Oh Boy you are short KBH and CTX yet spend your time talking down DHI .
Please , please ,please short the rest of the home builders also so the inevitable rally will squeeze you like a tube of Colgate.
No doubt the HB's may have further to fall but just bear in mind that if the average house price in the USA is as widely reported 220K$ approx. that make it less tha 50 % of what it is in places like the UK , Ireland or most of western Europe , so I believe there is HUGE upside in most of the HB's once the mortgages mess is resolved and normality returns to the US market . The problem was not the cost of the homes it was the packaging of the CDO etc that caused tghi mess . IMHO
It seems to me that many people are not taking into consideration that this problem is mainly confined to a small portion of the population that were hoodwinked by slick mortgage salespeople , plus no doubt many speculators have just walked away from flipper condos in Florida and California to make the problem look even worse . Correct me if I am wrong but I believe I saw a chart on CNBC the other day that showed the default rate on subprime mortgages was similar to the present rate back in 2002 , but because of the lack of a CDO factor it never made the front page .
You guys seem to think the Housebuilding in the USA is dead , but the last time I was there ( I am writting this from a beachfront condo in Spain ) I noticed that most of the houses were made from Wood or similar materials that do not last hundreds of years .
I agree with those who can see past the nose on there face and are nibbling these fine corporations with an eye on future riches .
Remember USA houses are one of the few things not now made in China , they will ALWAYS be made in the good ole USA ,lots of them , and very profitably too, once this Wall St inspired mess is cleared up.
Over 30 years in the real estate business. Do yourself a favor. Pick a typical homebuilder project and find out the lowest price home for sale. Check your newspaper to determine the average rent for the project. You will find the home as an ivestment will give a negative cash flow. When you are able to purchase a unit where the total expense ie cost of downpayment, mortgage, ins. taxes, and management fees are equal to the gross rent, you are in positive cash flow after income taxes and have a good investment. Rent vs purchase is determined the same way. This method of evaluating real estate is conservative but works well. Other methods take appreciating into consideration. Cash flow, and projected cash flow is best.