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robbinhood69 t1_j22r3ot wrote

Look from 2006 to 2009 TOL fell from 60 to 15.

During march 2020 TOL fell from 45 to 15. As a society we are scarred by the GFC and any time it seems like shit might get rocky everyone gets mega bearish on housing and mega bearish on builders.

i'm mega long all of these shits for this reason, RE bulls are delusional af and loss averse af. THey will refuse to sell for a loss. How is this good for builder ? For one, it ices the home flipper lottery...home flippers are kinda price insensitive in a mania and will bid up contractors, equipment, materials. Look at lumber, price way downies. Contractors are now hungry for work. Etc. margins are expanding for builders. Home flippers are gonna hold the bag for years rather than take the L and move on with life. Not only that, but who is gonna buy from a flipper when they could just buy a brand new home from one of these builder for a 5% discount off median or whatever

Btw BLDR bought back literal 10% of their float in the last fucking quarter and has a forward p/e of like 4

backlogs of a year broadly throughout the market idk literal GFC is already priced in, as long as Jerome doesn't use his tool too hard i don't see how i lose money on this

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zippynj t1_j247k1q wrote

Margins are not expanding for builders though I can confirm this statement

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robbinhood69 t1_j24t1z9 wrote

Maybe expanding is a strong word, but their costs have cratered I mean lumber is down a bajillion %

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zippynj t1_j24u25m wrote

You understand that all lumber purchased is from 3-6 months ago not what the current "rate" is right? All the homes built right now are still part of the inflated costs. Only homes delivered in Q3/4 23' will see reflected lumber margin discounts which will be offset by drastically reduced home sales prices

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robbinhood69 t1_j24us4r wrote

look if you wanna pull up a financial statement from a builder that shows margin compression please do

i haven't seen it yet and ur kind of proving my point

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zippynj t1_j24vqic wrote

I'm not proving your point what so ever. I don't lose sleep on people not believing what I live day to day. I'm just stating the facts from the northeast region. I really don't give a shit what your thoughts are if you believe me. Sales are down 30% month over month. Monthly cancelations are over 15-17% where normal was 5 Home prices are reducing by 5% cutting into margins As they continue to decrease to meet sales goals. Well. Do the math. A 20k lumber reduction on a house doesn't cover the margin loss with sales price and PSF cost

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BallsOutNinja t1_j26tb89 wrote

LEN just reported lower than expected margins on the last earnings.

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zippynj t1_j277jdh wrote

Yes I was on earnings call a month ago

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robbinhood69 t1_j27p0p9 wrote

fwiw LEN is diff demo lower cost housing, TOL average sale is 1mil, i'm bullish TOL KBH BLDR LPX BXC PGTI

i know i'm moving goalposts here a bit but i've said this in other comments, higher end homebuilder r diff

Homebuilder that are localized like the shit ackmans in that serves phoenix vegas texas is fucked

lower end possibly fucked idk i haven't really looked into it

EDIT : lower end of econ is getting fucked in a much diff way than higher end rn blah blah i know i'm shifting goalposts a bit here

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BallsOutNinja t1_j28v9jw wrote

I do not totally disagree with this, for now, higher end builders seem to have more demand at this time. However that could change.

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