In the face of rosy projections from some industry economists that the homebuilding market has already hit rock-bottom and will recover in the second half of 2007, the country's biggest builder is sounding a different note.
"2007 is going to suck, all 12 months of the calendar year. Our future is not as bright as what we would like it to be,'"D.R. Horton CEO Don Tomnitz said Wednesday at the Citigroup Industrial Manufacturing Conference in New York, according to published reports from various print and online sources.
Chief among Tomnitz's concerns for 2007 are the high inventory of unsold homes in the marketplace and lower land values that could require Horton to write-off more of its assets.
"We may have more impairments coming," Tomnitz said. "We'll know that on a quarter-by-quarter basis."
Horton, which builds homes in 27 states, has demanded price reductions from vendors and has reduced its own expenses in recent months, Tomnitz said.
The builder has cut its housing starts and has also slashed prices and offered incentives to sell its existing inventory, he added.
Highlighting the inventory problem, Tomnitz pointed to Las Vegas as a formerly "hot" market that has cooled. There are 2,500 unsold new homes on the market there, and another 25,000 unsold existing homes, many unoccupied, Tomnitz said, according to published reports.
Tomnitz appeared to hold out hope that 2008 would offer some relief.
"I don't think '08 is going to be a great year, but it's going to be much better than '07," he said.
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Learn more about markets featured in this article: Las Vegas, NV.