In an interview with Bloomberg this morning Bob Toll, CEO of Toll Brothers, says the housing market is “coming back”. He sees the pressures in real estate alleviating as consumers rebound and government programs help boost up the market. Toll says we’re on the verge of a “serious good time”:
“I don’t see prices going down any longer. I think you’re gonna see them start to go up. As they accelerate we’ll get closer to a serious good time again, but we’re not there yet.”
Despite this, the Toll Brothers CEO has dumped hundreds of millions in stock and company execs continue to dump shares on the market as we speak. For Bob Toll, it looks like a win-win. His “serious good time” scenario will result in further profits (and bonuses) whereas he has essentially hedged himself from massive losses (via his stock sales) if the real estate market retrenches. For the American public the scenario is a bit different. The “serious good time” means the bubble is coming back to American real estate. We all know how that will end. And buying Toll stock from the man who sold it? Well, that will likely turn out the same way….A boom before a bust….