From MarketWatch:
Home builders tighten their belts
While an uncertain housing market anxiously monitors the spring selling season for hints of a turnaround, home-builder chief executives are keeping a close eye on their costs and the overhang of unsold homes on the market.
“The key to the analysis of where home builders are is the amount of speculative inventory still remaining on the market,” said Robert Toll, CEO of luxury builder Toll Brothers Inc., during a Web cast at a Citigroup-sponsored conference Wednesday.
In response to slower sales, D.R. Horton Inc. CEO Donald Tomnitz said since the market’s top, the company has reduced its homes under construction by 35%, and cut the number of lots owned and optioned by roughly 25% since the end of March 2006.
In one of the conference’s more memorable quotes, the CEO also said he expects 2007 to “suck” for home builders with the market not recovering until 2008 at the earliest.
Some analysts following the builder stocks are watching cancellation rates for signs of life in the housing market. Since the market peaked in the summer of 2005, many new-home buyers have backed out of contracts and in some cases forfeited down payments.
These customers are nervous about buying a house that may soon lose value in a shaky market, and are also having difficulty selling their existing homes. The end result has been surging inventories of homes.
…
Toll said it will take another four or five months to burn off the excess inventory in most regions, and longer for harder-hit markets. Many of the toughest markets now are those that vaulted highest during the boom years as a result of investors “flipping” homes for a profit. Historically low mortgage rates added to the froth.“There’s the most speculation right before the market cracks,” Toll said. Although the shakeout has driven many flippers from the market, “it’s remarkable we still have speculative investment in the market even today.”
…
Centex’s Eller agreed that the past few years have seen “an unprecedented level of speculative investing in housing,” which is visible in the number of vacant homes on the market, both new and existing, which he estimated at about 1 million during the current correction.With all the excess liquidity in the housing market and the amount of house-flipping, “the consequence was considerable excess.” He estimated the housing market could be in the middle phases of a three-year correction.
From Bloomberg:
D.R. Horton Says Housing Market to Remain in Slump
D.R. Horton Inc., the second-largest U.S. homebuilder by revenue, said the housing market will remain in a slump and the company will close on fewer homes in 2007 than last year.
“I don’t want to be too sophisticated here, but 2007 is going to suck, all 12 months of the calendar year,” D.R. Horton Chief Executive Officer Donald Tomnitz said at a Citigroup Inc. conference in New York. “Our future is not as bright as what we would like it to be.”
Tomnitz’s comments pushed homebuilder stocks lower and provided more bad news to a market shaken by a rise in subprime mortgage defaults, fears of recession or waning economic growth. A yearlong U.S. housing decline has left builders with a glut of unsold homes as customers have abandoned deals or held off making purchases. Sales in 2006 fell 17 percent, the most since 1990.
grim – ya beat me to it – to quote Borat “high-five”
2007 – housing rebound…
NOT!!!!
JM
I am still trying to figure out NJ.
What is an unincorporated community?
It looks like Belle Meade is unincorporated and it’s part of Hillsborough which is incorporated(?).
Any comments on Belle Meade/Hillsborough are appreciated!
Thanks
RentL0rd, NJ has quite a few of those. Iselin and Woodbridge, for example. Not sure what it means though. Iselin doesn’t have a PD, they use Woodbridge cops.
Greenspan should talk to the builders…
Greenspan says carry trade has limited room to run
Revisiting the issue, Greenspan said the U.S. economy was in the midst of an inventory correction, and said gluts in both the housing and manufacturing sectors needed to be unwound.
If home sales and housing starts continue at their current pace, he told the conference, “it will be a long haul to get rid of this stuff.” But for home sales, Greenspan believed a bottom had already been reached.
Emphasis added
Rich
Thanks sync.
Belle Meade is a part of the township (some of it is also in Montgomery). Unincorporated just means there’s no chartered gov’t.
Hillsborough is a good area. Commuting North via 206 is the biggest minus…traffic is awful. If you’re headed in any other direction, it’s much better.
Schools have a good rep…not great. Hillsborough HS is very large. Needless to say, I’m being very general here. Many people who can afford a higher $$$ housing outlay go into Montgomery. You get a ‘top 10″-type school and a Princeton mailing address in many locations.
Rentlord-
Also, if you think Republican politics can’t be sleazy and corrupt, Hillsborough should provide you hours of entertainment.
clot(7),
Trying to go east towards 287 is also painful especially if you are driving towards 287 in the morning.
Fremont General Corporation Consents to Cease and Desist Order
http://biz.yahoo.com/prnews/070307/law105.html?.v=62
** Off topic ***
I need help. Does anyone know how or if it is possible to have excell or another program number something automaticlly?? I am trying to make labels with a series of numbers say 100-500 I don’t want to do it by hand.
Thanks
KL
using =ROW() in a cell translates to row number. Is that good enough?
I’m not an excel expert. There may be better ways to number cells.
KL, put a number, say 100 into a cell.
Then daintly hold the bottom right and pull down vertically… the numbers are auto populated sequentially.
It does this to date formats as well. ie., 3/1 comes after 2/28.
… unless I totally misunderstood your question ;-)
#8, clot-
Also, if you think Republican politics can’t be sleazy and corrupt
Quite the opposite actually.
Like I blew my political inclination in the other thread – I lean left.
http://en.wikipedia.org/wiki/Left_wing
rhymingrealtor,
if dragging doesn’t work, type in your starting number anywhere. and then right below that cell, type in ‘=1+’ and then reference above cell. then drag it down or copy&paste the cell formula down.
Dave
I guess we can listen to the bulls on this site or listen to Don Tomnitz. I’m sure he turned a few analysts heads today. It seems like he does not see the light at the end of the tunnel. What, no more dancing shoes??
The rampant, irrational speculation fueled by free money, fraud, deception and abuse resulted in the biggest bubble this market has ever experienced. Unfortunately, the corresponding reaction takes, [what seems like forever to some] an inordinate period of time. Hell, Toll even states that there is still speculative investment apparent. No kidding. How can we be close to the bottom while speculation still exists?? Prepare yourself for several years of slowly declining prices. From peak to trough it will be substantial. Just listen to Don Homnitz.
Thanks BC Bob.
Bob,
I see that Yen hit an all time high in 2006 July (110). Do you think we still have a long way to go before we hit that number? Even if Yen hits 110, what’s different this time?
Is there some fracture point in yen’s value beyond which carry trade cannot be repaired?
http://quotes.ino.com/chart/?s=FOREX_USDJPY&v=dmax
Thanks in advance.
Thanks Clot.
I don’t understand the whole “princeton mailing address” hype though. Some of Franklin Twp, with one of the worst schools in NJ, comes with a princeton tag as well. Who cares?!
I used a realtor to seek my current rental townhome, and the a55h013 never told me about the quality of Franklin twp schools – he knew pretty well that my kid would be going to elementary soon.
bear,
It’s very hard to answer since there are a ton of different variables. 114 is a solid support #, if it breaks there, I think there will be a additional volatility in the markets. Don’t just look at the yen and certain support levels. I feel what is more important is the other side of the trade. What if a falling yen is financing a highly levered losing position??
Almost ready to move to the new site, I just need to pry my domain name from Yahoo’s cold, dead hands. (I really shouldn’t have registered it there anyway.)
jb
#3 RentLord – my co-worker lives in Belle Mead in a georgeous house. The schools are excellent – Montgomery was rated #4 in NJ. Houses in that area are more affordable than northern NJ.
Rentlord
I started your way, but it gave me the same number in each, then I highlighted 100 cells started the first one at 100 then edit> I had an option to fill series and it asked by how many I said one. I did it again for 4 more columns of 100 I now have it numbered,but now I have to turn it into labels.
Thanks for the Help
KL
rhymingrealtor,
Rentlord left out one part…After you click on the box in the bottom right hand corner of the cell, you must hold down “CTRL” while pulling down vertically…if you hold down CTRL, the numbers add (i.e. 1,2,3) if you dont hold CTRL, you just get the same number repeated over & over (i.e. 1,1,1)
WSJ – Ahead of the Tape – excerpted
Home-Builder Shares Look Less Bargain-Basement
By any number of measures, home-builder shares are cheap. That doesn’t make them a buy.
Price-to-book-value ratios, for instance, suggest builders are a steal. (Price-to-earnings ratios don’t work because many builders aren’t producing earnings in the housing downturn.)
Book value is a measure of the value of a company’s assets (buildings, land, equipment) minus its liabilities (debt, payables). When price-to-book is low, it means the market attaches a low price tag to net assets.
On average, the top-five home builders trade at 1.2 times book, according to Morningstar. That’s much lower than the ratio of 3.1 times for all S&P 500 companies.
The problem is home-builder book values have been falling, and if they keep doing so these price-to-book ratios could rise.
Like banks writing off bad loans, home builders have been lowering their estimates of what their land is worth. That reduces their book value. KB Home, Lennar and Centex recorded big one-time expenses, known as charges, in late 2006 to adjust the value of their land holdings.
Hovnanian Enterprises, which reports quarterly earnings today, has been doing the same. Hovnanian said last week that it would take a $90 million charge for a Florida property. The company also took $336 million in land-valuation charges last year.
Chief Executive Ara Hovnanian said the land charges could stop if housing stabilizes, but acknowledged the company is exposed to more charges if housing worsens.
In short, home-builder stocks might not be as cheap as they seem.
Thanks Renting
I know I got the same number thats why I tried the other way and it worked.. but oh how I hate to be a pest – I am trying to turn it into labels, no luck as of yet please if anyone knows, please help.
Thanks again.
KL
PS- followed the help in excell step by step but word turned my numbers into gibberish.
Off to bed.
I’ll worry about tommorow.
Thanks
KL
RentLord: I was born and raised in Hillsborough. Basically, what clotpoll said upthread is true — nice town, 206 is a nightmare (though I presume that it has gotten a LOT better since it’s been widened lately), good school system (a high school friend is one of the vice principals, so I may be a little biased). Montgomery is also very nice, though more expensive and (dare I say it) a little snootier than Hillsborough. Still, it was a good place to grow up, your money will get buy more (and much nicer) real estate than you will in North Jersey (though the area’s property is still overpriced IMHO and not as cheap as South Jersey), and I intend to move back some day (when I have a family of my own — no WAY they’re going to Hoboken or Jersey City public schools).
Also — a shout-out to ChiFi, HEHEHE, JerseyGirl, and any other Hoboken/Jersey City residents — has anyone else noticed that the Toll Bros. office on Washington Street (across from City Hall) is being closed? Apparently, you have to go directly to one of the Toll Bros. condo projects if you are interested in any of their property now, instead of the office. (So says the sign in the window.) Any inside info re this?
Please ignore if this has been discussed already.
RentL (20)-
You’ll care about that Princeton mailing address when it comes time to sell. It’s $$$ in the bank.
KL
After you drag your series, right click cover the series. Left click, select Format Cells, then on the drop down under the first tab, “Number”, select the “Text” category.