Homebuilder BK predictions

[graphrix_IHB]

<p>Which builder? Should we stay big like StanCrap and Sleazer homes who are rumored to have troubles? </p>

<p>When? How soon? Before the quarter end or year end?</p>

<p>I won't make a prediction but for the big boys Khov, StanCrap and Sleazer all have some cash flow problems. There are others out there too. Like CalCoastal who has half the cash from last quarter and the Brightwater project. I bet Laing takes over this 3 decade old project. We also know that WCI is on a death watch with the amount of cranes sitting idle over their Florida condo tower projects. </p>

<p>IHB readers what say you?</p>

 

[IrvineRenter_IHB]

I think WCI will bite the dust. They are the bagholders on a lot of Miami condos. I don't see a way out for them.





I don't know if we will see any of the major homebuilders go under, but I would not be surprised to see some of them disappear through buyouts and industry consolidation.

 

[irvine123_IHB]

During the last down turn, some smaller builders either disappeared or got acquired by the larger ones. I think Lennar bought bunch of them at that time. Companies like Lennar, Toll Brothers, and Stanpac probably will come out this mess in several years relatively untouched. The current rumor on Stanpac's liquidity probably is overblown (JPM came out an research yesterday). Also, they have hard assets though value has come down, but only by 10 to 40%, so still there is quite bit of value left. "run on the bank" is not very likely.





Personally, I have started to pay attentions to the large builders to look for potential buying opportunities for the long term. I remember seven or either years ago when the oil was trading at low as $8 barrel, all the marine drilling companies were hard hit just like the builders, and mortgage firms that were getting hit now. I was able to accumulate many shares in the period of 24 months, and came out this thing with a lot of gains. Not sure I can do it this time, but it won't hurt to start window shopping and do some research.





It seems some of of the blogger here works for builders / developers, you guys maybe able to share some thoughts (without getting trouble with SEC!!)?

 

[bishie_IHB]

WCI projects:





Miami: 4 Projects (Miami is still the center for Latin America so it actually isn't as hard hit as some of Florida)


Ft Lauderdale: 5 projects (Canadian retiree destination. Hard hit)


Naples: 8 Projects ( Naples is a haven for retirees from the midwest; it is getting slaughtered)


Ft Myers: 3 projects (1:15 population to listing ratio...)


West Palm: 4 projects (Jewish retiree destination. The wealthy are still doing okay but are taking a hit from the recent stock market troubles)


Tampa/Ocala: 3 projects (This area is very hard hit since it is nearly all retirees)


Perdido Key: 2 projects (This area went into a bubble after the hurricaines and has crashed since)


Palm Coast/Jacksonville Beach: 2 projects (This is a more affordable market than other Florida destinations...but WCI product is never affordable)


DC: 8 projects (DC is doing well due to high government spending but WCI's projects are extremely high end SFR)


NY/NJ: 6 projects (NY had been doing well due to the strong stock market; WCI's projects are senior living in NY)

 

[EvaLSeraphim_IHB]

If there are any BKs, I hope for reorgs over liquidations. Why? I would hate to see owners with poorly built homes not be able to pursue their defect cases against the builders. We've heard the horrors of Liarnar's "quality" and I'm sure the others are only somewhat better, given that many subs use day labor rather than trained craftsmen (although true craftsmen have been gone for decades). When the sentiment is "get 'em built and get 'em closed," speed prevails over quality.

 

[IrvineCommuter_IHB]

At this point, all the builders are bad because they subcontract their work out. In turn, the subcontractors hire day laborers to do the construction work because they're a lot cheaper than union. So your potential house is being built by guys who picked up the drill for the first time this morning. Good thought. . . huh. .





I think that the big boys will survive only because they'll simply abandon ship if it gets bad enough and simply hide low. The newer companies will have a hard time because they were forced out to the more distant areas (IE, Riverside, and etc.)





BTW: I am getting sick of watch KHov's CEO keeping saying how great the fundamentals still are. . . violent thoughts have cross my mind.