User 337426

Is KB Homes' Outlook Realistic?

KB Home does not sacrifice quality in their homes for price, they're just building a bit differently to reduce overall cost. For example, using pre engineered framing reduces labor and material cost and it's a better building practice.

KB will be building some smaller floorplans and at a lower cost, again NOT less quality.

For those who believe they can find a resell home at a greater quality than a new construction home(in a comparable price range), think again!

The four year supply is of KB's LOTS not homes. KB Home is a Built to Order company, they do have some inventory on the ground, yet a fraction of what other 'spec' builders have.




On Jan 13 02:48 PM Bob Lunn wrote:

> KB Homes' seem to think building less expensive houses is the way
> out of their predicament. However, if I was in the market for a new
> home, I would l compare their new, cheaper to build homes with the
> large number of two to three year old homes that were built to higher
> quality standards and are currently being sold at fire sale prices.
> Many of these barely used older homes are likely to be less expensive,
> include many upgrades, and be built to higher standards in better
> locations.
>
> I don't see any positives for this stock, or other home builders
> stocks until the existing inventory of available homes is substantially
> reduced. Add on to that their statement that they currently have
> a four year inventory of unsold homes aging in a process known as
> lot rot, and things don't look very good. The stock is approaching
> its price back in the early 90s. The next thing I expect to happen
> is for them to cut their dividend.
>
> I agree with the analysts scepticism on KB Homes' outlook. The only
> question I see is should current stock holders bale out now or chance
> riding it into the ground?