Home Building Company Reports Oversupply Driving Prices Down
A handful of owners are wondering what to do with their current Florida home loan - do they sell while values are at the highest? If this is a dilemma you’re toiling with, consider yourself in the minority. Recent figures reported by luxury home builder, Toll Brothers, depict a drop in the value of its contracts and a negative outlook for the real estate year ahead.
The suburban Philadelphia-based builder reported that while its fiscal second-quarter home building revenues rose 18 percent to about $1.4 billion, signed contracts plunged 29 percent to about $1.6 billion in the period ending April 30. It also said that its cancellation rate was 8.5 percent in the quarter, up from its historic level of 7.0 percent.
“We are entering our ninth month of slower sales in most of our markets,” said Chairman and CEO Robert Toll in a statement. “Speculative buyers are no longer fueling demand; instead they’re putting the homes they’ve recently acquired back on the market or are canceling contracts in mid-construction.”
The company says the larger supply on the market is driving down new home prices. This makes it a good time to seek out a reasonable Florida home loan.
New home sales reached record levels in 2005, with the Census Bureau reporting nearly 1.3 million new homes sold, and new home starts and building permits have stayed strong this year. But builders have been reporting a much softer market in recent months, and the building boom has led to a large supply of new homes on the market.
A survey by the National Association of Home Builders reports that nearly one builder in five saw an increase in cancellations - and nearly 75 percent are seeing greater inventory of new homes available for sale in their markets.
Earlier this week home builder Hovnanian Enterprises warned its current quarter and full-year earnings would fall short of forecasts, sending its shares and those of most of its competitors lower. While the building of new houses may be slowing down, that places an emphasis of existing sales. Deals on Florida home loans, therefore, should not be difficult to come by.
