It’s one thing to jump on the bandwagon when things are
getting better, it’s quite another to jump off of it when everyone around you,
not to mention your own company’s earnings, would seem to confirm that
sentiment. But that’s just what Donald J. Tomnitz, CEO of D.R., the nation’s
largest home builder by volume did.
“I still don’t see a lot of jobs being created,” he told an
earnings conference call, sending his company’s stock down when it should have
been riding higher on a 24 percent year-over-year jump in new orders for homes.
He is concerned about the future of this fledgling housing recovery, and he has
reason to be. Mortgage delinquencies and foreclosures are driven by
unemployment.
The new home builders are rising from the ashes, after
overbuilding and a credit crash sent sales and construction to levels not seen
economists began counting all those numbers; they are rising, but not
necessarily thriving. While overall buyer demand has been weak, distressed
properties (foreclosures and short sales) have stood as the greatest
competition, as many of those homes are in fact relatively new construction.
