Depending on which part of the country you're in, hand wringing might be in vogue again. Here are the details according to AP.
Luxury home builder Toll Brothers Inc. on Wednesday said third-quarter sales fell and signed contracts were cut nearly in half as the housing market continued to slow.
But, like most things, it's not that simple.
I'm always leery of national economic news, because there are 50 states that have their own economic dynamics.
Toll Brothers said home-building revenue fell by 0.5 percent to $1.53 billion and total revenue dipped by 1.2 percent to $1.54 billion. Sales headed lower in the Mid-Atlantic, Midwest, and California markets, while revenue in the Northeast, Southeast and Southwest was up.
So, it's not that simple to explain.
Robert Toll, chairman and chief executive, expressed some surprise at the weakening.
“It appears that the current housing slowdown ... is somewhat unique: It is the first downturn in the 40 years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors,” he said in a statement.
Well, if the CEO has a hard time explaining it, I'm certainly not going to jump in and further cloud the water with my ignorance! Other views abound.
Celia Chen, director of housing economics at Moody’s Economy.com in West Chester, Pa., said Toll Brothers’ experience is exacerbated by its high-end homes and its concentration in overheated housing markets.
However, the housing market has gotten so hot in certain areas — driven by eager sellers and speculative buyers — it couldn’t be supported even by solid economic growth, Chen said.
There's a word in there that seems to come up regularly that concerns me. It's used a lot in reference to the oil and gas industry. "Speculative". I want to delve into that further. It's a word I think gets us into more trouble than we imagine.
Comment Preview