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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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diesel
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| Posted: Fri Aug 27, 2010 9:32 pm Post subject: |
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With a 12% current account deficit the UK should be doing better! The problems will start if they cut that deficit too quick...
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rffrydr
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| Posted: Fri Aug 27, 2010 7:37 am Post subject: |
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Family formations averaging 1.5 million are down to .5 million last two years.
Meanwhile best construction stats since 1982 lead UK GDP numbers today:
| Quote: | | Yet, this is not a normal recovery by any standard and the drivers behind last quarter’s expansion raise considerable doubts about the sustainability of the cyclical momentum. In the expenditure breakdown released with the second GDP estimate, household spending rose 0.7%, following a 0.1% contraction in Q1, as the adverse effects of the VAT hike, inclement weather and pre-election uncertainty faded while the World Cup boosted sales. However gross fixed capital formation contracted 2.4% and exports came in weaker than expected at 1.1% after a 1.7% drop in Q1. Indeed, the contribution from foreign trade to growth has been next to zero this year as net exports added just 0.2ppts to the Q2’s quarterly pace, following a 0.1ppt deduction in Q1. In the output breakdown, construction expanded at an 8.5% pace, an up from 6.6% reported originally, which represents the highest pace since 1982. Construction accounted for 0.5% of the top-line’s 1.2% growth figure. Services growth was revised down to 0.7% from 0.9% before as air transport was disrupted due to the volcanic ash cloud from Iceland. |
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diesel
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| Posted: Thu Aug 26, 2010 3:58 pm Post subject: |
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A pick up in housing starts can’t be far off as they are very low given 1-3% GDP growth supported mainly by income helped by the govt deficit spending, lower home prices, and reasonable mortgage rates.
The surviving companies are those that have figured out how to make money in this environment, and most have massive operating leverage should GDP pick up to more normal recovery levels.
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rffrydr
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rffrydr
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| Posted: Tue Aug 24, 2010 10:10 pm Post subject: |
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$ Million-plus home sales were up BTW. And RYL rallied all day on upgrades.
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HenryTo
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| Posted: Tue Aug 24, 2010 7:39 pm Post subject: |
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Bridgewater on today's existing home sales numbers:
| Quote: | Weak Existing Sales and Tightening of Standards
Existing sales in July declined by a record 27%, about twice as much as consensus expectations. A large drop had been expected as sales had been pulled forward to take advantage of the expiring tax credit, but the magnitude of the decline was very large and may indicate some underlying weakening of demand consistent with what has been happening to consumer spending more broadly. Housing activity in the first half of the year had been only mediocre even with the tax credit support, with the availability of low credit standards and low down-payment mortgages by the FHA, with efforts to slowdown defaults and with low rates. Now a lot of the support are being scaled back at a time when underlying demand also looks to be weakening. |
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rffrydr
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| Posted: Tue Aug 24, 2010 8:20 am Post subject: |
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My Fall surprise is surprising me:
http://www.cnbc.com/id/38774985
4-year cycle lows into seasonal is now the orthodoxy. Vacations have turned against us. The BP cap is turning into one big anti-climax.
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rffrydr
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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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