Eli Broad, the co-founder of KB Home, told Bloomberg TV yesterday that home prices could fall another 20%. Here’s a link to the story. That is an absolutely enormous amount when you consider that prices have already fallen a bunch. Today the Standard & Poor’s/Case-Shiller Home Price Index for February was released. It showed that the 20-city index fell 12.7% from a year earlier and is down 14.8% from its all-time high in July 2006.
I’m guessing that the execs at KB Home aren’t real happy with Eli Broad, because who’s going to buy a house now if they think that Broad is right about where prices are heading? I don’t know how many shares of KB Home that Broad himself still owns, but it can’t be too many because he doesn’t appear on the list of holders of 5% or more of KB Home shares in the latest SEC filing.
Trivia: KB Home was founded in 1957 in Detroit as Kaufman & Broad Building Company
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.