Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (12796)	10/4/2004 6:55:44 PM
From: yard_man	Read Replies (2) of 116555

PHM call -- I'm getting offline now ... >>Listening to latter part of the call -- the bubble has busted in Las Vegas. Lots of good questions ... problem is cancellations. Inventory tripled from Jan in the area ... Ho ho ho -- they think they are going to work through this by incentivizing folks ... They think they've come down in price enough ... Some woman asked how their pricing changes would affect the market -- they said not at all -- sure, sure. All the other markets are still hot -- they keep saying that -- some guy asked them why they missed what was coming in LV -- they say they didn't monitor well These guys describe falling off a cliff -- they don't say that -- but not seeing it coming -- and being able to raise prices like they have for over a year without folks slowing buying -- there wasn't a smooth response at all for them to see Someone is asking them about the average hit to backlog -- he says 70k per home on average -- also an effect of reduced closings Ray James guy asking about land and possible writedowns -- margins in mid to upper 30's even after these markdowns the spokesman said Cancellation rates in LV?? 13 week average -- 60%!! Accelerated to 75% for a shorter time frame Company wide average 13 week average is 13% driven mostly by Las Vegas -- Says prices are still above guidance given in February after reductions -- Material costs not an impact to earnings Why are so many people willing to part with deposits? Cheaper for them to walk and buy some where else or they can't close on their (selling) homes for the price they thought -- On follow-up question they said "better deal" was the primary reason -- I don't think they are telling the truth deposits not very big -- as you can imagine about 1600 units in backlog in LV total number of houses not sold?? -- can't provide that number <<

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