Yet another reason to focus on your reputation
We have a lot of inventory out there, sales cycles are stretching out, and buyers are enjoying a sudden decline in new home prices. It is a good time to be known as an accomplished building professional with a history of exceptional service.
It’s an especially good time to be on solid footing, considering that some economist are forecasting some pretty serious doom and gloom. My father forwarded me an interesting article from Fortune this morning, highlighting yet another reason to turn your attention to your company’s reputation. If Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., is correct, the economy is in for a tough ride next year (see her chart to the right).
A couple excerpts from the article:
“The historical record is extremely negative in terms of what comes next,” says economist Ed Leamer, director of the UCLA Anderson Forecast. “We’ve had 11 sharp declines in the housing market since World War II, including this one. Eight of the last ten were followed by a recession.”
Bruce Karatz, KB’s CEO, thinks it will be next summer at the earliest before homebuilders work through all existing inventory. In the meantime, he’s hopeful that a big upswing in free cash flow - builders have essentially stopped buying new land - will get companies like KB back into Wall Street’s good graces.