Pulte Homes' closings were down 24% in 2008, less than most of its competitors but sales slipped at year's end, portending low closing numbers for the first part of 2009.
In January of 2008, Pulte CEO Richard Dugas told analysts that the previous year “will likely be remembered as the most diffi cult in decades.” In January 2009, Dugas had to beef up his language. An “incredible calamity,” was how he described the last quarter of 2008.
Despite the challenges, Pulte’s closings fell only 24 percent in 2008, far less than the average for the large public builder group , and the company leapfrogged from No. 4 to No. 2 in the top 10 Builder 100 companies. Pulte also amassed a war chest of $1.7 billion by year’s end.
The cash will be helpful as the company’s sales are expected to decline even more during the fi rst part of 2009. At the end of 2008, Pulte had a backlog of 2,174 homes under contract, a 72 percent decrease from the end of 2007.
After an initial purging of some of the company’s less-thanstellar land positions, Dugas, unlike many other CEOs of public home building companies, held tight to the land the company had left, despite criticism from analysts. He insisted it would be diffi cult and expensive to replace when the market returns.
Pulte plans to work through its land the old-fashioned way, he says, by building houses on it and selling them.
Says Dugas, “Pulte is built for the long term.”