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IBDvalueinvestin (98.48)

Home builders? Are they not suppose to be first to recover after being first to fall?



March 11, 2009 – Comments (11) | RELATED TICKERS: KBH

That could be the case but not for all home builders, only a select few,

One is KBH which has a forward PE of 15, a rare home builder with a forward pe below 20

KBH looks like the best fundamental home builder and since the home builders would be the first to show signs the economy is rebounding , this stock should start rising ahead of the masses of stocks in the market.

11 Comments – Post Your Own

#1) On March 11, 2009 at 9:54 AM, IBDvalueinvestin (98.48) wrote:

KBH could see a surge in home sales in 2009 because for first time home buyers to take advantage of the $8,000 free fed. rebate , home buyers need to buy in 2009.

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#2) On March 11, 2009 at 9:57 AM, clanza875 (34.58) wrote:

IMO the homebuilders will not be the first to recover. Way too much supply. Something like 30% of the nations homes are unoccupied. Also, the people need financing to buy a house, so banks would have to recover before housing can get started. Banks, oil, or china would be my bet.

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#3) On March 11, 2009 at 10:03 AM, imobillc (< 20) wrote:

The answer is NO!

No PE no fundamental.....

The reality is the huge inventory available and the scarcity of buyers. Prices will go even lower before the start rising again.


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#4) On March 11, 2009 at 10:05 AM, imobillc (< 20) wrote:


I totally agree with you...

I just got done reading your comment....


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#5) On March 11, 2009 at 10:11 AM, IBDvalueinvestin (98.48) wrote:

So your saying first time home buyers which have delayed buying their first home for 2 years will not buy in 2009.

They will not take advantage of the free Fed. $8000 credit 

Home median prices in USA is at $225k 

That $8,000 is a pretty big chunk to miss out on??

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#6) On March 11, 2009 at 10:15 AM, clanza875 (34.58) wrote:

I've never bought a home and its not because i cant afford too. I have no interest in their $8k. Housing is still way overpriced in most parts of the country. Why would i accept $8k to go buy a home thats at least 100-200k overpriced?


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#7) On March 11, 2009 at 10:20 AM, IBDvalueinvestin (98.48) wrote:

saying a home is 100-200k overpriced means you want the home for free lol. This kind of thinking will make you a renter forever.

That is not all bad, some people like renting and being worry free.

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#8) On March 11, 2009 at 10:24 AM, IBDvalueinvestin (98.48) wrote:

Average USA home is 225k and cheaper in the majority areas where KBH serves, so saying homes are 100-200k over-valued  does not make sense unless you want the home for FREE Mr. Clanza875.

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#9) On March 11, 2009 at 10:56 AM, clanza875 (34.58) wrote:

Well I live in the northeast where everything is overpriced by 100-200k. There are still many overpriced markets. 225k is the average across the country. Some markets are underpriced, like vegas, but there is no need to build any more houses there as they already have way too many. I could pick up and move to the middle of nowhere to find a good deal, but do i really want to do that.

Anyway, back to the point, you have a great opportunity during this recession to pick up stocks on the cheap. I'd hate to see you throw your money away on housing stocks but its your choice.

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#10) On March 11, 2009 at 11:28 AM, imobillc (< 20) wrote:


The answer is yes!

Property taxes are still high and in certain cases it may take years before they go down (reassessment). The 8k will only cover insurance and tax cost. I don't think people are that desperate to purchase anything at this time. Prices will still go lower....

If their is one thing I may understand a little better than the average JOE...... that may be RE...... 



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#11) On March 11, 2009 at 11:44 AM, imobillc (< 20) wrote:

Home median prices in USA is at $225k  is a JOKE!

I live in Chicago and the market is different in a block by block

comparison. Median home price is a joke.....

Let me give you an example of how bad the economy is right now.

A year ago a 2 unit building in a blue collar neighborhood sold for 430k - NOW the same property is on the market for over 90 days and it won't sell. Guess what the asking price is?

They are asking $154,900 ..... yes that little... but no one cares to buy... not an investor nor a first time buyer.

A brand new house all brick 4 bedrooms, 3.5 baths a year was on the market for 1.2 MIL   now it is going to  auctioned, because the couldn't find a buyer for it. Guess what the asking price for the brand new house (kind of artsy neighborhood) is now ?    575K   what a bargain....

Rents will drop too.

Go to HUD.GOV and you will find a list of dollar houses....




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