I have no doubt that RYL will continue to decline. The tight labor market has not only inflated wages in skilled positions, homebuilders in general are subcontracting companies who are understaffed and have limited skills. I feel that this practice is about to "snowball", resulting in either refunds/reimbursements, etc. to buyers or in my case, as a current Ryland homeowner, litigation. The neighborhood I live in has 5 builders, there are many unhappy homeowners with each of the builders. This issue is not exclusive to Ryland, it's indicative of the homebuilding industry. I'm selling all construction related stocks.
. . . should cause concern but that does not mean that the stock will necessarily go down. We cannot just disregard the question of valuation. With RYL still at a PE of less than 4, the market is clearly discounting a horrific downturn. Hence, even if we have a downturn which is only moderate the stock can still reasonably be expected to go up not down.