Housing Rolling Along 2

Quote from Covertibility:

Interesting story of a homebuilder CEO who sold $88.4 million of the company's stock this year.

NVR's Schar Earns It for Himself, His Investors
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"Interesting" would be the correct term indeed.

Of course the article glosses over the firms 1992 bankruptcy (most "homies" go BK in cyclical downturns)...and the small fact that this firm, NVR, just missed it's earnings!

Gee...I wonder why he was selling so much stock!

http://yahoo.reuters.com/financeQuo...tfh81992_2005-10-20_22-12-56_n20330212_newsml

"Earlier this week, home builder NVR Inc.(NVR.A: Quote, Profile, Research) reported quarterly earnings that missed Wall Street's projections, blaming it on the weak Washington market. NVR, based in Reston, Virginia, has the greatest market share in the area."

"In addition to NVR, Toll Brothers Inc.(TOL.N: Quote, Profile, Research) , Hovnanian Enterprises Inc.(HOV.N: Quote, Profile, Research) and Comstock Homebuilding Companies Inc. (CHCI.O: Quote, Profile, Research) have the greatest exposure to Washington. They report later, but Comstock said net new orders in the quarter fell by nearly 60 percent."
 
http://yahoo.reuters.com/financeQuo...tfh81992_2005-10-20_22-12-56_n20330212_newsml

"Earlier this week, home builder NVR Inc.(NVR.A: Quote, Profile, Research) reported quarterly earnings that missed Wall Street's projections, blaming it on the weak Washington market. NVR, based in Reston, Virginia, has the greatest market share in the area."

"In addition to NVR, Toll Brothers Inc.(TOL.N: Quote, Profile, Research) , Hovnanian Enterprises Inc.(HOV.N: Quote, Profile, Research) and Comstock Homebuilding Companies Inc. (CHCI.O: Quote, Profile, Research) have the greatest exposure to Washington. They report later, but Comstock said net new orders in the quarter fell by nearly 60 percent." [/B][/QUOTE]

Weak housing market in Washington?!?!?

If there is one area in this country that should be able to hold some of its bubble value, it is going to be the DC area. Big government employment is, if nothing else, at least consistent allowing for people to execute long term plans.

One more reason why I am a housing permabear.
 
i figure the hgx will just consolidate here. the high rate of growth is behind us, but companies don't crash when they continue to grow >10-15% EPS a year.

also, if the stock market makes new highs, there's no stopping these stocks from rising. that's just the way the market works.


Quote from drsteph:

http://yahoo.reuters.com/financeQuo...tfh81992_2005-10-20_22-12-56_n20330212_newsml

"Earlier this week, home builder NVR Inc.(NVR.A: Quote, Profile, Research) reported quarterly earnings that missed Wall Street's projections, blaming it on the weak Washington market. NVR, based in Reston, Virginia, has the greatest market share in the area."

"In addition to NVR, Toll Brothers Inc.(TOL.N: Quote, Profile, Research) , Hovnanian Enterprises Inc.(HOV.N: Quote, Profile, Research) and Comstock Homebuilding Companies Inc. (CHCI.O: Quote, Profile, Research) have the greatest exposure to Washington. They report later, but Comstock said net new orders in the quarter fell by nearly 60 percent."
Weak housing market in Washington?!?!?

If there is one area in this country that should be able to hold some of its bubble value, it is going to be the DC area. Big government employment is, if nothing else, at least consistent allowing for people to execute long term plans.

One more reason why I am a housing permabear.
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Here is a Canadian perspective on this:

Bank of Canada has now raised overnight rates twice by 25bps, first in September, again in October. Their brief PR at time of rate announcement indicates that further rate hikes through 2006 will likely be necessary in order to keep inflation in check.

I've now read a few analysts in the business news speculating that rates will likely increase by another 150bps (1.5%) between now and this time next year, which would bring the overnight rate to 4.50% and our banks' prime rate to about 6.25%. I work for a mortgage company, and many customers are currently in either variable rate mortgages or mortgages with fixed interest rates for short term lengths (e.g. 1yr, 3 yr). We are very, very busy right now due to clients with variable rates looking at converting into fixed interest rate terms.

Based on the above, I personally think that the Canadian housing market is going to be a fair bit different next summer, at the very least I think that prices are going to start to level out. There are many people carrying very large mortgages right now (particularly first time home buyers), and these changes to interest rates are going to really start to hurt.
 
U.S. September Existing Home Sales Hold at 7.28 Million Rate

U.S. sales of previously owned homes were unchanged in September from a month earlier, matching the second-highest level on record and suggesting the recent rise in mortgage rates has yet to slow demand.

Existing home sales of 7.28 million at an annual rate were second only to a 7.35 million pace in June, the National Association of Realtors said today in Washington. The median price of a previously owned home rose 13.4 percent from the same month last year to $212,000.

Thirty-year fixed mortgage rates within a percentage point of a four-decade low are helping to blunt higher home prices this year that have caused housing affordability to plunge to a 14-year low. Sales of new and previously owned homes probably will reach a record this year and then slow in 2006, economists and the National Association of Realtors forecast.

Higher mortgage rates and rising home prices are likely to ``have a slight braking action'' on housing next year, National Association of Realtors President Al Mansell said in a statement on Oct. 12. ``As a result, there should be a cooling in the rate of price growth.''

The Realtors group forecasts previously owned home sales this year to reach a record 7.1 million this year and 6.86 million in 2006. Sales of new homes will total 1.29 million, also an all-time high, the group estimates. The Commerce Department is scheduled to release the September new home sales report on Oct. 27.

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So now comes the flattening out period. Oh the sideways grind.

I am a little curious to see what happens over time in the areas noone wants to live, ie. landlocked states. Does these areas catch up with the price appreciation seen in the more desirable places or will they futher fall behind.
 
we are having home sales similar to the auto sales incentives. has to be a top.

Centex Homes Rolls Out Employee Pricing Plus Program
Wednesday October 26, 4:18 pm ET


ALPHARETTA, Ga., Oct. 26 /PRNewswire/ -- Centex Homes and Fox and Jacobs Homes by Centex announce spectacular savings opportunities for a limited time. Employee Pricing Plus offers purchasers a 5% employee discount plus up to $20,000 in additional incentives on select homes financed through CTX Mortgage. In addition to these incredible savings, CTX Mortgage is also waiving the 1% loan origination fee. There has never been a better time to buy a Centex Home!
 
Quote from Covertibility:

Ya gotta have patience with this sector. Look at the history of these guys and you'll see they're slow movers.

I remember someone calling this a POS.
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POS death march continues...


Toll Bros down again big today...now 41.16% down from the July highs. Actually not such a slow mover at all, down over 41% in three months!

DH Horton down big too, now 32.79% from July highs.

Stay tuned.
 
cramer had ken hebner on his show tonight. he was one of the original housing stocks bulls and made a lot of money in them. he said the decline is not over and he sees up to a 50% decline in high end home prices. this will continue to pressure the stocks.
 
Quote from vhehn:

cramer had ken hebner on his show tonight. he was one of the original housing stocks bulls and made a lot of money in them. he said the decline is not over and he sees up to a 50% decline in high end home prices. this will continue to pressure the stocks.
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I eagerly await the respone of the real estate perma-bull you folks have on this thread. I figure it is safe to assume he is frantically trying to unload all of his speculative condo purchases as we type. May God have mercy on him. Good day.
 
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