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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (6083)	5/10/2004 11:59:08 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 116555

For six years most large home builders have kept lean inventories. I know for a fact that three recently took the plunge on large land inventories which in each case will enable them to triple their output this year. For the past several years they have not been able to sell as many homes as they could have because the could not get the land approvals processed quickly enough. Once again they have gone heavily into debt to buy large parcels of land at prices which will probably prove to be albatrosses around their neck in short order. These firms are not like Weyerhauser firms like Pardee and Winchester which have the capital from their corporate parent to buy land cheaply in down-periods years in advance of an upturn. This is exactly what caused most large home builders to go through bankruptcy proceedings in the early 1990's.