mwatch

Are Homebuilders Ready for Another Drop?

The article make great point of how hoe builders are swiming against increasingly bigger tide. I want to add to what the financial part of the series of problem these builders have to deal with. On the supply side, the market is sitting on a huge unsold inventory, and with the next wave of foreclosure this unsold inventory will get even bigger, additionally, with what just happen the financial industry this past weekend, buyers will have second thought before they make any commitment. The question now is how and when the builders can return to profitability. Should we start using something like 5 year-forward PE forecast instead of one year?