All GLG News Analyses Filed Under: Homebuilding
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
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David KellerFormer Chief Financial OfficerTechnical Olympic USA Inc.
ARE HOMEBUILDING STOCK PRICE INCREASES PREMATURE?
April 24, 2008
Construction Companies Are Clamoring for Managers | online.wsj.com
Recently, stock prices of most public homebuilders have increased 20-30 percent. This despite no visible signs of improvement in the overall housing industry. It seems early in the cycle for these stock price upward movements, as it appears the housing market has not yet found bottom. Equity buyers at the present stock prices must be patient and have a mid- to long-term perspective on their investments. There may be several reasons for the recent price appreciation including: 1. Short sellers covering positions as hedge funds encounter increasing risks in other parts of their portfolios or simply decide to concentrate their efforts in another sector. 2. A perception the government enacted or proposed initiatives will cause significant improvement in homebuilding activities, including sales and financing of homes. 3. A belief the housing downturn is at or nearing bottom and this is the appropriate time to purchase homebuilder stocks.
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David KellerFormer Chief Financial OfficerTechnical Olympic USA Inc.
IMPAIRMENT REVERSALS – IMPACT ON COST OF GOODS SOLD
April 24, 2008
New-Homes Supply Builds; Durable Goods Orders Slide | online.wsj.com
Homebuilders have recorded large inventory impairments over the last couple of years. Most of these impairments have been for land and lots. As these previously impaired lots are built on and a completed home is delivered, the land component as a percentage of Cost of Goods Sold may decline significantly.
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Steve BottfeldPrincipalMarketing Solutions
April 22, 2008
Study: Few can afford homes in LV | www.lvrj.com
March Las Vegas housing results can best be described as mildly disappointing. Although prices remained relatively stable and inventory continued decline, surprisingly, sales did not improve significantly. Although sales did not increase in March, there is sufficient anecdotal evidence (increasing traffic, multiple offers on specific properties) to suggest they will increase strongly over the next two quarters. undefined undefined
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Jim BelfiorePresidentBelfiore Real Estate Consulting
Northeast Phoenix Woes: No Market for Desert Ridge?
April 10, 2008
Developers seek relief in state land deals | www.azcentral.com
The limited demand within Northeast Phoenix should come as no surprise to the State. The deceleration in home sales has created a surplus of finished and planned lots. Despite current market conditions, BREC anticipates the market area continuing to hold value better than most Valley submarkets this year. Land and lot demand, though, should trail a pickup in sales- which isn’t expected until sometime next year.
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Jon WatsonPrincipalJon Watson Consulting
March 28, 2008
Where are the first time buyers? Day of reckoning for the housing market | www.guardian.co.uk
First time buyer activity is the traditional prop for the market: despite continued high levels of household formation (225k per annum, compared with build rates of 160-180k per annum), increasing numbers of newly forming households are choosing to rent rather than buy. In parallel, buy to let activity, the boom industry over the last five years, has evaporated as a result of the credit crunch. Where are the buyers to allow people to trade up from entry level properties?
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Steve BottfeldPrincipalMarketing Solutions
March 18, 2008
New Home Sales Inch Up | www.lvrj.com
In sports, March Madness starts with the opening “tip off.” In Las Vegas real estate, March Madness starts with February’s housing stats. And, those stats are the “tip off” that this market is making progress in its struggle to get off the “bottom.”
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Beyond the Housing Slump - Taking Control of Your Construction Material Costs
March 7, 2008
Beyond the Housing Slump - Taking Control of Your Construction Material Costs | www.design2bid.com
During this housing downturn, builders should be focusing on defining and implementing the operational processes that will make them more efficient builders when the market begins to recover. In the past, home builders have relied on their trade base to provide them with the material quantities required to build their homes. Current trends are forcing builders to take control of their quantities... ultimately, their material costs. After conditions begin to rebound, will builders be able to maintain control, of both their material quantities and costs?
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Jim BelfiorePresidentBelfiore Real Estate Consulting
Bernanke Call too Early, Needs to Focus on Homebuilders
March 6, 2008
Bernanke's Call: Aid Homeowners | online.wsj.com
Some homeowners with the means to pay their mortgage payments are halting those payments, walking away from their homes instead, accepting that they are upside down, and choosing 7 years of bad credit over an unknown period of negative equity. If Mr. Bernanke is successful in his call to bankers- that is, lower the mortgage debt for those homeowners whose homes are worth less than their outstanding mortgage balance and “struggling” to make payments- fewer owners will likely walk from their homes in 2008. Our question to Mr. Bernanke is: what about next year? Prices are still dropping rapidly.
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David KellerFormer Chief Financial OfficerTechnical Olympic USA Inc.
March 3, 2008
Decline in Home Prices Accelerates | online.wsj.com
There are risks associated with homebuilding assets and contingent obligations. This article alerts the reader to areas of interest.
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David KellerFormer Chief Financial OfficerTechnical Olympic USA Inc.
March 3, 2008
Decline in Home Prices Accelerates | online.wsj.com
Homebuilding impairments and tax valuation reserves provide future accelerated income streams, when the recovery occurs.
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