Adam Axler

Real Estate and Financials: Sell the Rally

Not a fan of TA, but think the argument is correct. Homebuilders have had a huge run on unfounded optimism, unless you include Bill Miller's call, who has been getting pounded for 2 years now and is trying to cover himself. RealtTrac estimates that 40% of homes on the market will soon be bank owned. How can a homebuilder sell against that environment? I think we'll also continue to see writedowns of impaired land. Look at Centex's recent sale at $.18/dollar of initial purchase and 1/3 the value listed on their books.