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alstry (< 20)

KB misses on Both Revenues and Losses



June 27, 2008 – Comments (0)

Prices are falling so fast and costs exploding so quickly that HBs simply can't keep up.

They take an order now based on one set of costs and prices may increase two or three times before the home is completed. Not only that, home values are falling so fast that builders are slashing just to keep up.

I am not sure how an analyst can have a "Buy" recommendation on a business facing these kinds of headwinds.

A builder can only shrink the size of a house so much before what he is selling is not much more than a garage.

Again, in an environment where the cost to construct a house is more than the sale price, the more the builder delivers, the greater the losses.

Keep on building......every builder admits that there is too much inventory on the market.....let's see how low everyone's home prices can go as these guys give themselves millions in bonuses!!!!

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