Homebuilders slash construction as Chinese buyers fade

Southern California homebuilders slash construction 10% as luxury market, Chinese buyers fade

?In Southern California and primarily, Orange County and even more significantly Irvine, the foreign buyer and principally, the Chinese foreign buyer, first and second generations, made up 75 percent to 80 percent of the marketplace,? Larry Webb, CEO of New Home Co., recently told investors. ?And certainly, in the second half of last year, that buyer group was reduced significantly.?
https://www.ocregister.com/2019/03/...tion-10-as-luxury-market-chinese-buyers-fade/

Makes me think that US companies still don't understand China or Chinese buyers...the spigot has been closed for a few years.

Builders are great at long term build planning, but not so hot in watching long term buyer trends. The product will arrive, but more often than not their sales staff is caught wondering where all the buyers have gone.

Perhaps as well that's why a few bulk finished lot sales to other builders has been occurring. 

The other problems is that the planning process from zoning/permit approval to grading/site improvements to actually selling homes can take 18-24+ months and builders are slow to make adjustments when the market slows.  It's like steering a big tanker ship. The new home (shadow) inventory in the higher end is a big headwind to that market.

I am not a bull or bear when it comes to housing but just following facts wherever  they take you

And fact is China is pumping massive amounts of stimulus in the system for last few months ? this time it is more consumer oriented as opposed to the traditional building booms of the past .

Chinese stock market is best performing this year of all large markets

People here correctly pointed out the housing slowdown last year . But media tends to cover yesterday?s stories as we all know

Let?s see what happens 6 months for now . We are already past the trough I think .  Unless we are in for a repeat of 2015 when , after the 2014 sell off, market initially rallied in first half 2015 and then got crushed towards December .

fortune11 said:

I am not a bull or bear when it comes to housing but just following facts wherever  they take you

And fact is China is pumping massive amounts of stimulus in the system for last few months ? this time it is more consumer oriented as opposed to the traditional building booms of the past .

Chinese stock market is best performing this year of all large markets

People here correctly pointed out the housing slowdown last year . But media tends to cover yesterday?s stories as we all know

Let?s see what happens 6 months for now . We are already past the trough I think .  Unless we are in for a repeat of 2015 when , after the 2014 sell off, market initially rallied in first half 2015 and then got crushed towards December .

Click to expand...

Sure. Great this year but terrible the past few years.

Just like how the us stock market is doing incrediblely well if you forget about the December drop.

B2FiNiTY said:

fortune11 said:

I am not a bull or bear when it comes to housing but just following facts wherever  they take you

And fact is China is pumping massive amounts of stimulus in the system for last few months ? this time it is more consumer oriented as opposed to the traditional building booms of the past .

Chinese stock market is best performing this year of all large markets

People here correctly pointed out the housing slowdown last year . But media tends to cover yesterday?s stories as we all know

Let?s see what happens 6 months for now . We are already past the trough I think .  Unless we are in for a repeat of 2015 when , after the 2014 sell off, market initially rallied in first half 2015 and then got crushed towards December .

Click to expand...

Sure. Great this year but terrible the past few years.

Just like how the us stock market is doing incrediblely well if you forget about the December drop.

Click to expand...

Business mini cycles occur every 3 years . China was in stimulus mode after the crash of 2015 just as they are now after the crash of last year . 

Crash of last year in the US is  practically material only to the extent people were smart enough to load the boat in December.

That is the whole point of my post ? don?t get anchored to ?recency bias? . Equity Market looks forward and real estate usually lags . Maybe the case this time around as well .  Homebuilder stocks that have gotten decimated have stopped reacting further to bad news that may already be priced in .

Again ? follow the data to guesstimate what may happen and don?t try to answer what ?should happen ? as the second question entails heavy emotional component and  biases

fortune11 said:

I am not a bull or bear when it comes to housing but just following facts wherever  they take you

And fact is China is pumping massive amounts of stimulus in the system for last few months ? this time it is more consumer oriented as opposed to the traditional building booms of the past .

Chinese stock market is best performing this year of all large markets

People here correctly pointed out the housing slowdown last year . But media tends to cover yesterday?s stories as we all know

Let?s see what happens 6 months for now . We are already past the trough I think .  Unless we are in for a repeat of 2015 when , after the 2014 sell off, market initially rallied in first half 2015 and then got crushed towards December .

Click to expand...

I think you are spot on with this entire post.  But wait how do you know it was a housing slowdown and not just seasonal?  ???

fortune11 said:

I am not a bull or bear when it comes to housing but just following facts wherever  they take you

And fact is China is pumping massive amounts of stimulus in the system for last few months ? this time it is more consumer oriented as opposed to the traditional building booms of the past .






Chinese stock market is best performing this year of all large markets

People here correctly pointed out the housing slowdown last year . But media tends to cover yesterday?s stories as we all know

Let?s see what happens 6 months for now . We are already past the trough I think .  Unless we are in for a repeat of 2015 when , after the 2014 sell off, market initially rallied in first half 2015 and then got crushed towards December .

Click to expand...

Wow if we are past trough, I haven?t seen anything (sfr) in the 750-1.1 range that I?ve liked except 1 houses that wenting pending all cash. There is some inventory but nothing nice selling at a discount.