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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: flint who wrote (25895)	12/12/2004 10:18:53 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

The flaw in your belief, that Home Builders make more money when land prices decline, is two-fold. First Home Builders have large land inventories on which they take enormous losses if land prices decline. Second, the demand for homes declines precipitously when home prices decline. Many people with more homes than sense unload into the declining market. .

To: flint who wrote (25895)	12/13/2004 12:37:29 AM
From: mishedlo	Read Replies (1) \| Respond to of 306849

Thanks for making my point. Housing has had record profits while it's greatest expense bubbled up. Lower that expense and the profit margins will only improve. The same analogy applies to industries with high energy costs. It's odd how many people understand that the plastic industry makes more money during a fall in oil prices, yet these same clowns will short Housing contractors thinking the deflation of their land expense will ruin them. I suppose when push come to shove most people are "smart" because they know how to parrot the main stream thought of the day. Lots of smart people here. Flint Wow - the perfect business Home builders go up with increasing land prices and even more with decreasing land prices. Gee, what could be simpler. It's a perfect, never fail world Mish