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Lennar Corporation Message Board

  • leiyongjun leiyongjun Feb 12, 2004 12:55 PM Flag

    LEN, Housing price

    LEN is a good company. But how long the interest can keep this low is a question. Some people may think the housing price will go up forever. Please keep in mind, in this low interest rate, any jump for the rate will have a big negative effect for the stocks like LEN. The interest rate won't go lower. Holding this stock for long does not make sense at all.

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    • i bought at $18 (before the split) just after rates started falling in the mid 90s. why is that so hard for you to believe?

      i'm short via 2006 puts now.

    • these are people who should never have been given a mortgage in the first place.

    • b billy bosco,

      You can turn a tall tail with the best of them. Prices have not declined 40-50% in London or anywhere in England. Actually it cost a lot more to buy a home in England and in Europe than it does in the USA when compared to their wages.

      There was 1 economist in London who was predicting that real estate could fall 40-45%. However he was the only economist that would make that prediction. The other economist's were much more upbeat about the real estate market. You turned a recent article about a economist warning of big real estate declines and actually stating in your post that some areas have seen price declines of 40-50%.

      Like I said earlier, you can turn a tall tail with the best of them.

    • Er, quite the opposite.

      Just a few months ago the optimism of RE in London suggests that prices will never decline. Prices have declined 40-50% since, in some areas not all, but the mood has definitely changed. Furthermore, the rate of foreclosures on a national level has been increasing, not to any panic level, but increasing none-the-less ( Lastly, Al Green stated today that FNM and FRE should curtail their mortgage purchase. Fannie Mae Chief Executive Franklin Raines told lawmakers on Wednesday that limiting mortgage purchases by his company -- as Federal Reserve Chairman Alan Greenspan has proposed -- would raise mortgage rates and create new risks for the U.S. financial system.

      PPI still not released....

      Desperate, not by any means, the post was honest and accurate

    • Investor, I agree with your comments but I think you are talking to a brick wall with Bosco. He is the same one who makes a post stating homes decline 50% in value and includes a link. Obviously, trying to insinuate that is occurring. A look at the link shows that it is an article from London.

      That shows me the guy is desperate and cant even make an honest post.

    • Perhaps you didn't see this article,

      PHILADELPHIA - Because a record number of homeowners cannot pay their mortgages, City Council, the sheriff and several advocacy groups are trying to convince a judge to suspend the city's foreclosure auctions, which this week saw a record 1,120 homes up for bid.

      "This is the worst time for foreclosures basically since the Great Depression," said John Dodds, director of the Philadelphia Unemployment Project, the group leading the moratorium drive. "Something has to be done. You can't keep letting hundreds and hundreds of people lose their home every week."

      The national rate of homes in foreclosure peaked at a record high of 1.2 percent of all mortgages in the first quarter of 2003. Experts say it takes between six months and a year for foreclosed homes to make it to auction, meaning a record number may now be on the block, though no one tracks that number.

    • Agreed. I amlonger than hell in a bunch and need to liquidate to set up the shorts. When rates go up, housing will implode. In California there are a huge amount of ARMS that will double mortgage payments when rates rise, thus foreclosure city will begin.

    • amzn used to be; i caught it near its $60 top. Now I'd have say the homebuilders are the best shorts imho; they have no place to go but down, but leaps are the best way to go; these things take time.

      i think most techs are wildly overvalued (Dell at $80 billion, CSCO at $160 billion) but you have to fight the tech kool-aid-drinkers to get these things down.

      Higher interest rates mean LEN (and TOL, for that matter) will spiral much, much lower, because home building will stop, period.

    • thanks - I will join you. Places like OC are so over bought, they will see a disaster much worse then the early 90's brought them.

      Is LEN your favorite short?

    • I bought jan 2006 $40 puts for $5.20 per contract. (Each $520 you spend controls 100 shares of LEN).

      I don't think there is a chance in hell that LEN will be above $40 later this year, much less next year. Investors forget how low this one can go when rates start rising, because new home construction will basically stop.

      I see the stock around $20 in 12 months, which would give me at least a 500 percent profit. It's a low risk way to play the housing bubble, because your losses are known and fixed.

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