Monday, March 05, 2007

Toll: No Spring Turnaround for Housing

by Bill McBride on 3/05/2007 04:24:00 PM

From MarketWatch (hat tip: yal): Builder CFO doesn't see spring turnaround for housing

Home sales haven't rebounded dramatically so far this spring selling season, which suggests a hoped-for recovery in the housing market won't play out as soon as some had expected, Toll Brothers Inc.'s chief financial offer said Monday. ... [CFO Joel Rassman] said headlines on the subprime market "make customers nervous" and added the housing market could feel significant impact in the next month, such as foreclosures and more speculators quitting the market.
Subprime is not directly "a big part of Toll's market", but real estate works like a sequence of chain reactions. If a subprime borrower can't purchase a starter home, the seller can't buy a move-up home, and that seller can't buy a Toll Brothers McMansion.

For the potential impact of the subprime implosion on the housing market, see Subprime: The impact on Existing Home Sales in 2007