Yesterday, the CEO of luxury homebuilder Toll Brothers (NYSE:TOL) was optimistic during a preliminary peek at the company's results for its third fiscal quarter of 2009.

But let's not get too excited here. CEO Bob Toll's comments were reminiscent of 2006, when he said, "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." Nevertheless, there were enough positives in Wednesday's numbers that it might just make sense to sit up and take notice.

For instance, after several years of dancing on the bottom, Toll was able to report that net contracts for the quarter were up 3% in units versus a year ago. And while the dollar amount was down 5%, we have to start somewhere. Perhaps even more importantly, the number of cancellations -- an obvious indicator of buyers' seriousness -- dropped to 78, about half that of the prior two quarters, and the lowest in three years.

But not all the numbers from Wednesday's session were positive. For instance, the quarter's homebuilding deliveries and revenue were still off by 36% and 42%, respectively. And the writedown process -- which has been so much a part of homebuilding for perhaps too many quarters now -- is continuing. Toll expects to write down the value of its assets by $90 million to $160 million for the quarter.

I have long thought, unlike many other observers, that the recovery would begin at the luxury end of the housing market. But D.R. Horton (NYSE:DHI), Pulte (NYSE:PHM), and Centex (NYSE:CTX) -- the latter two are expected to merge shortly -- have all reported improving numbers lately. Beyond that, I'm watching the likes of Lennar (NYSE:LEN) and even Beazer (NYSE:BZH) for confirmation (or denial) that the industry is finally strengthening.

But since I began with a Bob Toll quote, let's end with one as well: "Although some of our markets are still stuck in the mud, many are improving. While we have to work very hard for our sales, it does feel as if the fence sitters are looking for reasons to jump in on the side of buying."

So while I'd still recommend caution, if you're determined to take a plunge into homebuilding, Toll might be a place to start.

Toll Brothers is still rated with just one star by Motley Fool CAPS players. Why not cast your vote on the company?

Fool contributor David Lee Smith does have a mortgage, but doesn't own shares in any of the companies mentioned above. He does, however, welcome your questions or comments. The fool has a luxury disclosure policy.