Call it a tale of two CEOs.
At the Citibank Housing Conference, we heard two
versions of the housing implosion from two industry leaders. On the one hand,
Robert Toll (Toll Bros CEO) was saying that his cancellation rate was slowing (unfortunately,
so have been his sales).
In a separate presentation at Citibank, DHI CEO had a few choice words:
"D.R. Horton, the second-largest builder by revenue, will likely miss its internal goals for 2007 home closings, Tomnitz said today. Closings will likely fall below 2006 levels, he said.
"I don’t want to be too sophisticated here, but 2007 is going to suck, all 12 months of the calendar year,” Tomnitz said. "Our future is not as bright as what we would like it to be.”
There are some in the housing industry who certainly don’t pull any punches. Tomnitz may not win any awards for eloquence, but the guy isn’t spinning investors with crap. At the very least, that is fairly refreshing.
Incidentally, I am working on a related issue for tomorrow — call it the "Wages of Spin" — that looks at the negative impact of real estate industry bullshit . . .
Toll Cancellations Drop; Horton Says Market to `Suck’
Brian Louis and Sharon L. Crenson
Bloomberg, 2007-03-07 15:54