NEW YORK (CNNMoney.com) -- The serious slump in the housing market and home building may be near a bottom, according to a leading U.S. home builder.

() reported a sharp drop in fiscal fourth quarter earnings early Tuesday, although the luxury home builder still managed to beat forecasts by a penny a share. It also saw a big drop in fiscal 2007 earnings, and more charges for pulling out of options it holds for land.

But despite that bad news, chairman and CEO Robert Toll said in the earnings report that the market for new homes may finally be leveling off after more than a year's worth of declines.

"Fifteen months into the current slowdown, we may be seeing a floor in some markets where deposits and traffic, although erratic from week to week, seem to be dancing on the bottom or slightly above," said his statement. "The metro D.C. suburbs of northern Virginia, which was the first market in which we saw activity slow, seems to have stabilized, although at levels much lower than those we have enjoyed over the past few years."

The building boom of 2005, which resulted in record new home construction and price gains, has been followed by a sharp drop building and prices this year, with the Census Bureau reporting a record glut of completed new homes available for sale on the market.

Toll Brothers, which concentrates on luxury homes, is the nation's No. 6 building terms of sales. The five larger builders, (), (), (), () and (), have all seen their profits fall sharply, with many lowering their forecasts below forecasts.

Toll Brothers results and guidance were not bad compared to expectations. The company earned $173.8 million, or $1.07 a share, in the quarter ending Oct. 31. While that's down more than 40 percent from the $310.3 million, or $1.84 a share it earned a year earlier, it beat the EPS forecast of $1.06 a share by analysts surveyed by earnings tracker First Call.

The company forecast net income in fiscal 2007 of between $1.58 to $2.08 a share, down from the $4.17 a share earned in the just completed period.

But the 2007 forecast includes a change in accounting practices that should shift between 22 and 29 cents a share to subsequent years. And even without that change, the bottom of end of the forecast is better than bottom of the range of estimates from First Call of between $1.45 to $2.96 a share. The current consensus forecast is $2.30 a share, but it is not clear if that takes into account the new accounting method.

The company also said it now estimates $60 million of pre-tax land-related write-downs in the new fiscal year, which is above the $16 million it had budgeted annually in recent years.

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