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rffrydr
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rffrydr
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rffrydr
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HenryTo
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 Posted: Tue May 29, 2007 8:52 am Post subject: |
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Even the optimistic NAHB is stating on the record that housing starts won't return to its peak levels until 2011:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKQoeHb1MraI&refer=home
| Quote: | The inventory of unsold homes is the largest since the Washington-based National Association of Realtors started counting them in 1999 and house prices have suffered the steepest drop since the Great Depression, according to the realtors' group. Defaults and foreclosures also may rise as about $650 billion of loans to subprime borrowers, those with poor or limited credit histories, reset at higher interest rates by 2009.
``I'll break out the champagne a year from now after the resetting of the mortgage rates and defaults come in less than what we're fearful about,'' said Susan Wachter, a real estate professor at the Wharton School at the University of Pennsylvania in Philadelphia. ``For now, for the sake of the wider U.S. economy, the homebuilders have to start clearing out their inventory.'' |
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rffrydr
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HenryTo
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| Posted: Tue Jun 26, 2007 8:59 am Post subject: |
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Lennar reports "surprising" loss:
http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=LEN:US&sid=aP3YBFazXJlA
| Quote: | The net loss was $244.2 million, or $1.55 a share, in the three months ended May 31, compared with net income of $324.7 million, or $2, a year earlier, Miami-based Lennar said today in a statement. Revenue tumbled 37 percent to $2.88 billion, the biggest drop in at least 10 years.
Chief Executive Officer Stuart Miller said he sees no sign of a housing recovery and the Commerce Department reported that purchases of new homes in the U.S. dropped in May. Rising defaults among subprime borrowers and mortgage rates close to an 11-month high are hampering sales even as builders cut prices.
Lennar, the largest builder by revenue, has been quick to start cutting its inventory of land before other builders, said Eric Landry, an analyst at Morningstar Inc. in Chicago. The company has reduced debt, he said.
``They are positioned to exit this downturn, whenever it comes, as a stronger company than when they entered it,'' said Landry, who doesn't own Lennar shares. |
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rffrydr
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| Posted: Tue Jun 26, 2007 2:40 pm Post subject: |
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I know an executive at a major builder: three months back he was ridiculing the media; today, he's looking for a new "position." Money came from his "bonus." Bonus has gone bye-bye.
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rffrydr
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HenryTo
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| Posted: Fri Jul 20, 2007 8:09 pm Post subject: |
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Moody's Economy.com says Florida could be in recession as early as October, driven by a huge glut in the local housing market. Obviously, nobody told these folks about the subprime problem and that housing prices have pretty much stopped rising across the US:
http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=a4qa.rYTWyYA
| Quote: | ``Florida is the epicenter for all the problems that exist in the housing industry,'' said Lewis Goodkin, president of Goodkin Consulting Corp. and a property adviser in Miami for the past 30 years, who also foresees a recession. ``The problems we have now are unprecedented and a lot of people will get burnt.''
Thirty-seven new high-rise condos and 20,000 new units are being built in Miami's 1,040-acre downtown, where sales fell almost 50 percent in May, according to the Florida Association of Realtors. The new units will join the 22,924 existing condos in Miami-Dade County that were for sale in April, according to Jack McCabe, chief executive officer of McCabe Research & Consulting LLC in Deerfield Beach, Florida. That's the most unsold units since McCabe began tracking sales in 2002.
``Have you been to Miami lately?'' Florida Governor Charlie Crist said at a homebuilders' conference last week in Orlando. ``It's like we have a new state bird: the building crane.'' |
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HenryTo
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| Posted: Thu Jul 26, 2007 9:36 am Post subject: |
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D.R. Horton and Beazer Homes report losses:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCgCXXEagtzI&refer=home
| Quote: | ``We don't see a lot of strength in any of our markets currently,'' Donald Tomnitz, D.R. Horton's chief executive officer, said on a conference call. ``Our sales in each month of the quarter were choppy.''
Orders fell 40 percent to 8,559 houses in the quarter from 14,316 a year earlier. The backlog, or homes under contract and not yet sold, was 15,801 houses, down 37 percent from a year earlier. In the year-earlier third quarter, D.R. Horton had net income of $292.8 million, or 93 cents a share.
At Beazer Homes, the company took $123 million in pretax chares for inventory impairments and to abandon land option contracts. Revenue declined 37 percent to $761 million, the Atlanta-based company said today in a statement.
Beazer closed sales on 2,666 homes in the quarter, a 36 percent drop from a year ago. New orders fell 30 percent to 3,055.
The company reduced its backlog of unsold houses by 37 percent. As of June 30, it had 5,952 unsold properties on the ledger with an estimated sales value of $1.69 billion. At the same time last year, Beazer had 9,449 unsold properties valued at $2.85 billion.
Beazer said on July 23 that the U.S. Securities and Exchange Commission has also opened a formal probe to determine if anyone at the company violated securities laws. |
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HenryTo
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dash
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| Posted: Wed Aug 01, 2007 9:59 am Post subject: |
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Yet unlike AHM yesterday, this news isn't dragging markets lower (at least for the moment).
Isn't this the kind of thing which normally happens at inflection points? |
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HenryTo
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| Posted: Wed Aug 01, 2007 10:09 am Post subject: |
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| Yes, but we're probably due for another bounce here, but I think there are still more surprises lurking over the next couple of months. The builders are just a small part of a market portfolio, unless you're Bill Miller, of course. |
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rffrydr
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| Posted: Wed Aug 01, 2007 10:20 am Post subject: |
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The SEC investigation on Beazer Mortgages may be the problem today.
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rffrydr
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