On May first, they come again to Rivendell. The elves around them are already singing a song of Smaug's fall. They lead the group to the city and welcome them back. Gandalf tells the tale as Bilbo dozes. Bilbo hears what Gandalf was doing while he was away from them. He had joined a council of wizards and they united to depose an evil magician south of Mirkwood. With him gone, the forest should slowly become better. Elrond is very happy about this. Bilbo falls asleep and wakes to the elves singing again. They laugh at him because he snores so loudly. He has slept through the next day and it is night again. He goes back to sleep. He wakes and feels better, stronger. After a week, they leave Rivendell.
It begins to rain and they travel on for many days. The return to the hoard of treasure near the stone trolls. Gandalf says that they should take the gold, because if they don't want it, there is probably someone who needs it. Their progress is slowed by the extra weight. The last few days of the journey drag out. When Bilbo finally sees his home after more than a year, he says,
"'Roads go ever ever on Under cloud and under star Yet feet that wandering have gone Turn at last to home afar. Eyes that fire and sword have seen And horror in the halls of stone Look at last on meadows green And trees and hills they long have known.'" Chapter 19, pg. 300
Gandalf is impressed with the deep and profound change that has come over the hobbit in the past year. When he comes around to the door, they are surprised at a commotion in front of his house. The other hobbits are auctioning off his stuff because they presume him dead. Some of his relatives really want to live in his house. Bilbo must argue to convince them that it is really he who has returned. Some of the hobbits never believe him. He never gets all of his stuff back, but he retrieves most of it.
His reputation among the hobbits has changed. Rather than being impressed by his adventures and feats, they find him odd. He is no longer considered respectable, but Bilbo doesn't care. After so long and tumultuous a journey, he is more than happy to sit in his house and blow smoke rings. He starts to write his memoirs after many years. He writes poetry and often visits the elves. He spends most of his treasures on gifts for nieces and nephews who end up liking him very much, to the dismay of their parents.
Some years later, there is a knock on the door and it is Balin and Gandalf. They sit with him and tell him tales of the world he left. Bard eventually rebuilt Dale. Both Dale and Esgaroth prospered from trade. The old Master of the town tried to steal treasure from all of the townspeople. He fled from the town, only to die in the wilderness, alone with his gold. Bilbo laughs because all of the predictions that were made came true. Gandalf tells him he shouldn't be surprised because such things do not happen by luck, they are fated. Bilbo laughs and they smoke their pipes.
