July 21, 2006

So much bad news for the homebuilders, I can't keep up. 43% cancellation rate for MDC


Boy, this seems exactly like the telecom wipeout of 2001. Right when they ramped up production to meet surging demand, WHAM!, the bottom fell out of the market and all the orders got cancelled.

You just know massive layoffs, billions in write-offs and desperation pricing are next.

Check out the 43% cancellation rate for MDC, and the write offs, cancellations and use of incentives at the growing more desperate by the day D.R. Horton.

D.R.: "The current home-sales environment is characterized by an increase in both existing and new homes available for sale, higher-than-normal cancellation rates, and an increase in the use of sales incentives in many of our markets," Horton said at the time.

MDC: The cancellation rate surged to 43% from 19% the prior year, reflecting jitters over the housing slowdown.

"The cancellation rate is the highest we have seen from the publicly traded builders due to M.D.C.'s high concentration in weakening markets," said Banc of America Securities analyst Daniel Oppenheim in a research note.

5 comments:

new 200 Mbps BROADBAND over POWER LINES said...

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borkafatty said...

Florida Doom & Gloom

http://tinyurl.com/r7nln

East of LA said...

From the LA Times


Housing Expert: 'Soft Landing' Off Mark
By David Streitfeld, Times Staff Writer
July 21, 2006


Leslie Appleton-Young is at a loss for words.

The chief economist of the California Assn. of Realtors has stopped using the term "soft landing" to describe the state's real estate market, saying she no longer feels comfortable with that mild label.

"Maybe we need something new. That's all I'm prepared to say," Appleton-Young said Thursday.

The shift in language comes as debate over the real estate market is intensifying. The long-awaited drop-off is happening, but there's little agreement about how brutal the landing will be.

Federal Reserve Chairman Ben S. Bernanke said in congressional testimony Thursday that the national housing downturn so far appears orderly.

At about the same time, however, D.R. Horton Inc. Chief Executive Donald Tomnitz was telling analysts that the home builder's sales in June "absolutely fell off the Richter scale." Horton, the nation's largest builder of residential housing, has numerous projects in California.

For real estate optimists, the phrase "soft landing" conveyed the soothing notion that the run-up in values over the last few years would be permanent. It wasn't a bubble, it was a new plateau.

The Realtors association last month lowered its 2006 sales prediction from a 2% slip to a 16.8% drop. That was when Appleton-Young first told the San Diego Union-Tribune that she didn't feel comfortable any longer using "soft landing."

"I'm sorry I ever made that comment," she said Thursday. "When I get my new term, I'll let you know."

If there's one group in California still unreservedly bullish on real estate, it might be the throngs lining up to take the licensing exams.

The state Department of Real Estate recently reported that the total number of agents in the state passed 500,000 in May for the first time. That's one agent for every 55 adults in the state.

Appleton-Young had no qualms about predicting a hard landing here: "We're expecting a fairly significant shakeout."

Anonymous said...

Californicate is in for a world of hurt. One realtor for every 55 residents. How many are in the mortgage industry, carpentry, construction, Home Depots, Lowes, and other businesses servicing those workers? The Terminator might want to take early retirement before the sh*t hits the fan

Maine Real Estate Fraud said...

Funny - the feeding frenzy is still pretty big in Maine. So's the sleaze...

http://victimordeal.blogspot.com/