D.R. Horton Uses Incentives to Boost Sales, but Investors Don't Like What They See

By Anonymous -
To keep sales growing, D.R. Horton – which closes more sales than any other American home builder – has been using incentives to get buyers to sign, whether upgrades or help with closing costs or others.  As the home-building market squeezes out the last price increases it is likely to be able to get for a while, other builders may follow suit to keep turn shoppers into buyers.  The next stage of the housing recovery will, UBS analyst David Goldberg said, need the first-time home buyers who have been reported M.I.A. because wages have not gone up even though hiring has and banks remain fearful of being anything less than stringent in making mortgage loans.  Horton's CEO, Donald Tomnitz, said he sees no problem with profit dropping from 22.5% to 20.7% when that produces a 25% increase in sales. He also said 20% profit is more normal for the home-building industry, but investors apparently did not want a history lesson, and Horton sank 11.5%.

(From Construction Dive)

Trenton H. Cotney
Florida Bar Certified Construction Lawyer
Trent Cotney, P.A.
1211 N Franklin St
Tampa, FL 33602

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