Residential Real Estate Construction

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Call Preparation Questions
How does the company prepare for real estate cycles?
Demand for new residential buildings can change rapidly, depending on the economy and interest rates: from 1984 to 1991, annual US home construction dropped 35 percent; from 1996 to 2006, it increased 40 percent; and from 2006 to 2007, it fell 25 percent.
How does the company protect itself from changes in home prices?
Because a large number of homes are built speculatively, builders bear the risk that changing market conditions will produce lower selling prices than they'd anticipated.
