New Orders Slowing In The Southwest
Housing company William Lyon Homes put out some numbers today which support the notion that the peak is behind us. "New home orders for the three months ended March 31, 2005 were 873, a decrease of 20% as compared to 1,092 for the three months ended March 31, 2004."
And did you know that in most states buyers can cancel deals preconstruction? Think about this when you hear talk of backorders. "The Company's cancellation rate for the three months ended March 31, 2005 was 12%, the same as for the three months ended March 31, 2004."
In another spot of fallout, the builder supply company Trex Company Inc. got a stock hair-cut when it announced lower revenue and profit.
6 Comments:
Thanks John
I've been reading your blog for a couple of weeks and like most of you I am amazed at whats been happening in the housing market. I live in manhattan and have been trying to buy an apt for one year.
The market here is showing no sighns of softening apt going way above asking prices I've tried to buy 7 different apts and in each case there were 8 or more different bids. I'm waiting for the market crash which I nthink it will, but in nyc we still haven't seen the top.
(in nyc we still haven't seen the top)
First hand accounts are very helpful Thank you..Ben
And did you know that in most states buyers can cancel deals preconstruction? Think about this when you hear talk of backorders. "The Company's cancellation rate for the three months ended March 31, 2005 was 12%, the same as for the three months ended March 31, 2004."
This has got to scare the poop out of all of them... seriously. Many of these builders are sitting on a years inventory and if prices reverse at all... imagine how many buyers will backout and wait to see how far it falls before going back in...
In the 90s after the 'ag crisis' had completely worked through... there was a mini-boom in ag... John Deere & Cat & Case all went nutz building tractors and all... I called on them.
At one plant I called on there was an 18 month backlog - but like you said - they were all 'cancelable'... there was a small drop in business and the 18 month backlog went to 'zero' almost overnight... turned out dealers were placing 'phantom orders' to make sure they could get the tractors... and since the delivery date was 18 months out they figured they had time to find a buyer... once the delivery dates started 'creeping in'... they had to decide and they decided to punt in droves...
I wonder if a similar situation will occur with speculators as this thing unwinds... is there a significant backlog of new house orders?
Dry fly,
(I wonder if a similar situation will occur with speculators as this thing unwinds)
Unquestionably.
Get this
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