First -- in December both Hovnanian and Toll Brothers predicted a bottoming in the housing market. It's important to remember that CEOs are media savvy. In other words, they may be saying this hoping it comes true, or with an eye to maybe influencing the market in some way.
However ...
Construction spending dropped 1% in October.
The overall drop was driven by a 1.9 percent decline in private residential construction and a 1.5 percent drop in private construction. October saw the sixth straight dip in private construction.
Toll Brothers predicts a drop in 2007 profit:
Toll Brothers the luxury home builder, said next year fiscal year's profit may fall 62% but also said it 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.
Toll Brothers current earnings drop 44%
Luxury home builder Toll Brothers Inc.'s fourth-quarter earnings fell 44 percent, but the company said it sees some signs of stabilization in the slumping housing sector and raised its forecast for first-quarter home deliveries.
Realtors predict a drop in sales in 2007
Next year will likely bring a second annual decline in existing home sales, the National Association of Realtors predicted Monday.
Sales of existing homes are expected to decline 8.6 percent to 6.47 million for 2006 and contract another 1 percent to 6.40 million units next year.
Hovnanian reports 4th quarter loss:
Homebuilder Hovnanian Enterprises Inc. reported Monday that it swung to a loss in fourth quarter, beset by a downturn in the housing market that has also plagued competitors.
After paying preferred stock dividends, the company reported a quarterly loss of $117.9 million, or $1.88 per share for the quarter that ended Oct. 31. That compared to a profit $165.4 million, or $2.53 per share, for the same period a year ago.
Let's add to inventory now. Times are great!
6 comments:
Small builders having a tough time:
Another Southwest Florida home builder has exited, leaving dozens of customers with unfinished homes and regulators dealing with a third-party contractor who qualified the company's permits.
Sarasota-based Avalon Homes left its offices at 379 Interstate Blvd. unfurnished, unlocked and deserted several weeks ago, its former landlord says.
http://www.siliconinvestor.com/readmsg.aspx?msgid=23113779
That is some great news...
Let's build more houses!!!
For some extra humor go to the Housing Bubble Blog and count the self serving statments from real estate agents and builders.
See ya in about a month.
lies, danged lies and housing numbers
http://www.fool.com/news/2006/12/19/lies-danged-lies-and-housing-numbers.aspx?source=eptyholnk303100&logvisit=y&npu=y
Why shouldn't people add to inventory? If prices of existinghomes are X, and you can build a new home for X - 10%, then wouldn't you do it? The onus is on sellers to match or beat this base line price.
fed ex is taking downs its numbers this morning which again raises the question: if the economy is so strong why are the companies that move stuff from one local to another not doing so hot?
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