Marketwatch reports homebuilder D.R. Horton's net sales orders for its fiscal third quarter ended June 30 dropped to 8,559 homes valued at $2 billion, compared with 14,316 homes or $3.8 billion in the year-ago period.And as Peripheral Visionary so astuely observes the article confirms; "Home builders have been taking land-related impairment charges during the housing slump."
Home Depot has also lowered full year guidance. So much for builders and associated retail merely shifting market focus to weather any downturn.
17 comments:
FIRST
First!
Darn!!!
Curst!Murst!
SoCal market must be fine . . . paid $120,000 now on sale for $165,000,000:
Jul 10, 3:12 AM EDT
BEVERLY HILLS, Calif. (AP) -- A mansion that once belonged to publishing magnate William Randolph Hearst was put on the market Monday for $165 million.
The seller, attorney-investor Leonard M. Ross, bought the Beverly Hills property in 1976 and is seeking a "lifestyle change," said his real-estate broker, Stephen Shapiro.
It is believed to be the nation's most expensive residential listing. The asking price surpassed the $155 million being sought by developers of a 10-bedroom estate in Montana's Big Sky country, and the $135 million price of an Aspen, Colo., compound owned by Saudi Prince Bandar bin Sultan, former ambassador to the United States.
Hearst bought the mansion in 1947 for about $120,000. The 1920s-era, pink stucco estate is shaped like the letter H and is spread across 6.5 acres north of Sunset Boulevard.
It boasts three pools, 29 bedrooms, a movie theater, a disco and separate residence for the security staff.
Hearst hosted frequent parties for the famous and powerful there. John F. Kennedy and his bride, Jacqueline, spent part of their honeymoon at the estate in 1953. The pair later returned when the mansion was used as the West Coast campaign headquarters for Kennedy's presidential campaign.
The estate was also featured in the film "The Godfather."
The home I'm remodeling in Birmingham is a DR Horton home. They do a pretty decent job with their cookie-cutter approach. However, I think the issue is right across the Interstate from me. In the area I own, there are around 1000 or so houses DR Horton built. They ranged in size, type, features and so on. They also were spread out over a large area.
Across the interstate, DR Horton is building similar houses, but the houses are within feet of each other. My wife and I prospected them, but didn't like the idea of teens running from room to room, NY-style.
The quality is worse and there will be about 150 total houses. Of course it will be nice to drive straight in to Target which is about 250 yds from the entrance. They just got caught being greedy and trying to squeeze a little more profit out of the area they had already built in.
Any news on the court procedings with Mark / Gaysey?
Please use today's casey thread. No news as the courts don't open until at least 10 AM PST.
CNBC is running a few pieces today on Horton, Home Depot (up in trading!) and the housing bubble. Apparently D.R. Horton's business model includes 40% of inprocess construction as spec. OMG, talk about burn rate and carrying costs. Another CNBC newsie pointed out two emerging trends that may explain continued construction employment. Apparently Hovnian says he can't move land at any price so he's forced to plop down a house on his surplus raw lots before he can even hope to dump them at a loss. The other is a Mexican standoff. The HBs are no more transparent to each other as they are to us. There is a "who blinks first" game going on so every one of the big HBs is putting on a public face of strength.
Well DR also run their own mortgages so I'm interested if they have any internal subprime issues going on as well. That is, of course, if they didn't offload them to some other sucker.
That would explain the houses being shoved together. They probably intended on buying out the massive pieces of land that target and friends picked up but couldn't compete.
It was surreal, all the former homeowners were given "bigjuicychecks" and were driving off with big dual-ie trucks and u-hauls. About 12 houses (brick and mixed) where just sitting there waiting to be knocked down. I wish I had some spare land and some house-movers and I could have made a few bucks.
Is Horton in every US state?
Wow, 40% spec? O.O Yikes, that's a lot of spec homes . . . there's a spec home down the street from me, sitting, sitting, sitting. It's got a lot of competition; several new homes going up nearby, probably also mostly specs. It's going to get interesting when the homebuilders start trying to figure out how they're going to make bond payments . . . the flipper-floppers aren't the only ones who are leveraged.
Interesting that they're continuing to build in part because they can't dump the land. Sounds like they're assuming that the hit on a priced-to-move house would be less than the carrying costs on empty land--we'll see if that turns out to be the case.
Moody's and S&P are laying bombshells on the industry.
Calculated Risk has excellent coverage of it.
YES!!!!!!
*off topic but fliptard's life of debt just got a lot harder to get out of*
Yes we knew it but you have to ask the bigger questions. 399 downgrades and this happened on a Tuesday? No, they sat on hundreds of downgrades for months or longer. Malfeasance for a ratings agency. If those bastards had downgraded when they should have the balance of power in the futures/options arena would have shifted long ago. People lost fortunes, and ummm people to whom Moody's are beholden made fortunes. It stinks.
Now that the HBs are backing out of their raw land purchase options expect a nasty dominoe effect similar to the farm crisis of the mid 1980s. There's going to be a lot of heirs exposed as having pre-spent their windfall.
Since I'm short LEN and just recently DSL I'm not complaining.
Most people who have been following housing blogs KNEW the rating agencies were screwing the pooch.
It then became a matter of placing money on the knowledge and hoping it would unwind appropriately. When Bear Stearns almost melted down I decided to place the DSL short.
Yes, what the rating agencies have done during this fiasco has been WRONG....but I can't control that, I can only attempt to take advantage of it.
Anyone here follow the SRS ETF fund?
Its a short against REIT, home builders and lenders. All kind of combined into one giant "bet against real estate" omelet.
Not sure how viable it is. I have individual PUTs against various entities. But this might not be a bad way to spread the load.
http://finance.yahoo.com/q?s=srs
Just an FYI on my part. No glowing endorsement. (I don't even own any; yet)
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