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Trouble on the Home Front |
HenryTo
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 Posted: Wed Jan 25, 2006 9:14 am Post subject: Trouble on the Home Front |
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FYI:
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Trouble on the Home Front
By Nicholas Yulico
TheStreet.com Staff Reporter
1/25/2006 9:48 AM EST
URL: http://www.thestreet.com/markets/realestate/10263958.html
Homebuilders Centex (CTX:NYSE) and Ryland (RYL:NYSE) both reported strong quarterly earnings, but their new-order numbers, which will drive future growth, look dismal.
Calabasas, Calif.-based Ryland said its net income rose 49% to $162 million, or $3.32 per share, compared to $108.7 million, or $2.17 per share, a year earlier. The results handily beat the consensus $3.12 estimate on First Call.
But Ryland's unit orders fell 5% year-over-year for its latest quarter. The lackluster performance led A.G. Edwards analyst Greg Gieber to cut his rating on Ryland to sell. He also dropped his 2006 EPS estimate to $10.25 from $10.90. In a research note Wednesday morning, Gieber noted that the only area of strength in Ryland's orders came from Texas, where unit sales were up 27%. However, the average selling price in Texas is 36% below the company's average, with equally low gross margins, he said.
"Using our new 2006 EPS estimate, Ryland currently trades at a 7.3 times multiple. That is a 12% premium to the group's current average 2006 multiple of 6.5 times. We don't believe Ryland warrants any premium to the group," Gieber wrote.
Centex, which reported a 30% increase in its quarterly earnings, reported order growth, but it was weaker than analysts expected.
The Dallas-based builder said its new orders rose 4% to 8,128 homes. Sales were strongest in the Southwest, where orders spiked 28% year over year. On the West Coast, orders rose 10%. But orders fell 15% in the Southeast, 8% in the mid-Atlantic and 3% in the Midwest.
"This is not particularly positive to hit only 4%, though we don't know all the details behind it," says Gieber, who was expecting nearly 11% order growth.
Centex said net income rose to $329.3 million, or $2.49 a share, for its fiscal third quarter ending Dec. 31, up from $253.8 million, or $1.91 a share, a year earlier. Excluding discontinued items, Centex posted earnings of $332.7 million, or $2.52 a share. Analysts expected earnings of $2.48 a share, according to Thomson First Call.
Revenue rose 25% to $3.74 billion, shy of analysts forecast of $3.81 billion.
Centex's earnings growth came amid an 18% increase in home closings, which rose to 9,504 units from 8,047, and a 130-basis-point jump in operating margin.
The weak orders will likely be a focus on both companies' conference calls Wednesday morning. Homebuilder Meritage (MTH:NYSE) will also report earnings today at an unspecified time.
The existing home sales data comes out at 10 a.m. EST from the National Association of Realtors.
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HenryTo
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HenryTo
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rffrydr
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HenryTo
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| Posted: Wed Apr 30, 2008 12:13 am Post subject: |
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FYI:
Delinquency Rate
Growing More Slowly
http://online.wsj.com/article/SB120951348606254561.html?mod=RealEstateMain_1
| Quote: | Among pools of subprime mortgages made in the second half of 2005, the proportion of loans that were more than 60 days delinquent rose by 1.23 percentage points in April to 35.9%. That compared with a 1.61-percentage-point increase in March, a 2.36-point increase in February and a 2.64-point rise in January, according to a report from Wachovia Capital Markets. The report said similar trends were observed in April for loans made in 2006 and the first half of 2007. On average, between 25% and 40% of the subprime loans in these groups are more than 60 days delinquent.
While it is hard to predict when the subprime market will hit bottom, some analysts think the recent data indicate that some sort of stabilization is under way.
"The trajectory is beginning to flatten out, and this could be a turning point for prices" of mortgage securities, said Glenn Schultz, a senior analyst at Wachovia. As many poorly underwritten subprime loans made between mid-2005 and mid-2007 go bad early in their lives, Mr. Schultz expects the remaining loans to perform more normally.
In recent weeks, some portions of the ABX indexes have bounced off their record lows, and traders say some investors are buying subprime bonds again after their market prices dropped to deeply discounted levels.
But many market participants remain skeptical or bearish about the outlook for subprime. Richard Parkus, an analyst at Deutsche Bank Securities, says the recent remittance data showed "no clear evidence of any recovery," and his firm continues to expect extraordinarily high levels of losses among subprime loans. |
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dknoester
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rffrydr
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| Posted: Tue Apr 22, 2008 8:18 am Post subject: |
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Back to six on the conforming.
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rffrydr
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rffrydr
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rffrydr
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| Posted: Wed Apr 16, 2008 11:46 am Post subject: |
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There's a qualitative issue here that'll probably accelerate the turn. The big far-suburban developement cities here with the posterboy for all things RE are getting hit hard. Meanwhile urban So. Cal holds up surprisingly well. The vast tracts of homes that were tolerated by sellouts rolling their profits into more for less in hopes of doing it all again among others, are paying a premium to "get close." Crude and time cut one way; depreciation the other. Look for "the other side of the tracks" to take on a whole new meaning;as well as geography.
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HenryTo
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rffrydr
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HenryTo
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| Posted: Tue Apr 15, 2008 1:03 am Post subject: |
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An ongoing discussion on the U.S. housing market on the GaveKal discussion forum. Note that I have put my "two cents" in towards the bottom of the comments:
http://gavekal.com/forum3/default.aspx?f=2&m=2624 |
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HenryTo
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rffrydr
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rffrydr
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| Posted: Mon Apr 07, 2008 7:31 am Post subject: |
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McMansions come late:
http://www.cnbc.com/id/23993467
| Quote: | | Bogdanovic and Arko have sold many foreclosed properties to investors looking to rent them out. But there's no market for a million-dollar rental property, they say. |
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