Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

KB Home (KBH), PulteGroup, Inc. (PHM) & More: What Six Homebuilder CEOs Are Saying About Housing

Page 1 of 2

Few industries were as savagely beaten down during the recession as housing. Today, few industries have as much potential to rebound.

What are CEOs from some of the nation’s largest homebuilders saying about the housing industry? I scanned through a pile of recent conference call transcripts to find out.

Jeffrey Mezger, KB Home (NYSE:KBH):

Although the pace of the housing market recovery is gaining momentum, it is important to keep in mind that we are still in the early stages of the recovery. And there’s a long way to go before the industry reaches normalized activity levels …

KB Home (NYSE:KBH)There isn’t a city we’re in today that doesn’t have a lot of opportunity. The California recovery has become strong enough. And I’ve been and talking about it for the last probably 6 earnings calls, but every city we’re in has a similar recovery occurring, where there’s a desirable area with no inventory, a lot of price movement upward, and then the recovery will ripple out to the other areas adjacent and so on and so on.

Stuart Miller, Lennar Corporation (NYSE:LEN):

Housing is recovering, and the recovery is consistent, healthy and growing stronger. We saw from yesterday’s housing starts and permits numbers that the recovery in housing is continuing to progress in both multifamily and single-family products. This data confirms what we’ve seen in the field for some time.

There has been an underproduction of housing during the downturn, as we produced as few as 550,000 homes per year during the downturn of both multi- and for-sale product. This is very close to the rate at which homes become obsolete. So for some of those years, we had essentially no net production against the normalized household formation rate of some 1.25 million annually. This shortfall will have to be made up, and the market is beginning to move in that direction.

Larry Mizel, M.D.C. Holdings, Inc. (NYSE:MDC)

The country is growing. The homebuilding industry, the opportunities have never been greater for the large builders. The capital markets are open and I would say in all the years I’ve been in business, this is probably the clearest period of time that I have seen as to the future of the housing industry for those who would have excess to capital.

Donald Tomnitz, D.R. Horton, Inc. (NYSE:DHI)

We’re clearly raising prices on each and every one of our communities on a house by house, on a subdivision by subdivision basis … We do have costs which are going up in some of our markets and with some of our subcontractors but clearly, our pricing power is exceeding the cost increases that we have today …

We’re trying to replenish our lot supply. To be quite frank with you, Phoenix turned around faster than we thought it was going to turn around and we probably are scrambling a little bit more than we normally would in the Phoenix market to replenish our lot supply, and the same thing in the Albuquerque market.

Page 1 of 2
Loading Comments...