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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: orkrious who wrote (156019)3/17/2002 9:49:13 AM
From: flint  Read Replies (2) of 436258
 
There is another thread for Real Estate crash. 4 months ago I stated home builders will survive just fine. It's the home owners and the lenders that will get sacked. I was right.

The builders are mobile. 90% of the population is still doing good. A mass migration to a retirement life styles will start to pick-up.

I agree if you're a thrift company that sold mortages in Boulder CO, Raliegh NC, Silicon Valley CA, New York NY your default rate will kill you. If your a home builder in these areas you simply build homes in Florida, Arizona, Maryland, or any other state fairing well instead. What do you care if the people you sold to 10 years ago default to their banks?

FWW home builders earnings can be cut in half and they
would still be way out ahead of the S&P. In my opinion the confusion between housing market failures in specific locations vs home builders ability to generate capital is holding these stock down. Second, home builders generally do not build the large 40 acre tracs unless the specific market is booming. If it is not, they simply do not spend the money - nearly everything is sub out to contractors. The over head of a dormiant or near dormiant office is next to nothing.

Flint
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