Mr. Dugas: Pulte is the nation's most diversified homebuilder. We build in 54 markets in 28 states around the country. We are not only geographically diversified, we are very well diversified by customer segment. Pulte builds for all major segments of the US housing market, including first-time, first move-up, second move-up, and importantly, the active adult sector through our Del Webb brand. We have a real focus as an organization on running a long-term business. We think people development and customer delight through our customer relations program is key.
TWST: We keep hearing rumors about the housing bubble and when it's
going to burst. What's your view?
Mr. Dugas: First, there is no national housing market in this country,
but a series of local markets that move independently and that are
driven primarily by local economic conditions. Certainly, macro factors
such as interest rates have an impact, but a change in demand in Atlanta
has no impact on new home sales in Seattle. Clearly, there is a lot of
talk about demand relative to a housing bubble, but what I think people
are missing is how the supply side of the equation has changed. The
supply of lots approved for residential construction in the United
States is extremely tight. For a variety of reasons, there is a rising
tide of anti-growth sentiment that has developed around the United
States. It used to be just on the coasts, but city-after-city throughout
the country is severely limiting the land they are willing to permit.
Given the growing population in this country, strong immigration and
positive demographics, demand has remained strong, while supply has been
reduced. The result has been very positive for the homebuilding industry
and particularly for large homebuilders. We recognize that you certainly
have a few individual markets that are going to see the rate of price
appreciation slow or even go flat for a while, because of affordability
issues, but overall we think the US housing market is in great shape.
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