It’s Giving Tuesday, and the Marketplace Investors Challenge Fund is matching gifts to triple your impact!
TEXT OF STORY
Scott Jagow: Today, the luxury homebuilder Toll Brothers reports how things are going — orders for the last three months. Might see a 25 percent drop compared to a year ago, and as far as homebuilders go, Toll Brothers is in good shape. Here’s Steve Tripoli.
Steve Tripoli: Toll Brothers is a bit of an exception to most other big home builders. That’s according to John McManus at the industry magazine Big Builder.
He says Toll isn’t choking on excess land like many others. And the company’s concentrated in relatively healthy housing markets. McManus says that’s not the case for many of the top 100.
John McManus: These companies hired too many people, and they paid too much for additional lots to build on, and got ahead of themselves in terms of what they could manage if things were to suddenly hit a wall.
The wall’s been hit, and McManus sees a terrible year ahead.
McManus: You’re going to see defaults and eventually bankruptcies occur in that group.
Tripoli: How many of the top 100 do you think are going down?
McManus: Well, I’d say probably one in three.
McManus says survivors will be those who aren’t wallowing in debt they can’t pay with homes that aren’t selling. He says those companies may even gain market share once a lengthy shakeout ends.
I’m Steve Tripoli for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.