is encountering the same negative economic forces as the rest of the housing industry. In the quarter ended July 31, home building revenue plunged 34 percent, to $796.5 million and gross contracts weakened 31 percent, to 1,007, according to preliminary numbers released today by the company. And like many builders, it doesn't sound as if those Toll numbers are poised for an imminent upswing either. "With respect to traffic, it is still dismal," CEO Bob Toll said today during a conference call with analysts. "It is consistent, however."

Lending rules are also continuing to tighten, even for affluent consumers interested in buying a house from Toll Brothers, which reported an average gross contract price of $590,000 for the quarter ending April 30. Toll executives said during the call that loan-to-value requirements are becoming more restrictive for its buyers. Would-be purchasers who plan to retain and rent out their former residence are having particular difficulties, they noted.

Of course, with nearly 13 percent of all Toll buyers year-to-date buying their new homes with all cash, current mortgage lending challenges may not be as big an issue for Toll, compared to other builders.

Toll Brothers, for example, did not use down-payment assistance (DPA) programs, the CEO said during today's call, so the approaching elimination of DPA "doesn't really impact us, but it will affect the daisy chain of home buying," he said.

One of those links in the chain is land prices, which have been sliding from their former heights. That leads to Toll's "half-full" situation. With nearly $3 billion in cash and capital with which to play, Toll executives have been watching land trends closely, and the company CEO said today that prices have finally dropped low enough to start evaluating deals. "We won't hesitate to buy assets if we think they are a steal," Toll said. "We aren't looking to buy the builders."

Alison Rice is senior editor, online, at BUILDER magazine.