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Trouble on the Home Front
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HenryTo
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PostPosted: Wed Jan 25, 2006 9:14 am    Post subject: Trouble on the Home Front Reply with quote

FYI:
--------------------------------------------------------------------------------
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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PostPosted: Thu Jan 26, 2006 12:23 am    Post subject: Why????? Reply with quote

"For some reason, people take their cues from price action rather than from values. What doesn't work is when you start doing things that you don't understand or because they worked last week for someone else."

--Warren Buffett
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rffrydr
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PostPosted: Fri Jan 27, 2006 7:31 am    Post subject: Reply with quote

The number of homes sold in Southern California was flat last year, the first year sales hadn't increased since 1996, according to research firm DataQuick Information Systems.

http://www.latimes.com/business/la-fi-starts27jan27,0,1537237.story?coll=la-home-headlines&track=morenews
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rffrydr
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PostPosted: Thu Jan 25, 2007 10:41 am    Post subject: Reply with quote

Bad news continues with RYL today:

http://www.latimes.com/business/la-fi-ryland25jan25,1,3859695.story?coll=la-headlines-business

And for first time in awhile, stock down. Short sqeeze may be over.

Follow the condos?

http://www.cnbc.com/id/15840232?video=169969441&play=1
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rffrydr
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PostPosted: Fri Jan 26, 2007 9:28 am    Post subject: Reply with quote

Motley finds light inthe RYL numbers:

http://www.fool.com/investing/small-cap/2007/01/25/ryland-puts-the-hammer-down.aspx
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rffrydr
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PostPosted: Tue Jan 30, 2007 8:38 am    Post subject: Reply with quote

"Over-strapped Homeowners" is title of bullish interview:

http://www.cnbc.com/id/15840232?video=172282474&play=1#
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PostPosted: Wed Jan 31, 2007 1:55 pm    Post subject: Reply with quote

...and right on cue, homebuilders love the FED today.
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PostPosted: Wed Feb 07, 2007 12:01 am    Post subject: Reply with quote

Yesterday, LPX said that Q1 looks and feels a lot like Q4 implying no major recovery in lumber demand. LPX saw continued depressed pricing and noted the inventory of new and existing homes hanging over the housing market. The MBA purchase index has bottomed and is working higher, but the path of increase has been choppy. Spring will tell.
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PostPosted: Wed Feb 07, 2007 12:06 am    Post subject: Reply with quote

Yes, spot price of lumber still near lows.

http://www.futuresource.com/charts/charts.jsp?s=LB&o=&a=W&z=800x550&d=medium&b=CANDLE&st=

Yes, we won't really find out until spring, when the REAL (as opposed to seasonally-adjusted) activity occurs. Stay tuned.
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PostPosted: Fri Feb 23, 2007 7:10 am    Post subject: Reply with quote

First jitters of Spring. TOLs report of ome traffic over Pres. day weekend was lower than they had seen; disappointing, MBNA dropped back
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PostPosted: Fri Feb 23, 2007 8:21 am    Post subject: Reply with quote

As California RE goes so goes the country. The bad--and good, in the secondary Vacation Home Market:

http://www.latimes.com/business/la-fi-homes23feb23,1,5120913.story
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PostPosted: Sun Mar 04, 2007 8:35 pm    Post subject: Reply with quote

Here it is in all its absurdity: a financial press that brings you "up-to-the-minute" analysis with live charts ticking off in 100th/second increments wants to know what the "effect" is on housing:

http://www.cnbc.com/id/15840232?video=198377319&play=1#

RE guys just smile. It's two diffent worlds--bound together like the earth to its moon.

Question: does capitalism and global warming mix?
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PostPosted: Sun Apr 08, 2007 8:26 am    Post subject: Reply with quote

Well here's the spillover measured in Dollars and Cents:

http://www.nytimes.com/2007/04/08/us/08housing.html?_r=1&hp&oref=slogin

The debate is framed:

[Quote]“Real estate is going to be a drag on the rest of the economy,” said Ryan Ratcliff, an economist for the Anderson Forecast at the University of California, Los Angeles, referring to California’s situation. “But previous recessions have always had construction plus something else combining to create job loss. Without a second source of weakness, we’re predicting sluggishness, but not a recession.”[\Quote]

Quote:
“The tendency is for people to say, ‘Wow, things look pretty good, except for housing,’ ” said Richard Nathan, co-director of the Nelson A. Rockefeller Institute of Government in Albany. “But that is a very big exception, because it has a large impact on people’s perceptions of what they feel their asset capability is.




Obviously Florida is focus--but nothing speculative about hedge-fund capital Connecticut where tax revenues are down 13% from an anticipated "soft landing" of 1.3%. Arizona, California, Nevada, Connecticut, Maryland, Colorado, Florida, South Carolina, all suffering contemporaneusly with the market. As lagging an indicator as Government numbers on anything are supposed to be, one is forced to ask, What really has been "discounted"?


State run lotteries? --That's a new spin on privatization of infrastructure!


Quote:
In one hint of how much Floridians were relying on property wealth during the real estate boom, 16 percent of new car purchases here were being made with home equity loans in 2006, compared with 7 percent nationally, according to CNW Marketing Research, an automotive research firm in Bandon, Ore. In California, the percentage was even higher — about 30 percent, said Art Spinella, the firm’s president.

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PostPosted: Mon Apr 09, 2007 5:53 pm    Post subject: Reply with quote

Subprime in the rearview mirror:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aCcktIgjSO6U&refer=home
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PostPosted: Mon Apr 09, 2007 6:37 pm    Post subject: Reply with quote

Countrywide, less than 10% subprime, leading insider charge--for the exits:

http://www.thestreet.com/_googlen/funds/followmoney/10345737.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA
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