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Strategies & Market Trends : Joe Stocks Trader Talk

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To: Joe Stocks who started this subject	4/11/2002 10:33:58 AM
From: Joe Stocks	of 787

MDC- Homebuilders- MDC reported this am. On the surface the numbers look good but I think in reading the financials that weakness is appearing. Backlog was down 8% from last year. Homes closed was down 5%. New orders which at times get canceled was up 4%. What seemed to have driven the positive earnings was that average home prices were up 14%. If average prices start to deflate we could see earnings adversely affected. Inventory was up 7.6% or $75 million. This does make it a trade because the street tends to trade off the headlines but something to keep an eye-on. Homebuilders quite not ready but I got to believe they are getting close. Average sale price was $266,000 versus $233,000. I don't see how folks can afford homes that expensive although my daughter just bought one. People seem to be more comfortable having a bigger chunk of their income going to housing than I was ever use to. JMO. Joe

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