When high-end home builder Toll Brothers caught investors off guard last week by announcing a sales slowdown, the Wall Street spin machine wasted little time explaining that the troubles are limited to Toll.
They’re not. Witness:
* In late October, the nation’s largest publicly traded housing company, Pulte Homes, cut its forecast for home closings by 4% to 7%.
* Upside earnings surprises in the group fell last quarter. The top 15 home builders beat analyst expectations by just 7.6%, according to Thomson Financial, compared to 13.7% on average for the past five quarters.
* Rates on 30-year mortgages are at their highest levels in 16 months -- and have been above 6% for the past month.
November 16, 2005
Can home builders handle a chill? As the once-hot sector cools off, the bears look for long-term misery
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11 comments:
Personal observation: Since 1960 I have been going to Open Houses in the neighborhood I live in. I always engage the Realtors in conversation.
Sunday I asked the question, "What about this Real Estate Bubble?"
Well! now I am getting emotional responses. The body language and gut level intense answers are very entertaining. Since 1960 I have not experienced such hostile attitude toward my conversation and questions. The anger in the eye of one Realtor was scary to me. My experience includes the purchase and sale of 8 homes.
"Robert Shiller, an economist whose 2000 book predicted the stock market crash, has re-released the book with a new cover warning of "the world wide real estate bubble and its aftermath."
As a person has experiences there becomes within wisdom and understanding that the bean counters cannot see.
I experienced financially that 2000 dotcom stock market crash. That experience alone gave me gut level insights.
Thursday I am reviewing a $5,200,000 Home in Hancock Park, Los Angeles. I will report back the attitude of the Realtor when I ask about the "Bubble". Wish me luck.
This Housing Bubble will crash and burn. P.S. The Commercial Real Estate is also approaching a Crash and Burn. Best to all. 41cadillac
skytrekker:
Yes, Yes, Yes. Sunday I heard from one Realtor your A and B statements.
He followed your script to the very word. he was selling a 3 bedroom bungalow home on a stamp size lot for $1,285,000.".
A.'Normal autumn slowdown'
B.A pause before things heat up in the spring.
41cadillac
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