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

To: Perspective who wrote (98009)	12/20/2007 8:38:11 PM
From: Grandk	Respond to of 306849

With the recent CC's from the homies I find it interesting that anyone would consider being long here. However, that is what creates a market and I welcome any opinions on why one should be long any of the homies here. I am at a loss though on any takers up to this point that have anything substantial to offer. Like you stated, not good for anything but a ST trade.

To: Perspective who wrote (98009)	12/21/2007 10:14:56 AM
From: John Vosilla	Respond to of 306849

'The question is what profitability will look like over the next five years with so much excess building in the last five, and the reversals of the larger home trends.' Exactly..for now they are getting crushed by margins due to declining prices, very high land cost basis and high debt levels from the gogo years. Once this current cycle ends it will be a different game but we are years away from any dramatic change..New entrants will buy lots at 80%+ discount by 2009..costs of construction will go up and down over the near term buy probably much higher down the road..prices of homes will stabilize and then start rising again.. Big key the next cycle is will home prices go up quicker than costs of construction that would benefit the builders if/when the next inflationary cycle kicks in