The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Ramsey Su who wrote (59744)	8/11/2006 6:27:12 PM
From: XoFruitCake	Read Replies (1) of 306849

I think the conference call is going to be available for at least a few more days. I listened to the call twice and laughed both time. The analysts were very concerned about their tower division and specifically their default rate. They have a total of 6 defaults last Q. Multiple analysts were trying so hard to ask the same question in different way to see if the default rate is going to be higher in the coming quarter. Any other HB would would kill for 6 default in 300+ unit closed in a Q. Default rate clearly is the thing to watch for WCI tower division. But we won't have significant default until at least 4Q06 or 1Q07. All the condo were sold about 2 years in advance. So condo closing now were sold in 04. And buyer paid 20% deposit. With this kind of number, we need today's price 20% lower than 04 price in order to have massive default. I don't believe we are there yet. But once we move to 07, then we just need the resell price to be 20% less than 05 price (which I think we are there already). If we believe June/July 05 was the peak then 07 and 08 is the years with massive default and all the bad thing that can happen to cash flow and loan covenants..

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