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| gugaplex |
 Posted: Mon Jan 15, 2007 1:07 pm Post subject: CAUTION: Real Estate May be Bottoming |
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Investing Manager
Joined: 01 Jul 2006
Posts: 580
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I expected real estate to slow a while back, and it did more than slow-it screeched to a halt. Real estate investors have completely turned around from their bullish stances of a couple years ago. I think that real estate bulls were scared that their assets would depreciate as quickly as tech stocks did when the bubble burst 7 years ago.
Real estate should not be treated the same way as tech stocks, there is a NATURAL demand for housing that will serve as a support for the industry. Tech stocks were still a rip-off based on valuations even as they corrected and lost 60% or more of their value. Most home-builders and mortgage companies are trading at extreme discounts (2/3 of Book Value and 6-7 P/E ratios). On top of the low valuations, most of these stocks pay generous dividends. You may kick yourself one day when you realize that ya could have bought a beaten-up stock in this industry that trades way below Book Value and had a great dividend yield.
My favorites are TOA, NEW, and IMH...
Best of luck to all. |
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| frusnak |
| Posted: Mon Jan 15, 2007 3:34 pm Post subject: |
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CFO
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My only real experience, knowledge?, is with what happened here in florida. The demand for housing was being fueled by the investing buyers. They drove the demand and when the market got saturated the tail end of the bandwagoners got burned! If you purchased a home for your personal need you will make out. If you bought as a investment you are getting crunched right now! It is a buyers market in most areas.  |
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| Grimreaper |
| Posted: Tue Jan 16, 2007 3:20 am Post subject: Re: CAUTION: Real Estate May be Bottoming |
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CFO
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| gugaplex wrote: | I expected real estate to slow a while back, and it did more than slow-it screeched to a halt. Real estate investors have completely turned around from their bullish stances of a couple years ago. I think that real estate bulls were scared that their assets would depreciate as quickly as tech stocks did when the bubble burst 7 years ago.
Real estate should not be treated the same way as tech stocks, there is a NATURAL demand for housing that will serve as a support for the industry. Tech stocks were still a rip-off based on valuations even as they corrected and lost 60% or more of their value. Most home-builders and mortgage companies are trading at extreme discounts (2/3 of Book Value and 6-7 P/E ratios). On top of the low valuations, most of these stocks pay generous dividends. You may kick yourself one day when you realize that ya could have bought a beaten-up stock in this industry that trades way below Book Value and had a great dividend yield.
My favorites are TOA, NEW, and IMH...
Best of luck to all. |
Ahhh c'mon....the fact is that homes in many pawts o'da country (including mine) dubled in value from 2002 to early 2006. Those are homes!....not stocks!  So what is it then? Ifn ya look at the history of RE you will NEVER find a 3 year period where home prices dubled. Are you saying a doubling of home prices could be expected to happen at least once every 10 years from this day forward? or are ya willing to admit that maybe sumthin does seem a bit....."odd"? I think you should get a clue and maybe dig a little deeper into what happend under da Bush regime the past several years.....you may not be shocked but I think you will at least become a tad more...."cautious"  |
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| gugaplex |
| Posted: Wed Jan 17, 2007 5:17 pm Post subject: Re: CAUTION: Real Estate May be Bottoming |
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Investing Manager
Joined: 01 Jul 2006
Posts: 580
This Month: 1
Location: USA
15130.80 e$
Net worth: 110,780.30
Portfolio Value: 95,649.50
Monthly Return: -20.98%
Trades this month: 0
Churn Rate: 0.00%Items
|
| Grimreaper wrote: | | gugaplex wrote: | I expected real estate to slow a while back, and it did more than slow-it screeched to a halt. Real estate investors have completely turned around from their bullish stances of a couple years ago. I think that real estate bulls were scared that their assets would depreciate as quickly as tech stocks did when the bubble burst 7 years ago.
Real estate should not be treated the same way as tech stocks, there is a NATURAL demand for housing that will serve as a support for the industry. Tech stocks were still a rip-off based on valuations even as they corrected and lost 60% or more of their value. Most home-builders and mortgage companies are trading at extreme discounts (2/3 of Book Value and 6-7 P/E ratios). On top of the low valuations, most of these stocks pay generous dividends. You may kick yourself one day when you realize that ya could have bought a beaten-up stock in this industry that trades way below Book Value and had a great dividend yield.
My favorites are TOA, NEW, and IMH...
Best of luck to all. |
Ahhh c'mon....the fact is that homes in many pawts o'da country (including mine) dubled in value from 2002 to early 2006. Those are homes!....not stocks! So what is it then? Ifn ya look at the history of RE you will NEVER find a 3 year period where home prices dubled. Are you saying a doubling of home prices could be expected to happen at least once every 10 years from this day forward? or are ya willing to admit that maybe sumthin does seem a bit....."odd"? I think you should get a clue and maybe dig a little deeper into what happend under da Bush regime the past several years.....you may not be shocked but I think you will at least become a tad more...."cautious" |
Thanks Grim, I am quite cautious and nervous about home-builders and lenders at this point. However, I have learned that when I am most worried about a sector (either long or short), it is better to take the contrarian position.
Gosh, when TOA was at $7, I was really panicking. I talked to some of my peers and they were also nervous. At the time, I told them that since I am so scared maybe I should just plunk down some more cash in the stock. However, I neglected to add to my position and wish I did. |
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| Im Not Warren Buffett |
| Posted: Wed Jan 17, 2007 9:28 pm Post subject: |
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CFO
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Gugaplex,
How sure are you that TOA is out of the financial woods? I just took another look at their balance sheet, and I still see potential cash flow problems in the future, along with an inventory writeoff. Remember, all that "book value" is inventory that they can't sell. They miserably fail any sort of acid test ratio... and you don't happen to be a part of that shareholder class action lawsuit, do you? |
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| Grimreaper |
| Posted: Thu Jan 18, 2007 2:17 am Post subject: Re: CAUTION: Real Estate May be Bottoming |
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CFO
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| gugaplex wrote: | | Grimreaper wrote: | | gugaplex wrote: | I expected real estate to slow a while back, and it did more than slow-it screeched to a halt. Real estate investors have completely turned around from their bullish stances of a couple years ago. I think that real estate bulls were scared that their assets would depreciate as quickly as tech stocks did when the bubble burst 7 years ago.
Real estate should not be treated the same way as tech stocks, there is a NATURAL demand for housing that will serve as a support for the industry. Tech stocks were still a rip-off based on valuations even as they corrected and lost 60% or more of their value. Most home-builders and mortgage companies are trading at extreme discounts (2/3 of Book Value and 6-7 P/E ratios). On top of the low valuations, most of these stocks pay generous dividends. You may kick yourself one day when you realize that ya could have bought a beaten-up stock in this industry that trades way below Book Value and had a great dividend yield.
My favorites are TOA, NEW, and IMH...
Best of luck to all. |
Ahhh c'mon....the fact is that homes in many pawts o'da country (including mine) dubled in value from 2002 to early 2006. Those are homes!....not stocks! So what is it then? Ifn ya look at the history of RE you will NEVER find a 3 year period where home prices dubled. Are you saying a doubling of home prices could be expected to happen at least once every 10 years from this day forward? or are ya willing to admit that maybe sumthin does seem a bit....."odd"? I think you should get a clue and maybe dig a little deeper into what happend under da Bush regime the past several years.....you may not be shocked but I think you will at least become a tad more...."cautious" |
Thanks Grim, I am quite cautious and nervous about home-builders and lenders at this point. However, I have learned that when I am most worried about a sector (either long or short), it is better to take the contrarian position.
Gosh, when TOA was at $7, I was really panicking. I talked to some of my peers and they were also nervous. At the time, I told them that since I am so scared maybe I should just plunk down some more cash in the stock. However, I neglected to add to my position and wish I did. |
I try not to worry bout anything. And RE is definitely one thang I doan werry about. Da mawkets in my area are mixed. I tawk to people selling homes quite often. Mon I spoke to a guy who owns a run down historic home he paid $166K for 2 years ago and it is now assessed at $183.....he's axin $230K. I offered him the assessed value. He said it'll be werth $400K in 1 year.  In the meantime his tax bill went up to $2300 this year because the home is setup as a triplex.....and the home has been vacant for 1 year cause he doesn't wanna rent it out since he thinks it'll be easy to sell. Yesterday I spoke to a guy who is carrying 2 mortgages because they kept his wife's home as a rental when they were married. They have nice equity since they owned since 1998 but they took out a second....thus the 2 mtgs. Both mtgs balances total less than the $100K assessed value. He's axin $130K and he sounds desperate about being a landlord.....so maybe he'll be reasonable....we'll see. This chit dat happens when fokes get nutso cause da govmint passed out muny like candy takes awhile to unwind and we are only in the second inning maybe. That's based on the fact that all the anal-ysts are saying DA BOTTOM is in for the RE sector simply because this is the first area the homebuilding stocks stopped falling and even staged a little rally. DA BOTTOM fer TOL (for instance, but they all da same) is clearly visible on the 4 year chawt....and it doan come in bafo TOL goes sub $20. Think what dat'll do fo TOA.  Just be aware dat TOA is in a downtrend and you are now pushin a big boulder uphill.  |
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| Grimreaper |
| Posted: Thu Jan 25, 2007 8:31 am Post subject: |
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CFO
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| TOL off a stout 4% taday and now trading balow where Cramer realized the werst was over in da housing sector. Isn't it just amazing how Cramer seems to have his hand in every single stock or sector top that has been formed in the last 2 years?!!! |
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| Im Not Warren Buffett |
| Posted: Thu Jan 25, 2007 8:57 am Post subject: |
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CFO
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| Well, its a good thing there is a Cramer, otherwise the markets wouldn't do anything... |
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| Grimreaper |
| Posted: Thu Jan 25, 2007 9:16 am Post subject: |
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CFO
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| Im Not Warren Buffett wrote: | | Well, its a good thing there is a Cramer, otherwise the markets wouldn't do anything... |
Actually, my theory is dat Cramer is a "voice to da masses" fer a majer playa on Wall St. His call on the homebuilders is one example....GM anotha. Now looka his turnaround call on FleeEBAY....a few weeks bafo earnuns and sho nuff sho nuff right on que...afta dawgin it fer so long. Cramer gonna get stopped in his tracks eventually....you watch. Either because his stoopidity about da mawkets will eventually crush him or he's gonna get caught selling into rallies he creates. He already admitted to doing that on at least 3 occasions I know of. I think his overwhelming stoopidity and arrogance about his ignorance will get him though....gonna be fun ta watch! |
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| Bootyshakerb |
| Posted: Thu Mar 08, 2007 3:55 pm Post subject: |
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New Poster
Joined: 25 Feb 2007
Posts: 7
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I want all out corrections to happen in the housing market.
-future home owner outpriced by the area- |
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