Chapter 19: The Last Stage
Bilbo and Gandalf reach Rivendell nearly a year after they left there. Tired, they are warmly welcomed by the elves, and hear songs of the victory over the dragon and the battle of five armies. Gandalf and Elrond discuss the Necromancer, who was driven from the south of Mirkwood by Gandalf and the White Council of wizards, for that is where Gandalf went after leaving the dwarves. They believe Mirkwood will become more wholesome, but worry the Necromancer was merely driven away, not destroyed.
After a week, Bilbo and Gandalf set on the last leg of their journey back to the Shire. Along the way they pass the stone trolls and dig up the treasure they had buried there. Everything Bilbo sees is familiar from the beginning of the journey, but his reaction is to sing songs - not a habit he previously had. When they reach Hobbiton, and Bilbo's house at Bag End, they find a crowded yard, with the possessions of the late Bilbo Baggins being auctioned off. Though the auction is halted, Bilbo never gets back many of the items already auctioned. His cousins, the Sackville-Bagginses, are deeply disappointed, for they had been planning to live in Bag End.
Bilbo has looked forward to the comforts of his home, and enjoys them, but is truly changed. He has many non-hobbit visitors over the years, and is no longer considered respectable. He keeps the magic ring a secret, and few believe his stories, although he writes a book of memoirs - "There and Back Again, A Hobbits's Holiday". Balin and Gandalf visit him, and to his surprise he hears about how the songs and prophecies of their visit to Lake Town have come true.
In a partial foreshadowing of the "LOTR Trilogy", Tolkien wrote at the end, “he remained very happy to the end of his days, and those were extraordinarily long."
If you are truly fascinated by the book, catch up on "Really Great Quotes from "The Hobbit."