Us Builders

[Van]

Anyone keeping an eye on the US builders?

They've been in a steady downtrend since Mid-late 2005, and getting hammered further today..

[MrB]

Anyone keeping an eye on the US builders?

They've been in a steady downtrend since Mid-late 2005, and getting hammered further today..

Yup, they've been in steady decline since last Autumn. I've been very surprised at UK housebuilders though. Taylor Woodrow up 2.6% today, others have performed stunningly well all things considered. have a look at Dr Bubb's summary http://www.housepricecycle.com/

I think it was British Land that sold off their entire residential property portfolio towards the start of the year. Which is a bit odd, if not insightful : http://news.bbc.co.uk/1/hi/business/4733406.stm

[Van]

US Builders' plumbing new lows:

US Builders

[MrB]

WASHINGTON (AFX) -- U.S. home builders have turned negative on the housing market for the first time since just after 9/11, the National Association of Home Builders and Wells Fargo said Monday.

The NAHB/Wells Fargo housing market index, a builders' sentiment gauge, fell six points in May from a revised 51 to 45, the lowest level since June 1995, the industry group said. The index shows more builders say the market is "poor" than say it's "good."

The index has fallen 23 points in the last seven months. A year ago, the index was at 70.

"Rising mortgage rates, deepening affordability issues and the retreat of investors/speculators from the marketplace are prompting single-family home builders to further adjust their perspective" on the market, the NAHB said in a press release.

The industry group expects new home sales to fall 12% this year from the record 1.28 million in 2005. They expect housing starts to fall about 7% from 2005's record 2.07 million.

The movement in the index is "not inconsistent with the orderly cooling-down process we're projecting," said David Seiders, chief economist for the builders.

Despite the sharp decline, builders are still more optimistic about sales over the next six months than they are of current sales.

In May, builders' assessment of current single-family home sales fell to 50 from 55. The assessment of future sales dropped to 54 from 59. The assessment of traffic of prospective buyers dropped to 32 from 39. All three subindexes were at their lowest levels since mid-1995.

Builders in the West remained the most confident, with the index falling eight points to 60. The index fell three points in the Northeast to 47, two points in the Midwest to 30, and six points in the South to 51.

On Tuesday, the Commerce Department will report on April housing starts. Economists are looking for a small increased to about 1.97 million annualized starts from 1.96 million in March.

It used to be that the builders' index tracked housing starts quite closely, but the relationship has broken down in this decade. Starts have been much stronger than would be implied by the builders' index.

In a separate release Monday, the National Association of Realtors said sales of existing homes were down 2.1% in the first quarter from the same quarter a year earlier. Five of the once-hottest state markets cooled substantially. Meanwhile, median prices for existing homes sold in the first quarter were up 10.3% from the first quarter of 2005, down from a 13.6% increase in the fourth quarter.

This story was supplied by MarketWatch. For further information see www.marketwatch.com.

Nice quote in bold. A fluffy way of saying there might be a crash.

Edited May 15, 2006 by MrB

[Van]

US Builders' index is down yet another 3% today, setting new lows. Gotta ask How low can they go?!

"Despite the sharp decline, builders are still more optimistic about sales over the next six months than they are of current sales."

Traders have a saying - "'Hope' is a dirty word."

[Van]

I keep thinking "How much lower can they fall?" and that they must be due a bounce sooner or later.. and they just keep falling.

SPF -8.73%

Sector -4.65%

Soft landing my @rse.

http://bigcharts.marketwatch.com/industry/...cind_period=3mo

"Shares of Standard Pacific (SPF:NYSE - news - research - Cramer's Take) were among the NYSE's losers Monday, falling 6% after the homebuilder said that lower order levels during the first two months of its second quarter would likely lead it to reduce its earnings and delivery guidance for the full year.

The company said that net new home orders for the first two months of the second quarter fell 41% from a year ago. Standard Pacific said the year-over-year decline was "driven in large part by an increase in the company's cancellation rate and continued softening demand in many of the company's larger markets."

Gross orders fell 22% from a year ago, the company said. As a result, the builder expects that it will offer a reduced 2006 earnings and delivery outlook when it reports second-quarter earnings at the end of July. Analysts polled by Thomson First Call project full-year earnings of $6.32 a share. Shares were trading down $1.82 to $28.18.

Another homebuilder, Technical Olympic USA (TOA:NYSE - news - research - Cramer's Take), fell 4% after the company said its second-quarter orders would be down 25% to 40% from a year ago. "The company's combined net sales orders are being negatively impacted by decreased demand from the record levels of 2005, a more competitive sales environment, and higher cancellation rates," the company said. Technical Olympic said it expects these conditions to affect most of its markets through at least the remainder of 2006, it said. Shares were trading down 71 cents to $17.38. "

Edited June 5, 2006 by Van

[Van]

And another -3.88% down today - would've made a great short.