"Our members are realigning their expectations somewhat until they see more actual signed sales...

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wyostocks Comments (5348)
 
What took them so long to get the message?
This should be good for plus 10% for the stocks though.
16 Apr 2012, 10:13 AM Reply Like

Conventional Wisdumb Comments (1802)
 
I guess confusing warm weather with buyer interest might have raised expectations beyond the real underlying demand.

Houses are so cheap right now, which is a good thing, that I wonder how these homebuilders can compete in the long run.

I don't follow the sector but I imagine they must have really downsized to survive.
16 Apr 2012, 10:26 AM Reply Like

schatzl Comments (391)
 
They can only compete once the existing stock has been absorbed or demolished. There seem to be exceptions in the higher income markets though.
16 Apr 2012, 11:26 AM Reply Like

kwm3 Comments (2043)
 
cheap? where? most of the houses i've seen are way out of whack (still) with area incomes.... until they come in line with income, and the excess supply is absorbed, including foreclosures to come--then they remain overpriced. the market also has future strong headwinds of boomers selling and moving into communities or downsizing. the sector will be very stressed for a long time.
16 Apr 2012, 12:01 PM Reply Like

Richard Ian Carpenter Comments (23)
 
I have to repeat the questions of kwm3: Cheap? Where?

My wife and I live about 55 miles from Washington, DC (in Virginia), and home builders/developers are still asking for prices that are near their pre-bubble amounts. Prices have come down a little -- $20k to $50k -- but that's from prices in the mid-$400k region and higher.

They (home builders/developers) are sitting on their stock of houses, some of which are more than three years old, in the hopes of getting that pre-bubble price. That is quite a gamble.
16 Apr 2012, 12:46 PM Reply Like

Conventional Wisdumb Comments (1802)
 
Richard,

Considering you live in the bubble world of DC, I am not surprised. I think that the fact that the economy is so strong due to all the lobbyists and government employees is a metaphor for what is ailing the country.

Here in FL, houses cost a lot less than they did in 2002 so I would say that it is cheap based upon recent prices - down 60% from the 2007 high. A new housing development in my area once featured homes in the "mid $600's", those same homes which did not sell the first time are now being featured as the "low $300's".

AZ, CA, NV and a lot of other places are pretty cheap compared to their highs so I am not sure if we are using the same definition of "cheap" but that's what Case-Shiller is showing.

Houses still might be expensive rather than grotesquely overpriced but I don't have an opinion on that.
16 Apr 2012, 01:04 PM Reply Like

kwm3 Comments (2043)
 
exactly, the builders and buyers need to recognize that the bubble was an aberration, an anomaly, and was not an efficient and orderly market, but a tulip-bulb reminiscent insanity. high prices turned out to be disastrous for the economy and buyers of that era of mania. you knew it was happening when the elevator chatter was about some obnoxious price paid for a home somewhere.
16 Apr 2012, 02:13 PM Reply Like

WallStreetDebunker Comments (1195)
 
Media pundits have been regularly saying that homes are more affordable than ever. Somebody needs to explain to the pundits that affordability is defined not only by home price and mortgage rates, but also by the ability to qualify for a mortgage.

Don't wait for the National Association of Realtors to create a "Qualified Potential Homebuyer" index, as it would seriously jeopardize their constant "Now's a Great Time To Buy" sales pitch.
16 Apr 2012, 03:27 PM Reply Like

Richard Ian Carpenter Comments (23)
 
@ CW: I agree that the DC Metro area is its own world, but I'm sufficiently far enough away that most of the power brokers and government employees won't live here. I work in DC, my coworkers can't understand why I choose to commute 2 hours one way to get to work. (I work roughly 9 hours per day and commute another 4 hours.)

@ kwm3: That's what happens when capital is misallocated, especially with regulatory blessing with the promise of financial assistance.
16 Apr 2012, 02:55 PM Reply Like

WallStreetDebunker Comments (1195)
 
It's surprising that some warm winter weather got a bunch of people to window shop some new homes that many are not qualified to buy. It really shows how bleak the personal balance sheet is for so many people.

What's less surprising is that the homebuilders were touting the lookyloo traffic in the warm months as evidence that a housing market turnaround is in site. These desperate homebuilder execs grasp at every straw that blows in front of their money-losing sales offices.
16 Apr 2012, 03:47 PM Reply Like