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TRI Pointe Group, Inc. Message Board

  • abcs.learning abcs.learning Jul 8, 2013 5:26 PM Flag

    This is getting really depressing

    Every rally sold off; every spike in price answered with more selling. Not a builder I know is down less than 25% in the last 6 weeks amidst this relentless selling. You'd think it was 2006 and the "beginning of the end" had arrived. The powerful ramp in CA fundamentals thus far means nothing. Expansion phases in the CA real estate cycle usually last for 6 to 8 years, and we are only into this 1.5 years, so maybe one day someday the cycle will mean something.

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    • If TPH's predictions for revenue is accurate, then the estimates for the share price are accurate to conservative. Manipulators move an individual stock price week to week. Fundamentals move the price month to month. You are obviously trying to help move it further down over the short term. I wish you well.
      I do not care. Until something fundamentally changes, I know this is a great stock to own.

      • 1 Reply to abusaid22220
      • I'm not short the stock; so no motivation for me to bring it down. Total borrowing costs to buy a home on an interest-only basis have risen a stratospheric 28% in just 6 weeks; and for a 30 year-fixed it's even more, 33% over the life of the loan. That 28% is reflected in the 28% drop in the share prices of almost all the builders. It's been a long time since I can remember the "actual" cost of buying a new home rising 28% in just 6 weeks. And that's on top of the 15%+ rise in home values in the last year. If rates rise to 5.5% (or even 6% as Goldmans is suggesting). that's a 56% increase on an interest-only products and almost +70% increase on a 30 year-fixed. That KILLS the housing recovery for a lot of buyers. They become priced out of the market.

        Today, there is very little inventory - so that's probably okay for the builders (for awhile) - but soon demand will just dry up when people realize that they must be content with renting. Something has to give - the banks will have to extend more generous credit terms or there will be BOTH a shortage of buyers, AND a shortage of housing, and home sales will drop, even though the ASPs will continue to rise. This is a serious situation.

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