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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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rffrydr
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| Posted: Mon Jun 28, 2010 9:20 pm Post subject: |
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Ned Davis Research in latest Mauldin:
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rffrydr
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| Posted: Wed Jun 23, 2010 7:37 pm Post subject: |
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NAR survey from the broker:
| Quote: | | A parallel NAR practitioner survey3 shows first-time buyers purchased 46 percent of homes in May, down from 49 percent in April. Investors accounted for 14 percent of transactions in May compared with 15 percent in April; the remaining sales were to repeat buyers. All-cash sales were at 25 percent in May, edging down from a 26 percent share in April. Total housing inventory at the end of May fell 3.4 percent to 3.89 million existing homes available for sale, which represents an 8.3-month supply4 at the current sales pace, compared with an 8.4-month supply in April. Raw unsold inventory is 1.1 percent above a year ago, but is still 14.9 percent below the record of 4.58 million in July 2008. Single-family home sales declined 1.6 percent to a seasonally adjusted annual rate of 4.98 million in May from a pace of 5.06 million in April, but are 17.5 percent above the 4.24 million level in May 2009. The median existing single-family home price was $179,400 in May, which is 2.7 percent above a year ago. Single-family median existing-home prices were higher in 16 out of 20 metropolitan statistical areas reported in May from a year ago. In addition, existing single-family home sales rose in 18 of the 20 areas from May 2009. Existing condominium and co-op sales fell 6.8 percent to a seasonally adjusted annual rate of 680,000 in May from 730,000 in April, but are 32.6 percent above the 513,000-unit pace in May 2009. The median existing condo price5 was $181,300 in May, up 3.4 percent from a year ago. Regionally, existing-home sales in the Northeast fell 18.3 percent to an annual level of 890,000 in May from a surge in April, but are 12.7 percent higher than a year ago. The median price in the Northeast was $240,200, down 2.2 percent from May 2009. Existing-home sales in the Midwest were unchanged in May at a pace of 1.33 million and are 22.0 percent above May 2009. The median price in the Midwest was $150,700, up 2.2 percent from a year ago. In the South, existing-home sales increased 0.5 percent to an annual level of 2.15 million in May and are 22.9 percent above a year ago. The median price in the South was $159,000, up 1.0 percent from May 2009. Existing-home sales in the West rose 4.9 percent to an annual rate of 1.29 million in May and are 15.2 percent higher than May 2009. The median price in the West was $221,300, up 7.4 percent from a year ago. |
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rffrydr
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rffrydr
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| Posted: Sun May 16, 2010 8:10 am Post subject: |
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Sometimes it doesn't have to turn...to turn. On building something out of nothing and the "gospel of the second chance," in, where else, fabulous Las Vegas:
http://www.nytimes.com/2010/05/16/business/16builder.html?hp
| Quote: | | “We’re building them because we’re selling them,” Mr. Anderson said. “Our customers wouldn’t care if there were 50 homes in an established neighborhood of 1980 or 1990 vintage, all foreclosed, empty and for sale at $10,000 less. They want new. And what are we going to do, let someone else build it?” |
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rffrydr
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| Posted: Sun Apr 11, 2010 7:53 pm Post subject: |
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It's turned in California...and that's what matters. The $1mm is in for some structural changes but we can take it.
Also remember that those rows of detroit crack-houses and desert hide-a-ways are still counted as "shadow-inventory." I still believe SFRs to be a non-investment entity for the next decade or more. If you're looking for someplace to live, they're great.
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HenryTo
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| Posted: Sun Apr 11, 2010 11:44 am Post subject: |
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Robert Shiller assets that the anticipated turnaround in housing and housing prices may be unfounded:
http://www.nytimes.com/2010/04/11/business/economy/11view.html
| Quote: | So, because home prices have been climbing of late, isn’t it plausible that they’ll keep doing so?
If only it were that simple.
Home price booms and busts do end, sometimes quite suddenly, as was the case for the boom of 1995 to 2006 and the bust of 2006 to 2009. Today, we need to worry about strong headwinds, as the government begins to withdraw its support of a still-troubled lending industry and as foreclosures are dumping millions of homes onto the market.
Consider some leading indicators. The National Association of Home Builders index of traffic of prospective home buyers measures the number of people who are just starting to think about buying. In the past, it has predicted market turning points: the index peaked in June 2005, 10 months before the 2006 peak in home prices, and bottomed in November 2008, six months before the 2009 bottom in prices.
The index’s current signals are negative. After peaking again in September 2009, it has been falling steadily, suggesting that home prices may have reached another downward turning point.
But why? Unfortunately, it is hard to pinpoint causes for a change in demand for housing. The factors clearly include government economic policy, like interest-rate changes and tax credits. But these moves don’t line up neatly with major turning points in the market. |
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HenryTo
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rffrydr
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rffrydr
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| Posted: Thu Mar 18, 2010 10:09 am Post subject: |
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Tom Graff
Note on Fed MBS purchases
3/18/2010 11:03 AM EDT
| Quote: | Yesterday Brian Gilmartin asked in CC about the Fed's end of the MBS purchase program. One thing readers should consider is that while the Fed won't be actively buying any more bonds, the impact will remain for a while longer. Currently the Fed has purchased so many 4.5% and 5% MBS in the TBA (to be announced) market that they haven't been getting full delivery. Sort of as if you bought a block of some stock that was actually more than the available float.
As more loans come to market, the Fed is eventually getting filled, but the impact on MBS prices will probably last until at least more of the Fed's purchases actually settle. |
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rffrydr
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| Posted: Thu Mar 11, 2010 8:44 am Post subject: |
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US foreclosure filings rose at the slowest pace in four years in February. There were 308,524 properties, which received a notice of default. Filings were up 6% y/y – RealtyTrac.
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rffrydr
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| Posted: Thu Feb 25, 2010 2:16 pm Post subject: |
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Far too long putting some traction into where the rubber meets the road:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahuuwBS8KYq8&pos=2
On a side note: I was "perusing" the ol' 1040 IRS instructions last night and came across this "tip." Make sure you withheld cap. gains taxes on a home you might have bough from a foreign national last year--guess who's left holding the bag? No doubt there was more than a little here of offshore cash pumping things up.
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rffrydr
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rffrydr
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| Posted: Sat Feb 20, 2010 8:29 am Post subject: |
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Life at the top:
"The story of celebrities knocking on doors and overpaying for a house they 'have to have' still floats around," Malibu agent Gardner said.
Reinforcing the popular myth, Cotton said, is that "every once in a while the real estate god looks down and someone will buy a place that's overpriced."
http://tinyurl.com/yg9a674
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rffrydr
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| Posted: Fri Feb 19, 2010 4:59 pm Post subject: |
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Though I'm the kind who'd run that pirate Nardelli through on sight this package doesn't really bother me. Yeah, it should be in stock certificates and warrants--and, doubtless, old man Pulte would be collecting on that.
But here's a guy who no doubt at one time spent every waking moment in zoning schemes and underhanded county politics. He probably saved some desert tortoises and planted a forest of trees. And no doubt he's made many a housewives truly happy. How many of us can say that? But you get the point: a lifetime of work on a company that bears your name and, economy or no, will continue. And is measured in the billions.
He could sell leaps at Goldman while he takes time to put his estate in order. And we'd give him a pass. Looks like they laid off all their PR men.
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nodoodahs
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| Posted: Fri Feb 19, 2010 2:50 pm Post subject: |
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The homeys are rife with this kind of scandal. I remember a group of four or so insiders at one publicly-traded homebuilder was selling off their holdings into a company stock-buyback that they, as management, happened to arrange.
I think that particular homebuilder merged with Pulte late last year ...
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