by Calculated Risk on 11/10/2006 02:38:00 PM

From Paper Money: “Death Spiral” Makes Home Builders Angry!

In a particularly revealing exchange, Ara Hovnanian, CEO of Hovnanian Enterprises Inc., squared off against a somewhat angry Robert Toll, CEO of Toll Brothers Inc., over the issue of tactics employed by “certain” home builders in their attempts to rid themselves of unwanted land parcels.

“.. many [builders] are choosing a tactic, private and public, of popping a house on that land because you can sell it when it has a nice house on it more easily than you can sell the raw land.” said Hovnanian. Then Toll interrupts “[inaudible].. what.. are you suggesting builders are building specs to move land?” After a short and uncomfortable pause Hovnanian responds “.. ah.. not uniformly, but yea.. absolutely. I would say that… I don’t think Toll is but I think people are. [lots of laughter]”. Toll then responds enthusiastically “Toll is certainly not!”

Here is the referenced CNBC video clip.