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alstry (< 20)

America Shutting DOWN cont.......



May 08, 2009 – Comments (11)

MDC is probably the best capitalized public homebuilder in America.

Sales in Q1 2007 were $711 million

Sales in Q1 2008 were $355 million

Sales in Q1 2009 were $175 million

Q1 is the peak of the very important Spring Selling Season where many orders are taken for buildout throughout the year.

Backlog at the end of Q1 2007 was $1.50 Billion

Backlog at the end of Q1 2008 was $623 Million

Backlog at the end of Q1 2009.......drumroll please...........$196 million......

$196 million?????????????????????????????????????????? Less than 15% of what it was a couple years ago??????

What kind of sales is MDC going to have in 2009 if it has little backlog and standing inventory in Spring to sell throughout the year????????

That right my friends....those homebuilders that can afford to are bascially shutting down operations because it is seemingly no longer profitable to build homes on any kind of scale.

Simply think about the impact on the economy.......

Pay attention to the numbers....not the headlines.

Headlines make the most noise.......numbers rule in the end.

11 Comments – Post Your Own

#1) On May 08, 2009 at 8:45 AM, automaticaev (< 20) wrote:

mabe the problem is that a house worth 20k costs 200k you see its 10x what they are worth.  Houses can be put up in a week then someone has to pay for it for how many years,  Its rediculous the land it is built on is too expensive.  They also pay people to do nothing.  I knew this guy that worked for an unamed home builder and all he ever did was punch in drive home and smoke pot all day.  Its a rip off everyone buying a house at the prices they are now are being had.

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#2) On May 08, 2009 at 9:24 AM, MikeBobulinski (< 20) wrote:

I wonder why this would come as a surprise.  Credit is all but frozen.  Foreclosures continue.  Unemployment is at all time highs.  Two years worth of foreclosed homes on the market.  Why build more when there are plenty of existing homes out there?  So MDC's numbers are actually in line with the current environment.

Does that make them any less of an indicator that bad things are to come?  Not really.  If they are taken as a representative sample for all homebuilders, then one might expect that some will go under or at the very least have to cut costs and that usually means letting people go.  So this could indicate that the housing industry may go through another round of job cuts. It may not.

But America Shutting down?  That is almost as bad as saying that 16 points down on the DOW is a "stocks wilting", "stocks retreat", or any other over the top description.  Yes, I realize that this blog is but one in a series of blogs giving information that points towards the title, but I think it might be a little overdone.

At this point things look like they are shallowing out...based on the numbers released today.  Granted, the revisions will probably change that in a month.  So, I'll have to hold steady to my own course and see what the future holds.  I don't think the country is shutting down.  In my area, I do not see anything that points to that.  But then again, I live in an area that is heavily subsidized by the government...large military and government presence. 

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#3) On May 08, 2009 at 9:29 AM, automaticaev (< 20) wrote:

its obvious what the future holds. dow 13000 and higher forever.  Primary uptrend.  It goes up and down but w8 20 years look at the graph and overall it will be up.

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#4) On May 08, 2009 at 9:31 AM, alstry (< 20) wrote:

The housing industry was responsible for approximately 50% of all job creation in the early 2000s.  Commercial and Residential Real Estate was directly and indirectly responsible for about 20% of GDP at peak.

20%......think about that for a second.

Autos were responsible for about 5%..........

Now healthcare is starting to slow.......another 20%.........

I could go on but you get the point.........revenues are EVAPORATING everywhere

SAN FRANCISCO (Reuters) – California may have to borrow more than $20 billion in the coming 2009-2010 fiscal year as it struggles with cash flow problem, a budget watchdog for the state said on Thursday.

Pay special attention to the words MORE THAN.....

As I said...revenues are evaporating practically EVERYWHERE

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#5) On May 08, 2009 at 9:40 AM, StopLaughing (< 20) wrote:

Much of the job creation in the housing industry was for an illegal alien labor force. We may have a 10% buffer on unemployment because of illegals. They tends to move back when jobs dissappear.

You do not see the day labor locations anymore where a contractor drives up and hires a dozen people for the day. Housing was a bubble. It has burst and the sooner the inventory is worked off the sooner the country returns to a more normal economy.

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#6) On May 08, 2009 at 9:41 AM, MikeBobulinski (< 20) wrote:

I love the emphasis you place on "everywhere".  It overshadows the fact that you state "practically" everywhere.  Practically everywhere is a sensationalized way of saying "revenues are evaporating in many places" but emphasizing the word "everywhere" gives those with a quick read the impression that it is happening everywhere.

Just noting that you do a great job of sensationalizing information.  Your message is still valid in that the numbers you use support your message and are pretty much irrefutable.  But in many ways you are like the anti-media.  You do the same amount of sensationalizing that the media does...just in the opposite direction.  And while I may not agree with your line of thinking all the time, I do enjoy reading your posts.  I always learn something...not EVERYTHING, but something.

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#7) On May 08, 2009 at 9:59 AM, alstry (< 20) wrote:

Let's see where revenues are evaporating.....



Residential and Commercial Real Estate




Starting to slow......

Health Care

I guess practically everywhere is more accurate...sorry for any confusion.


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#8) On May 08, 2009 at 10:13 AM, MikeBobulinski (< 20) wrote:

Like I said, Alstry.  Not arguing your point.  I just don't see the same pain where I live, and your placement of emphasis when making your points tends to be a bit alarmist in nature.  I guess my overall point is why does any of this come as any kind of surprise?  I understand your points regarding media and how they choose to represent information or not, but no one is arguing that we aren't in a hurting economy.  No one doubts that things are going to stay this way for a bit.  BUT not every negative report is the signal for the end of our way of life.  If that were the case, then the first time you raised the banner about the economy shutting down should have been the only time you needed to raise the banner.

Bottom line?  Stealing a line from a Terminator movie...

The future is not set. There is no fate but what we make for ourselves.

With everyone trying to find ways to improve the future, it may take time, but I believe the future will be better.  Admittedly, it may be tough to get there. 

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#9) On May 08, 2009 at 10:57 AM, russiangambit (28.88) wrote:

> just don't see the same pain where I live

Mike, you live in VA, right? You have government procted jobs all around you that is why you don't see the difference. But with tax receipt collapsing by 20-30%, even the government will need to downsizes, Give it a year or so in you area. Here in Houston we were protected by high oil, for a while. Lay offs only started in January-Febrary, a few months behind the rst of the country,  and it is getting worse here. But still, the unemployment is only at 6.6% in Texas. If we ever get to 8-10% like the rest of the country, it will be pretty scary.

In texas we have a lot of illegal immigrants too, so even though official unemployment is at 6.5%, illegals are not included. And so the retail is really hurting right now.

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#10) On May 08, 2009 at 12:19 PM, MikeBobulinski (< 20) wrote:

This is true, and I realize that the heavy government presence where I live is keeping things in a bit better shape than elsewhere in the country.  I guess, we'll have to wait for a years time to pass and take a look back and see how things have fared.  I am optimistic that in a year, things will have improved all over the country.  Things will be different for certain, and not everyone will be out of the woods...but I am thinking that as a country we will build enough inertia to overcome the problems and will come out better for the effort.

As I have said before, I could also be wrong and a year from now, I might be singing the same tune as Alstry or worse. 

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#11) On May 08, 2009 at 2:17 PM, givmeabreak (28.40) wrote:

Hey al, where is your update on U6? I guess it did not cross 17%, or you would have blogged on it by now.

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