KB Home: Housing market ‘unlikely to improve significantly’ in near-term
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News item from Bloomberg: ‘KB Home, the Los Angeles-based homebuilder that targets first-time buyers, reported a wider third-quarter loss after sales plummeted 56% and the company wrote down unsold homes.’
KB Home C.E.O. Jeffrey Mezger said the proposed $700 billion bailout won’t make much difference to the housing market: ‘The majority of the bill is focused on fixing Wall Street issues,’ he said on a conference call today. ‘I’m not hearing anything that will create housing demand or stabilize housing markets.’
There’s a bunch of other stuff worth noting from the company’s assessment of the housing market today, including:
‘KB Home Chief Executive Jeffrey Mezger was bleak: ‘Market fundamentals appear unlikely to improve significantly in the near-term’ amid competition from increased foreclosures, bloated inventory and tighter requirements for mortgage rates, even for potential buyers with good credit.’
More from CNN Money:
‘In California’s Inland Empire, one of the nation’s worst housing markets, KB Home has cut the size and prices of houses -- by more than half -- to make them competitive with resales and foreclosures, often bargain-priced to sell quickly. The change is working, Mezger said during the earnings conference call.’
One analyst, Carl Reichardt of Wachovia, called KB Home’s report ‘staggering’ for its collection of gloomy numbers. The company’s cancellation rate jumped to 51%, up from 27% in the second quarter.
--Peter Viles
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Photo credit: Associated Press