D.R. Horton Inc., the nation's largest homebuilder by deliveries, said Tuesday its second-quarter sales orders fell 37 percent, led by even steeper declines in California and the Southwest.
We continue to sell more homes than any other builder, even though the spring selling season has not gotten off to its usual strong start," Chairman Donald R. Horton said in a statement.
Net sales orders for the quarter ended March 31 totaled 9,983 homes, down from 15,771 homes during the prior-year quarter. The value of the orders dropped to $2.6 billion from $4.4 billion in the previous year.
Net sales orders for the first six months fell to $4.9 billion, or 18,754 homes, from $7.5 billion, or 27,234 homes during the same period in fiscal 2006.
These are some very substantial drops in sales -- as in, "we're not even close to seeing a bottom in the housing market" kind of drop.
Also note the Spring selling season is not going as well as anticipated. This indicates demand is decreasing.
The CEO made no mention of tightening credit standards in his statements. If tighter standards aren't included, then we have a problem -- a big problem -- going forward.
4 comments:
Two off-the-beaten-path concerns:
1)City planning and half-done developments and 2) what will all of those laborers do when the construction crew jobs dry up?
What I hope happens to the laborers cut from residential construction is that public works construction booms.
The nation has massive infrastructure investment needs. Take a look at your own city -- roads need fixing, bridges repaired, schools built, etc.
If our politicians shifted resources from misbegotten foreign wars to domestic investment, we'd have a more stable and sustainable economic future.
My husband works construction.
Most housing developments on the Eastern Seaboard are built by South American immigrant labor. When the company he used to work for got in trouble and needed to cut their payroll, they asked everyone for proof of ability to work in the US and 41 people vanished overnight. So they'll cut the immigrants first.
Highway spending can save some construction jobs - moving dirt takes the same skills whether you're digging a basement or widening a shoulder. But carpentry jobs, electrician jobs, plumbing jobs (in other words the skilled and higher-paid laborer jobs) cannot easily transfer to highway work.
Expect more anti-immigrant backlash as the housing market implodes. And an investment in highways and bridges can ameliorate the problem but it won't eliminate the hardship.
This affects alot more than just on-site construction workers. Here in MN and also ND, Marvin Windows is cutting back all of their factory workers to 32-hour work weeks, trying to avoid layoffs because orders are WAY down. They hope it will turn around soon.
But my own feeling is that it can't turn around soon with the tightening in the mortgage markets. It could be years before things feel normal again.
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