As long as RYL have enough liquid capital, RYL will do very well....construction cost is down, interest rate is down....best time to build....RYL must be selective and focus in good location and areas with much potential growth....RYL a leading builder will stand to profit the most when housing trend improves. At $16 range accumulate big time ....at $17 range still a great buy.....
RYL will crash and burn, here is why: Inventory of existing houses will soar next year when a glut of ARMs will reset, while interest rates rise. Desperate banks will dump these at prices far below replacement cost.
Unemployment is still growing and unemployed people don't buy houses. Many people are uncertain of their jobs, nervous employees don't buy expensive new houses when they can get cheap short sales or foreclosures.
Mortgages will be increasingly difficult to get as more lenders go tits up.
It's not interest resets that will be causing more foreclosures and oversupply. It's "recasts". Many option ARMs were issued at the peak that were negative amortization - that is the principal grew for a few years and then payments ballooned, the homeowner making a bet he could refinance if necessary and the issuer betting that the home value would go up 10 to 15% a year. Also, many large home equity loans were issued as interest only and the principal is about to be added in. There is no stopping foreclosures on these resets - it's the principal not the interest.
There are some very good and detailed educational sources on this - see calculatedriskblog and Mike Shedlock's global economic trend analysis blog. These guys go into detail with a bunch of graph porn.
What has changed is that in this economy, cash is King..... big part of construction cost is the land which has substantially dropped in price....also...most material and labor vendors is willing to negotiate in price....if enough equity, builders can access capital at very low interest rates...Based on current pricing, RYL is too much oversold and ready for a bounce ($2-$3)....if any good housing data comes out...RYL should bounce back into the $20 range....at current price...its a good buy.....
you seem like smart guy. i like people like you. you want to join the ryl party and ride this up to $500 a share with me? i think short people scared of ryl cause they know ryl a monster ready to roar. ryl be good to me and my family. me like this stock.