Toll Brothers Earnings: Weathering the Storm

Despite a third-quarter profit that fell 85 percent, Toll Brothers managed to stay profitable and actually beat analyst forecasts. Toll Brothers stock was trading higher in early morning action. 

CEO Robert Toll stated that a surplus of homes is curbing demand. He also said that ``Our buyers generally should be able to continue to secure mortgages, due to their typically lower loan-to-value ratios and attractive credit profiles,''

But, analysts predict that these buyers will likely begin to have trouble securing mortages, despite their favorable credit and financial status. This could mean that Toll and other luxury builders may be exposed to more writedowns of land holdings in future quarters.

Meritage CEO Fires The First Salvo In The PR War!

Well, 'New vs Used'--with all the current negative press and market conditions...we all talk about this stuff and think we should do something, but Meritage has actually taken action in combating the current market malaise/negative press, by hitting it head on via PR outreach.  It is not only about 'buy now' but also about 'new as superior'.  (You can link to the interview from Newhomesource.com.)  An interviewer from the local media interviewed Steve Hilton (CEO--Meritage) in a news format, resulting in a great scripted interview that can be posted in a variety of places online. 

What if the top 50 builders all created video interviews of key execs focusing on these important topics placing this content not only on their own websites but also on 3rd party aggregator sites? The effect is that wherever the consumer goes, he will see a myriad of influential and trusted sources espousing the benefits of new and combating the negative publicity in the current market. 

This poses an interesting question for the consortium, both as individual builders as well as a unified body...Can we provide draft scripts, should we help facilitate production, post on our sites, etc...?   What are your thoughts?  Please post your thoughts and comments. If we want to craft the environment we live in, we need to take action...the question is 'what action'?   Meritage has taken a first great step, which I would challenge all builders to follow!  (Posted by Melissa for Tim Costello!)

Consumers Striking Back: Business Week Feature on Consumer Complaint Sites

Business Week has a feature article about new home consumer complaint web sites that everyone in the Home Building Industry should read. The article talks about some of the most popular web sites, and tells the stories of the consumers behind them. These are angry consumers that have had serious problems with their new homes, and have decided to strike back. As the Home Building Industry struggles, these sites are getting more and more traffic and mainstream media attention. Take a few minutes to read the article and then, return to BHI Insights and leave you comments on the article.

Fulton Homes Realizing Great Results Through Envision!

Jason Knott, editor of Techhomebuilder Mag, visited Dennis Webb (VP, Ops) at Fulton Homes to talk about their unique approach to their buyers through the use of technology.  Fulton has taken an interesting approach to the downturn in the market, as they are investing in technology/systems to ensure they are poised for the new buyer mentality.  And you gotta love that ‘box o nails’ comment regarding ROI on Envision!  Dennis also has some great advice for his competition—make sure you stay through to the end of the video.

National Association of Home Builders: Builder Confidence Down Further In July

The latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today shows that builder confidence has continued to fall. They attribute the drop in confidence to many factors including the surplus of unsold homes on the market, ongoing concerns in the subprime mortgage arena and affordability issues associated with higher interest rates and tightening lending standards. The confidence index is based on a survey of builders that asks about current single-family home sales and sales expectations for the next six months, and rate traffic of prospective buyers. NAHB Chief Economist David Seiders stated that “Builders are actively trimming prices and offering buyer incentives to work down their inventories, but meanwhile there is a large supply of vacant existing homes on the market, and affordability problems persist despite efforts to attract buyers."

Warren Buffett's Berkshire Hathaway in Talks Purchase Hovnanian?

Shares of Hovnanian, New Jersey's largest builder, rose $1.98, or 12 percent on speculation that Berkshire Hathaway would purchase a major stake in the company. Neither party would comment on the rumor, but home builder stocks were up across the board, out of hope that a Buffett purchase of a major builder would mark the bottom of home builder stock valuations. Stay tuned...