Trouble on the Home Front

HenryTo · Posted: Wed Jan 25, 2006 9:14 am Post subject: Trouble on the Home Front

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.

HenryTo · Posted: Fri Mar 28, 2008 11:24 pm Post subject:

Foreign buyers now coming into the SoCal housing market. Note that California represents 16% of all international purchases in the US - second in popularity behind Florida - despite the fact that SoCal has some of the most overvalued (on a price-to-average-local-income basis) housing areas in the country:

http://www.latimes.com/news/nationworld/world/la-re-international23mar23,1,5435293.story

rffrydr · Posted: Thu Mar 27, 2008 10:16 am Post subject:

Spreads nudging wider again.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Tue Mar 25, 2008 8:40 am Post subject:

Latest OFHEO and Case-Shiller data:
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OFHEO: US Home Prices Fell 1.1% In January

Mar 25, 2008 10:28:29 (ET)

By Michael R. Crittenden

OF DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--U.S. home prices fell an estimated 1.1% in January, the Office of Federal Housing Enterprise Oversight said Tuesday.

The decline was much higher than the 0.6% decline seen in December, and offered the latest evidence that the housing market woes continue unabated.

Ofheo, which regulates Fannie Mae (FNM) and Freddie Mac (FRE), said home prices fell 3.0% for the 12-month period ending in January. The seasonally-adjusted index is down 4.1% from its April 2007 peak.

Regionally, the index showed the largest home price declines in New England, where purchase prices fell 2.9%. The West Coast and upper Midwest saw price declines of 2.4% and 2.3%, respectively. The only area of the country that saw prices increase was the Mountain states - including Colorado, Nevada and Arizona - where prices rose 0.1%.

The monthly declines reported by Ofheo reinforced the idea that the housing market has yet to reach a bottom. Earlier Tuesday, it was reported that the S&P/Case-Shiller home price index fell by a record 11.4% in January.

Ofheo's monthly index is based on the purchase prices of houses backing mortgages sold to or guaranteed by Fannie Mae and Freddie Mac.

-By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com

(END) Dow Jones Newswires

March 25, 2008 10:28 ET (14:28 GMT)

rffrydr · Posted: Sat Mar 22, 2008 12:02 pm Post subject:

BOE spearheading co-ordinated direct targeting of mortgages:

http://www.ft.com/cms/s/ee2328f2-f77f-11dc-ac40-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F1%2Fee2328f2-f77f-11dc-ac40-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Feurope

England has no "GSE's" and relatively small market has most to gain. Germans want to punish the unwarry--but still carrying Spain.

http://www.latimes.com/business/la-fi-foreclose22mar22,0,2025907.story

It's remarkable how hamstrung our "free market" was going into this crises in Jan. A "Super-SIV" at that time with across-the-board ARM caps and.... but maybe that's a question for the lawyers.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Thu Mar 20, 2008 8:09 am Post subject:

Average US mortgage rates, per Freddie Mac:

MARCH 20 (REUTERS) - FREDDIE MAC (FRE.N: Quote, Profile, Research) AVERAGE U.S. MORTGAGE RATES (PERCENT) FOR WEEKS ENDING:

MAR 20 MAR 13 YEAR AGO

30-YR 5.87 6.13 6.16

15-YR 5.27 5.60 5.90

5-YR ARM 5.56 5.58 5.91

1-YR ARM 5.15 5.14 5.40

rffrydr · Posted: Thu Mar 20, 2008 7:05 am Post subject:

ARM rates are still higher now than at the height of Fed Easing. Hopefully this is an extreme.

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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Thu Mar 13, 2008 8:35 am Post subject:

ARM loan Map:

http://www.businessweek.com/common_ssi/map_of_misery.htm
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Wed Mar 12, 2008 9:05 am Post subject:

This has to change for any meaningful recovery:

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Today is the Tomorrow you worried about Yesterday!

probtrader · Senior Poster Joined: 22 Oct 2005 Posts: 130

You American want switch youf big US dollar phyramid for little French art glass?? Beaucoup plus chere mon amis, beaucoup plus chere...

rffrydr · Posted: Fri Mar 07, 2008 5:04 am Post subject:

Yes, the margin calls make the bid evaporate. And when it's GSE paper (even levered at 32X) we're back to nobody trusts no-one. Once again, the govt. HAS to take this as collateral. It has to an extent, but not front and center. As a taxpayer, at these prices, I can only say go for it.

I like that pyramid. Wanna switch?
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Today is the Tomorrow you worried about Yesterday!

probtrader · Senior Poster Joined: 22 Oct 2005 Posts: 130

rffrydr · Posted: Tue Mar 04, 2008 8:32 am Post subject:

Pay option loans keeping the pressure on:

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-23497622.htm
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Tue Mar 04, 2008 8:16 am Post subject:

I've been harping on the need for the Fed to start taking in ABS, mortgages specifically, in the manner of the (much criticized) ECB. The Madman is thinking similarly. Thornberg breaking january lows bodes ill so says he:

HenryTo · Posted: Thu Feb 28, 2008 8:07 pm Post subject:

Vulture funds continue to play a very hands-on role - and trying to keep the homeowners in their house at the same time:

http://www.bloomberg.com/apps/news?pid=20601109&sid=aaKT9Z_X9okg&refer=home

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

OFHEO publishes both indices separately, sales only and including refis. The all-transactions includes refis.

Check the link (PDF) for the sales only data, it's in the summary at the beginning of the doc.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.