Pulte Homes Says New Home Sales Will Increase When Foreclosures Slow Down
In a candid moment Pulte Homes CEO Richard Dugas says what we all know, new home sales will not recover until foreclosures slow down. The inventory issues and lack of faith in the market are keeping new home builders in survival mode as buyers are tentative buying new homes.
When almost new homes are hitting the market with a price far below what the new home sellers can sell at, it is the logical move. Watching a couple of markets myself shows indications that nervous sellers are competing with bank owned properties for the bottom dollar. And for the most part these homes are in great shape.
We may be nearing the bottom in pricing but until the velocity of the market picks up to absorb the foreclosures and nervous sellers the new home market will remain in the doldrums.
“All of us would like this downturn to end soon,” said Pulte Homes President and CEO Richard J. Dugas Jr. during a conference call with analysts Wednesday morning.
While Dugas said he sees some favorable signs for an industry turnaround in low rates for 30-year mortgages and affordable home prices, the slump has not yet bottomed out.
Pulte Homes released its earnings Tuesday after the stock market closed. It reported a net loss of $514.8 million, or $2.02 a share, for the three months ended March 31, compared with a net loss of $696.1 million, or $2.75 a share in the same period last year. Detroit Free Press.
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Comment by Portland Real Estate on 7 May 2009:
There have been too many people calling the bottom of the market, why dont we wait a little bit before calling that to see if the market has any more surprises for us. At least the average American is feeling optimistic about where the country is headed now that we have some new leadership.