I forgot how many said the bottom was in about 18 months ago!!!! I think once these stocks fall another 15-25% they will be a good purchase for the next 5 year out. Housing though still has a long way to go, I doubt there is a bottom until 2009. AP Tuesday July 10, 11:26 am ET By David Koenig, AP Business Writer D.R. Horton Sales Plunge 40 Percent, Sees Loss for Third Quarter DALLAS (AP) -- D.R. Horton Inc. will post a loss for the spring quarter after net orders fell 40 percent and the value of unsold houses is written down, the homebuilder said Tuesday, further evidence that the housing sector continues to sink. Horton said it took orders for 8,559 houses worth $2 billion in the three months that ended June 30, down from 14,316 homes worth $3.8 billion a year earlier. The decline was sharpest in California and less severe in the Southeast. The rate of canceled orders was 38 percent. "Market conditions for new home sales declined in our June quarter as inventory levels of both new and existing homes remained high, and we expect the housing environment to remain challenging," Chairman Donald Horton said in a statement. Horton said the company has adjusted prices to cope with the deteriorating market. The Fort Worth-based builder said profits from operations will be dragged to a loss from "significant" write-downs of unsold houses, reflecting the falling value of homes on the market. A glut of unsold new homes has pushed prices lower. Builders have responded by canceling options on land where they had planned to build. In March, Chief Executive Donald J. Tomnitz warned that 2007 would be a bad year in its entirety. Horton's June-quarter orders fell 53 percent in California and more than 40 percent in the Northeast, Southwest and South-central states including Texas. Orders dropped 25 percent in the Southeast. Horton expects to report results from its fiscal third quarter on July 26. Through the first nine months of the fiscal year, Horton said it took 27,313 orders worth $6.92 billion, down from 41,550 orders worth $11.36 billion in the same nine months a year ago. Separately, Horton said in a filing Tuesday with the Securities and Exchange Commission that it has removed a clause in its revolving loan that limited dividends and other payouts to shareholders to half the prior year's net income. The change will allow payouts to shareholders unless they cause the company to default on loan payments or violate other terms of the loan. The loan dates to December 2005 and is administered by Wachovia Bank NA. Shares of Horton fell 61 cents, or 3.1 percent, to $19.18 in midday trading.
I will be going to Florida to visit my aging parents for about 3 months (spending Thanksgiving with them, first time in 3 years), and will be looking over some real estate. I am currently tracking the foreclosure rates in their county and surrounding ones on a week/week basis. To put it nicely, there's a ton of hurt going around out there right now and it's going to get a little worse before it gets better. My parents live in a retirement dominated county and the foreclosure rates there are just now starting to curb a little. That's foreclosure rates! Now if foreclosures are still growing in a county that is mainly comprised of retirees, there's more to the downside to say the least. I'll probably be looking to buy next summer after the July 4th holiday unless something that's just too good to pass up comes along. With that being said, I'll still probably have to live in the house for at least 5 years before any substantial equity build is realized. So if you buy in '08, you're talking something like 2011 or so before you can really see some gains. What many don't realize is that when housing bottoms, it tends to stay there for some time. Just because the bottom is in doesn't mean there's going to be any profits to be had soon. Housing probably won't ever get back to the fever pitch is was at this last go-around in my lifetime - it will see its time come again, but probably not for sometime. I was able to ride this last boom with a couple of pieces of property that I sold for some nice profits and will probably catch at least one more real estate wave before retirement (another 20 years off). Also, the Boomers are going to start checking out in larger numbers as time passes so there's going to be plenty of supply for a long time. All these factors make the housing stocks much less attractive (even from a longterm investment standpoint) in my book. Good Luck!