Even those $60,000 off fire sales can't help at this point... it's a long, long, long way back down for Centex and the other homebuilders. Just like the telecom's in 2000 - they're drowning in capacity right when the bubble blew...
Plus, if I was an accountant advising these builders, I believe they must write down the value of their inflated assets (land) to reflect current market valuations, vs. the prior bubble valuations. Just like telecom had to do (or didn't do in the case of some that are now in jail)
No. 4 U.S. home builder Centex Corp. (CTX.N: Quote, Profile, Research) on Wednesday reported a lower-than-expected quarterly profit and sharply cut its outlook as new orders fell 11 percent, sending its stock down 7 percent.
Since peaking last summer, the U.S. housing market has sagged under the weight of rising mortgage rates, which have climbed to their highest level since 2002.
"Net-net it's disappointing," said Keith Gangl, portfolio manager at Thrivent Investment Management
April 27, 2006
Centex orders fall 11 pct, slashes forecast (even firesales don't help)
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Centex is getting a great, well deserved punch in the face this morning, homes and homebuilder stocks must go back to the values they were in 2000, there is no justification for their rise, none.
So far every homebuilder has reported that orders are falling rather sharply. The Mortgage Bankers Association shows that mortgage applications YoY are down double digits almost every week since last November. Somehow the government comes out with a report showing that new home sales are up 14%. Something smells fishy, no?
actually a sale recorded today is a sale - not a home completion.
lots of cancellations to come off of these numbers in the distant future
You are right. It is a LONG way down.
When I see REO's for $75,000 instead of $300,000 for a townhouse in Alpharetta, THEN I'll get excited.
Until then, it's kinda like "blah, blah, blah."
A close today is a sale from months ago. Like I said earlier, mortgage apps have been down double digits YoY since last November. The sh*t should have hit the fan months ago.
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