What Hov. Said Today
From Hovnanian's conference call today.
"We don't believe that the current slowdown in housing is driven by interest rates. Rates have moved up, but the increases have been moderate, and mortgage rates remain very attractive by any historical measure. The slowdown is also not driven by the lack of job growth. The economy continues to prosper and add significant jobs. It's also not driven by an abrupt reversal of population growth. The trend continues to be very positive in demographic terms. Rather, it seems to be that the slowdown is being driven by two primary factors. First, investors. Investors have largely withdrawn from the market, thereby reducing demand. In addition, they have added to the supply of available homes by listing their recent purchases for resale. This has resulted in a significant growth of the resale listings in many markets. Second, buyer sentiment. Buyers have been bombarded by the media predicting a housing bubble, and now they are seeing builder advertisements touting a variety of concessions and incentives. Not only has the buyer urgency receded, but buyers now believe that a more cautious, slower approach toward a new home purchase may result in a better opportunity. The question is, how long will this excess inventory and buyer sentiment prevail?"
"We don't believe that the current slowdown in housing is driven by interest rates. Rates have moved up, but the increases have been moderate, and mortgage rates remain very attractive by any historical measure. The slowdown is also not driven by the lack of job growth. The economy continues to prosper and add significant jobs. It's also not driven by an abrupt reversal of population growth. The trend continues to be very positive in demographic terms. Rather, it seems to be that the slowdown is being driven by two primary factors. First, investors. Investors have largely withdrawn from the market, thereby reducing demand. In addition, they have added to the supply of available homes by listing their recent purchases for resale. This has resulted in a significant growth of the resale listings in many markets. Second, buyer sentiment. Buyers have been bombarded by the media predicting a housing bubble, and now they are seeing builder advertisements touting a variety of concessions and incentives. Not only has the buyer urgency receded, but buyers now believe that a more cautious, slower approach toward a new home purchase may result in a better opportunity. The question is, how long will this excess inventory and buyer sentiment prevail?"
posted by Little_Silvered at 7:41 PM
2 Comments:
But it was the absurdly low interest rates that got investors involved in the first place. Lend me $1mil at 1% and I can afford a beachfront condo too. Raise it to 5% and I'm toast.
Wow, just wow,
KHov's econ advisors are clearly telling their corporate masters what they want to hear.
It's one thing to put on a happy face for public consumption when you're worried, but to go this far with crazy notions makes them look foolish.
They'd be a lot better off acknowledging changes in the market and talking about the need to be cautious rather than putting out a lot of blather about how external forces that don't make sense are behind their bad numbers.
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