How Bad Will Things Get for All Homebuilders???
The following is a quote from one of our favorite bloggers:
Some of you cave dwellers with your magic rocks, divining rods, and virgin offerings still don't get it.... when we do reach a housing bottom the Private builder field (80% of national home sales) will be absolutely decimated... gone... kaput.... sayonara... auf wiedersehen..... and the remaining publics will be giggling like two stoners at a nitrous party....
I do tend to agree that home sales will deteriorate materially going forward. Think about this for a second:
If 80% of new national home sales is decimated.....what state is our economy in??????? Imagine about all the vendors and subs shutting down. How many newer foreclosures will be sitting empty???
Somehow millions of people will lose their jobs but there will be many flocking to giggling public builders to buy homes at 5X the price that they could buy a newer distressed home?????
Right now, it is hard to judge just how bad things really are..........banks are taking loans held for sale and converting them to loans held to maturity simply so they don't have to report the fair value on the books. We now have Enron type accounting infecting our banking system and few really know what solvency is anymore.
The problem in its essence is if the banking system is screwed......so is everything else in the economy...........including public builders.