Standard Pacific Corp
Why the subdued Consumer Price Index gives the Fed an excuse
This report will probably hold the hawks on the Fed at bay and allow them to continue to maintain ultra-low interest rates. That said, the bond market has been pricing in a tapering of quantitative easing.
Breaking Down Toll Brothers’ Results by Geography
Toll Brothers has exposure to some of the hottest markets, while avoiding some of the more downbeat markets like the most of the Midwest and parts of the Deep South.
Household Formation Jumps to a Record Level in June
Healthy household formation growth can have a powerful multiplier effect throughout the rest of the economy.
Company & Industry Overviews
Home Deliveries Rose in Most of D.R. Horton’s Regions in 2014
D.R. Horton increased the number of home deliveries in fiscal 2014 by 19% over 2013 due to increases in four out of six regions.
Basics of Standard Pacific
Standard Pacific generally acquires undeveloped land zoned for residential use. It typically buys and holds land for cash, although it uses options as well.
California Homebuilder Ryland: The Basics
Ryland targets the entry-level, move-up, and second move-up buyer. Its prices range from $160,000 to more than $650,000, with 2014’s selling prices averaging $330,000.
Ryland and Standard Pacific Join in a Merger of Equals
Ryland (RYL) and Standard Pacific (SPF) are two California-based homebuilders. Today, they announced their merger of equals transaction.
Homeowner Vacancy Rate Ticks Upward
On an annual basis, the homeowner vacancy rate fell by 9.52% in the quarter ended December, down from 2.1% in the last quarter of 2013.
Low Rental Vacancy Rate Pushes Builders into the Market
The drop in the rental vacancy rate indicates that owning a home still isn’t affordable for many people, despite the economic revival.
Higher Residential Construction Spending Keeps Sector Going
Spending on private construction, which accounts for more than 71.8% of all construction spending, fell 0.5% in January.
When Will Mortgage Rates Rise?
A rise in mortgage rates should signal a pickup in economic activity, higher income levels, and greater confidence among homebuyers.
Why Housing Indicators Matter to Investors and Homeowners
This series is focused on housing indicators. We’ll cover all the important indicators that positively or negatively affect the homebuilding industry.
D.R. Horton earnings impress the Street
This climate is obviously a recipe for mergers and acquisitions activity. The smaller builders will be driven into the arms of the bigger builders.
Seasonality Trumps The Bond Market Rally
The MBA Purchase Index decreased 6.9% in the week ended December 12, 2014, despite a strong bond market rally.
All Real Estate Is Local: Why Home Price Appreciation Varies
The real estate recovery has been uneven. Some parts of the country are outperforming others. The Pacific and Mountain states outperformed the rest of the country over the past two years. The Middle Atlantic and New England states have underperformed.
Purchase activity is picking up, good news for builders
We’re coming up on earnings season for the builders. So far, most have reported good earnings. While housing is rebounding, it’s important to remember that these numbers are coming from an extremely depressed base.
D.R. Horton reports a big increase in revenues
Backlog increased 21% in unit terms, from 8,205 to 9,888, and 29% in dollar terms, from $2.2 billion to $2.9 billion. Backlog is an indicator of future revenues, which makes it an important statistic that investors should track.
The Fed’s end of quantitative easing affects REITs and builders
Last week was all about the FOMC meeting for mortgage REITs. The Fed maintained the target Fed Funds rate and ended quantitative easing, as it previously said it would.
Standard Pacific’s gross margins may be plateauing in 3Q14
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 the largest boom/bust housing cycle in U.S history. We have made significant progress to-date. I believe the housing market is less volatile than perceptions about […]
Standard Pacific’s Q3 2014 earnings: Company overview
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.
Location, location, location: Why geography matters
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.
The CoreLogic Index shows home price appreciation is decelerating
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.
Sales fell, increasing business inventories in August 2014
Business inventories are important economic drivers, especially when they build. Historically, recessions start with a buildup of inventory.
Understanding the key to consumer confidence for homebuilders
Consumption is the major driver of the U.S. economy. It accounts for 70% of GDP. Consumption has been relatively subdued since the recession began, as Americans have boosted their savings rate and spent only on essentials.
Must-know: Home prices increase 7.4% YoY
The 7.4% year-over-year (or YoY) gain resembles the gains we saw during the bubble years. On a month-over-month basis, the increase was only 1.2%. It was decent. The prices for ex-distressed sales increased 6.8%. Prices are still 11.9% below their peak in April 2006.
Toll Brothers and the road ahead for the homebuilding sector
It’s important to remember that housing starts are still highly depressed compared to historical norms. From the late 1950s through 2002, we averaged 1.5 million starts a year.
Why household formation will drive builders like Standard Pacific
While Standard Pacific 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 Homes’ background affects its 2Q14 earnings
Founded in 1965, Standard Pacific (SPF) is a Southern California–based builder with operations in California, Florida, the Carolinas, Texas, Arizona, and Colorado.
Why D.R. Horton may look at acquisitions after its 3Q14 report
D.R. Horton (DHI) reported net income of $113 million, or 32 cents per share, for the third quarter of 2014. Net income decreased 22.5% from $146 million, or 42 cents per share, in the third quarter of 2013.
Must-know: An overview of PulteGroup
Pulte operates in 58 distinct markets throughout 28 states—the company has a large geographic footprint—much larger than most of the other builders.
Business inventories rise, while inventory to sales ratio is flat
While the Great Recession was caused by excess debt, business inventories are still important to watch.
Kansas City Fed Manufacturing Report shows moderating activity
The general business conditions index slipped 4 points to +6, coming off the the best reading in two years in May. Interestingly, the reason for moderation in factory growth was attributed to a difficulty in finding qualified workers.
Must-know: Business inventories rise, but sales increase faster
Sales were up 0.7% month-over-month in April, while inventories increased 0.6%. The inventory-to-sales ratio fell slightly, to 1.29.
Why Toll Brothers reported a big increase in revenue in 2Q14
Toll Brothers reported first quarter revenues of just over $864 million, which was higher than Street estimates of $822 million. This was an increase of 67% from the same quarter last year.
Geography affects home price appreciation and builders like NVR
We’ve seen strong price appreciation in the energy-intensive states like Texas and North Dakota. These states have high-paying jobs that attract workers and have created housing shortages.
Is it time to rotate out of the West-Coast centric homebuilders?
The Kansas City Fed Manufacturing Survey is a barometer of economic conditions in the 11th district The survey is put out by the Kansas City Fed and covers a wide range of economic indicators, from general business conditions to new orders, shipments, unfilled orders, delivery times, inventories, prices paid and received, headcount, and average work […]
Why do homebuilders watch for rising real estate prices?
Homebuilders compete with existing homes for buyers, and increasing prices for existing homes means they have more latitude to raise prices for new homes.
Business inventories rise: Does cold weather take the blame again?
It’s essential to focus on the inventory-to-sales ratio, as spikes in this ratio portend slow-downs.
Why the FOMC and earnings drove bonds, REITs, and builders
Last week had some important data points with the FOMC meeting and also some key economic reports. The Fed decided to make another reduction in asset purchases.
Why PulteGroup is optimistic about the spring selling season
PulteGroup (PHM) reported fourth-quarter revenues of $1.66 billion, which narrowly missed the Street estimate of $1.67 billion. Sales were up 4.6% on a sequential basis.
Why is the Fed getting more optimistic about jobs in 2014?
Usually, at the March, June, September, and December FOMC (Federal Open Market Committee) meetings, the Fed releases its economic forecast for the current year and the upcoming two years.
D.R. Horton’s gross margins keep improving with a lack of inventory
While D.R. Horton remains optimistic about the spring selling season (which gets underway very soon), it noticed more strength in the move-up buyer than the first-time homebuyer.
Must-know: The Fed reduces asset purchases by another $10 billion
Yesterday, the Federal Reserve ended its January Federal Open Market Committee meeting and decided to continue to reduce asset purchases. This was Ben Bernanke’s final FOMC meeting.
Why D.R. Horton’s 1st quarter earnings impressed investors
D.R. Horton, Inc., is one of the largest homebuilding companies in the United States. It’s geographically diversified, with operating divisions in 27 states and 78 metropolitan markets.
Must-know: Building permits fell but the pipeline is still strong
Permits for single-family residences fell to 610,000, with multi-family permits basically flat at 350,000. In November, single-family permits totaled 641,000 and multi-family permits totaled 352,000.
Why investors should keep an eye on existing home sales this week
This week is a short week with the Martin Luther King Jr. holiday and not a lot of market-moving data. Tuesday and Friday have no economic data, and only Thursday has anything meaningful.
Must-know: Why the future looks bright for homebuilders
It’s important to remember that while growth is coming from distressed levels, current production is still well below historical averages.
Why low housing starts mean pent-up demand going forward
During the bust years, housing starts have been well below 1 million per year. In fact, we recently popped the champagne when we broke through a 1 million pace for a single month.
Why the FOMC minutes and weak payroll data drove REITS and builders
Last week, we had two important data points with the FOMC minutes from the December meeting and the Employment Situation report on Friday.
Consumer comfort keeps crawling back, reaching -28.4
The Bloomberg Consumer Comfort Index increased to -28.4 for the week ending January 5. The index bottomed at -54 in 2008.