Home Builder Toll Brothers' Advice to Washington
This morning, home builder Toll Brothers released bleak quarterly earnings that speak to the state of the real estate industry. Revenue is down 41 percent and net signed contracts declined 27 percent for the three months ended Oct. 31. The financial crisis contributed to 233 units, or 30 percent of the company's contracts, to be canceled, according to Chief Executive Officer Robert I. Toll.
What's interesting is Toll uses the quarterly earnings report to get into a rather lengthy discussion of what Congress and folks in Washington need to do to fix the industry, with a reminder that the housing market "is the root of the current financial crisis."
Here's what Robert I. Toll had to say:
"We believe the government's efforts must concentrate on stopping the decline in home prices by bringing . . . potential buyers back into the market: stabilization of home prices will help stem foreclosures, shore up the value of mortgage-backed securities, and, ultimately stabilize the balance sheets of the world's financial institutions. . . .
"Congress has allocated hundreds of billions of dollars to reset mortgages, help people who are in foreclosure, and protect those who have been the victims of rapacious lending practices. We believe all of these goals are very worthy. However, we believe that, if home prices are not stabilized, these efforts will be for naught, more mortgages will go under, and the taxpayers' money will have been wasted. We urge Congress to stimulate demand by reducing mortgage rates and fees and by providing incentives such as buyer tax credit for the purchase of all types of homes. We believe these initiatives would offer the greatest benefit for the taxpayer's dollar."
Posted by: apeirond | November 11, 2008 9:42 AM | Report abuse
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