Home Builders: How About A Little More Talk?
I couldn’t have been less welcome if I were a subprime borrower begging a bank for a jumbo loan. There I stood, in the early September heat, smack in front of the visitor's entrance of the Federal Reserve, as the CEOs of the nation’s very top home builders filed out of a meeting with the Fed Chairman. They may not have marched in lock step, but their refusal to talk to me was in dead-bolt lock step.
I know the builders have been critical of the media for supposedly hyping the housing downturn. Look, I admit, I haven’t exactly been Rosy the Riveter for these builders, but let’s face facts: I report numbers, and their earnings numbers ain’t grand. Many of these builders used to jump on our air at a moment’s notice. Now only a very precious few, like Ara Hovnanian, will do guarded interviews, and Robert Toll likes to talk too.
Unfortunately for Toll, he was the only builder who had his own Town Car, instead of riding the communal bus offered by the National Association of Home Builders. Toll’s car didn’t show up on time, so there he was, stuck alone with the attack-reporter, namely me. He was gracious, and I thank him.
“I don't think it's the mortgage rate that's making a difference,” Toll told me with a cell phone in his ear, trying to track down his car. “I think it's confidence in the consumer who has a fear that if they buy today, they're catching a falling knife, and that they're going to be sorry because they could have bought for less tomorrow.”
I asked Toll what it would take for the this market to turn around:
“I think it's going to take an absorption of the product that you've got in the field, you've got a lot of speculative product because of buyers walking away from deals that they made 6 months ago that they think is now not smart to go through with,” Toll replied.
The builders were asked very strongly by the Fed not to speak with the media about today’s meeting, but Mr. Toll did opine when I asked about possible government intervention in the mortgage market:
“I don't think the government can bail out and I don't think they can pass legislation that will stop greedy predator mortgage originators from frankly greedy home buyers that would like to take advantage of, turn the greed back and say, ‘Yeah get me this mortgage and I'll do business with you.’” And then his car finally pulled up to the curb.
I’d like to thank Mr. Toll again for chatting with me, and I’d like to make an open offer to the CEO of any home builder to come on our air and set us straight. If we’re hyping the housing downturn, then tell us why we’re wrong! Trust me, I don’t love standing there schvitzing in the heat any more than you do, but we’re all sweating out the housing market, and a little more communication on your end would be refreshing.
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