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.

rffrydr · Posted: Sat Oct 20, 2007 5:33 am Post subject:

Here lies the true margins of the housing market:

http://www.latimes.com/business/la-fi-retirelatam-sp,0,1885714.special?coll=la-home-center

They're not talking about holing up in an apartment in Mexico City. These are full housing tracts carved from nature, built up in fine Orange County style anf fully occupied by gringos. With their own cars.

15K for a "Flight to Life" trip to Miami for emergency medical and the "savings" soon evaporate. Costa Rica was the role model and became priced like anywhere here in the US. Prices I remember in one of these tracts in Panama were running about $250,000 in '04. It'll be interesting to watch.
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Sat Oct 20, 2007 5:25 am Post subject:

Note the site financing:

HenryTo · Posted: Sat Oct 20, 2007 4:48 am Post subject:

300 homes in Minnesota may be a small number but it is no laughing matter, given that houses (just like everything else) are priced at the margin. Of course, it one home in a 10,000 unit neighborhood sells for 75% of where it sold at a year ago, it could be classified as an anomaly, but if it was a house that was sold right next door - then, that's a different story:

http://www.startribune.com/462/story/1496691.html

rffrydr · Posted: Wed Oct 10, 2007 11:18 pm Post subject:

Paulson's "directive":

http://www.cnbc.com/id/15840232?video=553819520&play=1
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Wed Oct 10, 2007 8:45 am Post subject:

Follow the slashmarks:

http://www.streamfx.com/CW/9-26-2007/REO-California.html
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Fri Oct 05, 2007 8:02 am Post subject:

I read that this morning and the part breaking down the imput costs on an average home was notable--not just for the discounts in the auctions but on an absolute basis. $450,000, without appreciation is gonna keep average families OUT of the american dream by mathematics alone. --Ah the condo, home sweet home.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Fri Oct 05, 2007 12:45 am Post subject:

Homebuilders Liquidate Assets as Threat to Survival Spurs Sales

http://www.bloomberg.com/apps/news?pid=20601068&sid=adFsGVxspArw&refer=economy

rffrydr · Posted: Mon Oct 01, 2007 11:43 pm Post subject:

Tick by tick:

http://www.investorvillage.com/thread.asp?mb=4148&pt=m&tid=3119861
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Sat Sep 29, 2007 1:22 pm Post subject:

BCA on homebuilders:

http://www.bankcreditanalyst.com/public/story.asp?pre=PRE-20070927.GIF

rffrydr · Posted: Fri Sep 28, 2007 7:49 am Post subject:

Last in, first out: pain is greatest at the "margins"

http://www.fresnobee.com/263/story/149594.html
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Thu Sep 27, 2007 8:03 am Post subject:

KB Homes flagging a 50% cancellation rate.

Existing Home prices are finally beginning to fall which may enable these commitments to firm--ironically.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Tue Sep 25, 2007 10:14 am Post subject:

XHB making a new low as I am typing this - led by LEN.

HenryTo · Posted: Fri Sep 07, 2007 9:19 am Post subject:

Story on Beazer:
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CORRECTED: Beazer's notes trustee claims company in default
Friday September 7, 11:06 am ET

CHICAGO (Reuters) - Home builder Beazer Homes USA Inc (NYSE:BZH - News) said on Friday it received "purported" default notices related to some senior notes from the bank that serves as trustee for the notes, sending shares down as much as 13 percent.

Beazer, already facing a deteriorating housing market as well as two separate pending probes related to its mortgage-origination business, said it believes the notices of default "are invalid and without merit."

U.S. Bancorp (NYSE:USB - News), parent of U.S. Bank, declined immediate comment.

Last month, Beazer sued U.S. Bank, the trustee for the senior notes, in federal court in Atlanta, asking the court to rule that a delay in filing its quarterly financial report did not constitute a default on $1.3 billion of its outstanding notes.

As a trustee, U.S. Bank acts as middleman between Beazer and its bondholders, providing administrative services such as distributing interest payments. It also passes on notices of default if certain conditions are not met. The bank does not necessarily have lending exposure to Beazer.

U.S. Bank said in the notices that Atlanta-based Beazer is in default because it has not yet filed its quarterly report for the period ended June 30. The notices allege the defaults will become "events of default" if not remedied within 60 days, Beazer said.

The home builder said its agreements related to the notes require delivery of quarterly reports to U.S. Bank within 15 days of their submission to regulators. It previously said it had delivered every quarterly report as required and never missed a bond payment.

Beazer said on August 15 its delay in filing its third-quarter Form 10-Q was due to internal probes into the company's mortgage origination business.

It said last month its former chief accounting officer, who was fired, may have caused reserves and other accrued liabilities to have been recorded in prior accounting periods above what is allowed under generally accepted accounting principles. The company said resolution of the issue would not affect its reported cash position.

In July, Beazer disclosed the SEC was investigating possible violations by the company of U.S. securities laws.

Earlier this year, Beazer disclosed it was the subject of several lawsuits as well an informal SEC probe and a U.S. Attorney's investigation into practices in its mortgage business.

On Friday, Beazer's shares fell as low as $9.50, before easing to $9.90, down $1.01, or 9.3 percent, in early trading on the New York Stock Exchange.

rffrydr · Posted: Fri Sep 07, 2007 9:10 am Post subject:

Hovanian puking up 13000 more homes. Beazer receives default notice after saying not in default.

Are we looking for hombuilder bust as institutional wreck?
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Thu Sep 06, 2007 9:22 am Post subject:

It's those guys in Cali and Florida again:

http://www.marketwatch.com/news/story/new-foreclosures-set-record-latest/story.aspx?guid=%7B5266FE43%2D10D5%2D4469%2DAABE%2D7F6885DA05A3%7D&dist=SecMostRead

At some point comments like this will become quaint: