Home builders optimistic about future of housing market
By Melissa Wirkus
Home builders are among those who have faced the biggest
slap in the face from the slowing housing
market.
Many of these companies overbuilt and planned way too
many new projects and developments during the housing
boom from about 2000-2005, because many thought a slowdown
would not occur for a long time.
But now that the slowdown has definitely made its presence
known loud and clear, many home
builders have had to slash prices, offer incredible
incentives and even cancel planned projects all together.
Although home builders have seen some tough times lately,
many are now saying that they believe the worst of the
slump is now behind us and things should only get better
in the future.
A December 5, 2006 article by Les Christie and Chris
Isidore of CNNMoney.com, “Home builders see bottom
of housing slump,” discusses this new optimistic
outlook from some very prominent home building
companies.
This news of positive outlooks from the companies comes
at a much needed time, because most of the news out
right now only discusses the negative parts about the
current state of our housing market.
“The serious slump in the housing market may be
near a bottom, say home builders - though it could take
a while before prices rebound.”
“Toll Brothers reported a sharp drop in fiscal
fourth quarter earnings early Tuesday and forecast a
big drop in profits for the coming year. But despite
that bad news, chairman and CEO Robert Toll said that
the market for new homes may finally be leveling off
after more than a year's worth of declines.”
Most are expecting the market to turnaround as soon
as the beginning of 2007, which is only a few months
away.
“‘Fifteen months into the current slowdown,
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,’
said Toll in a statement accompanying the earnings report.
‘The metro D.C. suburbs of northern Virginia,
which was the first market in which we saw activity
slow, seems to have stabilized, although at levels much
lower than those we have enjoyed over the past few years.’”
Our overall economic state is definitely contributing
to this positive report. Interest
rates are low, and overall job and economic growth
seems to be looking healthy as well.
Consumers and homeowners should not expect to see the
“boom” days of the past few years come back
anytime soon, although things should be looking up in
most areas across the nation.
“Do not, however, expect a return to national,
double-digit home-price growth. Those days may be over
for a while, according to the NAHB's chief economist,
Dave Seiders. Instead, the recovery will be marked by
fewer houses sitting on the market. ‘Inventories
will drop,’ says Seiders, ‘and prices
will stay flat for a couple of years.’”
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