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alstry (< 20)

CAPS new HB top dogger blogger



June 07, 2008 – Comments (3)

There is a new sheriff in town and his name is DemonDoug.

For your reading pleasure here is a link to his latest and greatest analysis of HBs.  It is on point, on time, and right on.

Don't listen to those heritics spreading false rumors that HBs will soon be profitable because they are writing their land down.  First of all, there is still a lot of writing to go, and second, in many parts of the country where new HBs build, even if you built on free land, you couldn't sell the house for construction cost. 

In Temecula, CA 15% of the homes are bank owned or in some stage of foreclosure.  And this is not a working class area, this is a community of about 20,000 nicer homes with many in the 4000 -5000 foot range.  Let me tell you folks, once a community reaches this distress level, nobody is making money building houses from the ground up, even if you paid him for the lot.

There are more and more areas like Temecula.  Fort Meyers/Cape Coral Florida, parts of Nevada, AZ, and now Texas.  Guess what.....these are all areas where a major concentration of tract homebuilding by national  builders.

Now we have years and  years of inventory built up.  And if the economy keeps going in this direction, we could have decades of excess inventory.  You think the Japanese ever thought they could have a 20 year downturn in 1989?

Until wages stabilize, job losses abate, foreclosures start slowing, vacant inventory decreases...the situation is only going to get worse....much worse.

And as for government intervention...for what?  We have too many homes already.  You think the government is going to subsidize building even more homes so prices can fall even faster?  RIDICCCCCUUUUUUUULLLLLLOUS!!!!!!  Now that we have negative absorbtion in many areas, it could take years, or as our boy DemonDoug so astutely recognizes.....decades before we stabilize.

So be careful of those flip floping optimists...its bad out there and getting worse.  These public HBs have HUGE overhead....BIG exectutive salaries, BIG professional fees and costs  to be public, and BIG infastructure costs even if they don't build a single house.

In many  areas now, each time a home builder erects a house, it is a money losing and cashflow negative proposition.  The more houses they build, the more cash flying out the door and more losses reported.

Why do you think the new hit song is called land for nothing and sticks for free?  During these times, mothballing is the best solution to preserve cash.  But few have the balls to tell you.  The talk about lower land costs and and fantasize about BS future profits.

Watch out for those singing glory can keep spanking the monkey if you find that satisfying, but the glory days are over and a new era is ushering in.....and DemonDoug is going to help guide you along. Further, if you ask him a question, he will very likely respond with sweet, sensible, and salient response.

We are a capitalistic society and CAPS is the ulitimate capitalistic game.  Competition is the lifeblood of excellence and seperates the winners from the losers.  People go to Stanford because they earned it, not because they are popular(but I have to admit, those that I know that went to Stanford, on balance, seem to have better social skills than other schools of comparable reputation....I think its the water). 

In addition, it doesn't mean that there can only be one successful brand in any particular space, it just means that there is only one top dog.  If you think Demon provides you with a quality product in exchange for a reasonable amount of your time, make sure you recommend his post.....and tell your friends about Demon and CAPS.

The more playing, the more satisfying it must be for people like Demon to be at the top.

3 Comments – Post Your Own

#1) On June 07, 2008 at 2:16 PM, TMFJake (95.24) wrote:

Thanks for bringing Demon's post to my attention.  Great analysis.

And Alstry, you're so right about Stanford students.  It may be the water; that might explain why on the other side of the Bay the students are a little more prickly--at least, that's my recollection. ;)


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#2) On June 07, 2008 at 3:30 PM, alstry (< 20) wrote:

I like Demon because he challenges me on the facts.  The boy really thinks.  9 outta 10 times I will kick his backside because my facts are generally dead on...but the man has character and provides great insight.

Not only that, when he does find something where I made a mistake on....I am the one better off for the clarification as well as everyone else/

It is what CAPs is all about...a competitive community helping each long as the blows are above the belt...the competition will make us all better players.

And as far as my Stanford comment, it was completely sincere.  Aside for a select few, most people who fancy themselves as intelligent really play slightly off the center of the curve....and that includes most that go to "the right schools." 

But the one thing that I must say about Stanford grads is that they are for the most part people I wouldn't mind going out and having a drink or two with.  To date, at this stage in my life, I can't say that about the other "right" schools.

Hey, can anything be done about my stupid wrong thumbed pick?  There is a perfect example of one CAPs player helping another.

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#3) On June 08, 2008 at 9:52 AM, TMFJake (95.24) wrote:

Shoot me an email with the details--and include your email in your note so that I can respond.  Fool On!  --jk

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