But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
The long-term builder picture hinges on the first-time homebuyer
While Standard Pacific (SPF) does cater to the first-time homebuyer, it has de-emphasized that market since the housing bust began. This was a smart decision.
Standard Pacific (SPF) reported net income of $56.6 million, or 14 cents per share, for the third quarter of 2014. Net income decreased 4% from $44.6 million, or 15 cents per share, in the third quarter of 2013.
Standard Pacific’s characterization of the current market state Standard Pacific (SPF) CEO Scott Stowell characterized the housing market’s current state this way: “We have experienced and continue to manage through…
Third quarter revenues miss Wall Street expectations Standard Pacific (SPF) reported third quarter revenues of $604.8 million. This was an 18% increase year-over-year and a slight uptick on a quarterly basis.…
Standard Pacific generally acquires undeveloped land zoned for residential use. It typically buys and holds land for cash, although it uses options as well. For large projects, it will undertake joint ventures with third parties.
Increases in foreclosure activity correlate with lower home prices because distressed properties tend to trade at a discount to nondistressed properties. These factors lower comparable sales prices (or comps), which, in turn, lower appraisals and the value of neighboring properties.
We’ve seen strong price appreciation in the energy-intensive states including Texas and North Dakota. These states have high-paying jobs that attract workers. This has created housing shortages, especially in North Dakota.
Real estate prices also drive credit availability in the economy. Mortgages and loans secured by real estate are major risk areas for banks. When real estate prices start falling, banks become conservative.
Over the past several months, mortgage rates and the ten-year bond yield stopped correlating. Last week, this trend broke as the two variables lined up once again. We’ll have to wait to see if this trend continues.
The big question for the builders is how they’ll be able to drive revenue growth in the future when they aren’t able to rely on simply raising prices.
PulteGroup reported net income of $141 million, or $0.37 a share, which beat the Wall Street estimate of $0.36 a share. The company earned $5.87 a share in the corresponding quarter last year.
PulteGroup’s gross margins have gone from the bottom quartile of the industry to the top quartile PulteGroup’s (PHM) gross margins for the quarter came in at 22.9%, which was an…
PulteGroup (PHM) reported third quarter revenues of $1.59 billion, which more or less matched the Wall Street estimate of $1.58 billion. Sales were up 4% on a year-over-year basis.
PulteGroup noted on its call that the first-time homebuyer has still been missing from the market, so the company has focused more on the move-up buyer.
Building permits Building permits and housing starts data are released jointly by the Census Bureau and the Department of Housing and Urban Development. Analysts use the information to anticipate the…
The CoreLogic Index is a widely followed index of real estate values. Unlike the other major indices—like Case-Shiller or Radar Logic—CoreLogic separates distressed sales from non-distressed sales.
The National Association of Homebuilders Sentiment Index (XHB) measures homebuilders’ confidence. It gauges how builders view current and future sales of single-family residences.
Existing home sales decrease to 5.17 million in September The National Association of Realtors (or NAR) reports existing home sales once a month. The seasonally adjusted number reports the completed…
Most builders—like Lennar (LEN), PulteGroup (PHM), D.R. Horton (DHI), and KB Home (KBH)—noted that traffic was beginning to decline. Buyers experienced sticker shock.
Mortgage rates Mortgage rates are the lifeblood of the housing market. This is why the Fed began quantitative easing in the first place. Lower rates allow homeowners to refinance. Refinancing increases homeowners’…