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Doesn't Take Much To Get Homebuilders Confident These Days

Tyler Durden's picture




 

The National Association of Home Builders just released it latest monthly housing market index, which rose from 35 to 37. As headlines proudly blast, this is the highest level of confidence since February 2007. The NAHB chairman was positively giddy: "From the builder’s perspective, current sales conditions, sales prospects for the next six months and traffic of prospective buyers are all better than they have been in more than five years,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “While there is still much room for improvement, we have come a long way from the depths of the recession and the outlook appears to be brightening." Sadly, as the chart below proves, it doesn't take much to get the NAHB confident these days. We present the fudge free data on housing completions: not starts, not permits, completions, which is what you get on the other side of the homebuilding process once all i and t's have been dotted and crossed, because one can fudge both the start and permit metric more than Bank of Spain's X-13-ARIMA seasonal "models" can make MS' IPO track record successful. We leave it up to readers to decide just what homebuilders are so very confident about. Residual record hopium sloshing in the system notwithstanding.

The red arrows show the same level of confidence, at least as reported by the NAHB.

Chart source: St Louis Fred

 

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Wed, 08/15/2012 - 10:30 | 2706657 SmoothCoolSmoke
SmoothCoolSmoke's picture

Just more lies to fill pockets.  The USA, home of the brave and land of ME, ME, ME.

Wed, 08/15/2012 - 10:33 | 2706665 SilverTree
SilverTree's picture

I will buy a home when there is blood in the streets; until then I rent.

Wed, 08/15/2012 - 10:43 | 2706701 markar
markar's picture

IOW when the govt is out of the housing market and mortgage rates are 8-10% w/20% down. Prices should be about 30% lower at that point.

Wed, 08/15/2012 - 10:45 | 2706712 aint no fortuna...
aint no fortunate son's picture

I'm gonna buy a home when Larry Yun joins the editorial staff of ZH

Wed, 08/15/2012 - 10:53 | 2706736 Jay Gould Esq.
Jay Gould Esq.'s picture

Larry would be much more at home with Blodget & Crew over at Business Insider.

For some, the level of factual objectivity on ZH is cause for considerable discomfort.

Wed, 08/15/2012 - 11:07 | 2706761 The Big Ching-aso
The Big Ching-aso's picture

 

 

"In the end fudged data always look shitty."

Neoconfucius

Wed, 08/15/2012 - 10:47 | 2706715 Buckaroo Banzai
Buckaroo Banzai's picture

"I been down so long, it looks like up to me"

Wed, 08/15/2012 - 12:52 | 2707118 aint no fortuna...
aint no fortunate son's picture

Gnossos Pappadopoulis would be right at home here

Wed, 08/15/2012 - 11:45 | 2706883 Curt W
Curt W's picture

when there is blood in the streets, I will not be buying a home.

I will take one, find a vacant home, move in, and defend it from all comers.

Wed, 08/15/2012 - 12:01 | 2706926 pashley1411
pashley1411's picture

It feels very weird to have exited the housing market in 2004, and to have rented for this amount of time.

On the other hand, I still have all my hair.

Wed, 08/15/2012 - 17:02 | 2708242 FreeNewEnergy
FreeNewEnergy's picture

I will own my home free and clear until there is blood on my lawn (from shooting zombies after my food or tobacco); until then I rant and rave over the utter stupidity of renting in almost any situation, including the current mess.

People like SilverTree are concerned about taxes, I guess, eating away at their income. But, renting gets you only a temporary place to live, not anything permanent that you can fix to your contentment.

Of course, people like this are probably looking at putting down 20% or less and having a big mortgage payment every month, so, maybe renting is the correct route for them.

My conviction has always been that if you can't reasonably pay it off in five years or less, then it isn't for you. If everyone resisted the banking urge for longer and longer mortgage maturities, we might actually have a rational and affordable real estate market.

In all seriousness, unless you wish to live in a mansion well beyond your means, housing should account for no more than 25% of your NET income (that's take home pay for you working stiffs).

Wed, 08/15/2012 - 10:35 | 2706672 surf0766
surf0766's picture

And which generation is the ME generation....

Wed, 08/15/2012 - 10:38 | 2706687 DeadFred
DeadFred's picture

I think this is just an extension of the hammer-method of mood improvement. If your mood is down start banging your head with a hammer. When you stop you'll say "I'm feeling much better now" Neuroscience shows that happiness is purely relative.

Wed, 08/15/2012 - 10:31 | 2706660 diogeneslaertius
diogeneslaertius's picture

PURE UNADULTERATED HOPIUM GLYCOL

Wed, 08/15/2012 - 12:26 | 2707002 Larry Dallas
Larry Dallas's picture

The title of this article reminds me of a line from 48 Hours with Eddie Murphy and Nick Nolte:

"my dick gets hard when the wind blows". Same can be said for homebuilders and Realtors. Anything will...

Wed, 08/15/2012 - 10:32 | 2706663 Cursive
Cursive's picture

Well, it IS a confidence game, so they will always appear confident.

Wed, 08/15/2012 - 11:25 | 2706832 defn8Dog
defn8Dog's picture

Robert Toll sold $71.5 million shares in July. In 2005 he sold $134 million from Feb thru July.  Guess what happened next.

Wed, 08/15/2012 - 10:33 | 2706664 fightthepower
fightthepower's picture

Lots of houses being built, none sold in my area.

Wed, 08/15/2012 - 10:37 | 2706679 Cognitive Dissonance
Cognitive Dissonance's picture

I like to vary my route from day to day just to see what's going on around town. The other day I drove past a development which had been abandoned half way through construction with nearly the entire project unsold.

Yet a quarter mile down the road a brand new development has been started with new homes sprouting everywhere like green shoots. And of course the builder has a big ass sign out front promising 100% financing with no closing costs at historic low interest rates.

Of course! The old con is still the best con.

Wed, 08/15/2012 - 10:50 | 2706730 fightthepower
fightthepower's picture

What city?

Wed, 08/15/2012 - 11:02 | 2706760 Cognitive Dissonance
Cognitive Dissonance's picture

Suburb of DC.

Of course........the belly of the beast always takes care of its hungry minions.

Wed, 08/15/2012 - 11:42 | 2706867 catacl1sm
catacl1sm's picture

I live in the Northern Virginia area, and this area is insulated from the overall recession due to the large number of government, or government funded (contractors) jobs in the area.

Wed, 08/15/2012 - 12:23 | 2706990 Cognitive Dissonance
Cognitive Dissonance's picture

That is precisely why it is so difficult talking to people around here about what's really going on. Hard to convince a person of "B" when they are paid to believe "A". 

Between the huge pool of federal government employees, all the military personnel, the vast array of military contractors and subs, the staggering amount of (Army/Navy/Marine/Air Force) base civilian employees and all the various supporting structures that are arrayed underneath all this, the DC area, particularly the suburbs (N. VA is for all practical purposes a [financial] suburb of DC.....as is any area within 50 miles of DC) have not really felt hard times.

Isolation from reality is a wonderful thing right up until withdrawal begins.

Wed, 08/15/2012 - 14:03 | 2707417 Lednbrass
Lednbrass's picture

Virginia is the larget net receiver of Federal money in the country (+78 billion as of 2010) and Maryland is also high on the list, when the Federal government has to scale back one day both of those states are going to get creamed when that bubble pops. Northern VA and southern MD are going to have serious junky withdrawal.

Wed, 08/15/2012 - 12:15 | 2706955 smlbizman
smlbizman's picture

im in balt. cnty md. middle river area...i have at least 6 housing projects within a 1 mile radius...4 on my street that is no more than 2 miles long....1 development is from the hay days with 4 out of 60 homes built...the rest all started within the past 12 mos....i know the county has had to sell their soul to the devil because i cant imagine anyone risking their own capitol to build all these developments...and this as my lovely state has just been named # 1 in forclosures in the nation...i have not been this proud since our city was #1 in std's....

Wed, 08/15/2012 - 12:37 | 2707020 Cognitive Dissonance
Cognitive Dissonance's picture

It's going to require electro shock therapy directly to the nation's genitals to wake this nation up. Any day now.

Charging..........CLEAR!

Wham!

Wed, 08/15/2012 - 13:59 | 2707395 Lednbrass
Lednbrass's picture

I know your area well and have a friend who lives there.  When I visited the area last and saw all the new construction i couldn't figure out if they were actually going to be able to sell them or those were Section 8 for another "Move to Opportunity" program.

If you are from Baltimore (Edmondson Heights-Woodlawn originally here) you can only say "Well, at least it isn't Detroit...yet."

Got out of that state and only return when I have to visit older family, don't miss it for a second.

 

Wed, 08/15/2012 - 15:03 | 2707676 smlbizman
smlbizman's picture

i hear you loud and clear....and we will be leaving this shit hole in the next 2 years....its ashame you wont be here when the implement the "stop sign" cameras...they are in the works..

Wed, 08/15/2012 - 10:33 | 2706666 Cognitive Dissonance
Cognitive Dissonance's picture

Even the slightest prospect of getting laid gets the horn dog homebuilders all excited.

Is that a new building permit in your pocket or are you just happy to see me?

Wed, 08/15/2012 - 10:35 | 2706674 Spastica Rex
Spastica Rex's picture

http://www.youtube.com/watch?v=WoaktW-Lu38

I found it very funny that they had Eric Idle do this at the Olympics.

Wed, 08/15/2012 - 10:35 | 2706675 hugovanderbubble
hugovanderbubble's picture

Lennar is a fraud

BZH is a short

 

 

Wed, 08/15/2012 - 10:37 | 2706677 ptoemmes
ptoemmes's picture

Shakes head and starts drinking earlier than usual...

http://www.cnbc.com/id/48671362

... Applications for U.S. home mortgages tumbled last week, with demand for new loans down for the fifth week in a row as interest rates held steady, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 4.5 percent in the week ended Aug 10. The gauge of loan requests for home purchases, a leading indicator of home sales, dropped 2.0 percent. .....

Wed, 08/15/2012 - 10:37 | 2706680 mrktwtch2
mrktwtch2's picture

not sure about housing my woman (who is 49) ..just made the last payment on her townhouse and is glad she doesnt have to come up with 1100 a month anymore..

Wed, 08/15/2012 - 10:45 | 2706710 Alpha Monkey
Alpha Monkey's picture

I have heard that the lack of the mortgage tax break, will make up for those missing payments.  Can anyone else attest to this?

Wed, 08/15/2012 - 11:22 | 2706827 sdmjake
sdmjake's picture

Hmmm...Do you think it is better to keep paying a banker interest for the rest of your life so you can get a break on what your paying a government for the rest of your life OR do you think it is better to stop paying interest to the banker, then give some of your old 'banker payment' to a charity in your community [thereby getting the same "break" on the taxes] and put the rest of those payments back in your pocket? Do I need a 'sarc' tag here...if you think the mortgage tax break is the reason to keep a mortgage you are too stupid to ever get out from under the thumb of the man. Just sayin...

Wed, 08/15/2012 - 14:33 | 2707532 Alpha Monkey
Alpha Monkey's picture

Obviously you are reading too much into my text.  I can't blame you though, seems like you peeps revel in trying to prove how smart you are.   

My words were actually meant as A) an inquiry from other people who have been stupid enough to make a ginormous leveraged "investment" on a home (this group does not include me) and B) as a word of caution about things I have heard from other home renters (I use renters because even after it's paid off, you still owe property taxes... for life) who have been able to transfer their rent from the bank to the state.

I don't think hardly any reasons are enough for me to get a mortgage, and I probably never will.  I'll keep saving, and waiting for house prices to become reasonable enough to purchase outright.

If you don't understand what I'm saying, I suggest you ask a question, instead of ASSuming.  Otherwise, go fuck your self you smug bitch.  There is no sarcasm in my text.

Also, I live in the black market...

Wed, 08/15/2012 - 15:15 | 2707750 sdmjake
sdmjake's picture

AlphaMonk, apologize for implied smugness...but i can't tell you how many people tell me about the 'value of the mortgage deduction' that don't grasp that they are paying INTEREST ON A LOAN. (BTW,a loan that has its interest front loaded) Paying off a mortgage even a little early will save you a shitload of money in the long run. Of note, a loan is not necessarily a bad thing. Not many folks i know of walkin around that can just write a check for a house after all. Assuming its affordable & an 'honorable' contract, getting a mortgage is fine. But as my grandma used to say, "Don't owe nobody nothin". Those are smart words born out of a tough life long before things like credit cards. So i get frustrated when people say that they should keep making usurious payments to bankers so they can get a morsel of deduction on their annual tax reaming. So i suppose in answer to your question it is my belief/experience that the lack of deduction is not as painful as the payment of principal and interest.

{And I would only add that viewing the 'mortgage payment' & 'taxes due' equally as "rent" is not that right way to look at it. Yeah, the mortgage payment is like rent. However - taxes are taxes. None of us wants to pay too much tax but i view some tax as a simple collaborative effort to share necessary costs in a community. Basic Safety is a good example of something we all want and would chip in for. Obviously I don't want to pay tax for wasteful sh*t like $120k/yr tea-tasters [or worse sh*t like the DoE].}

 

Wed, 08/15/2012 - 11:28 | 2706838 NotApplicable
NotApplicable's picture

LOL, don't know why people would junk an honest inquiry.

First off, the deduction is on interest paid, so over the last few years you're not getting much of a benefit anyway. Also, the standard deduction is high enough now that it takes a sizable mortgage to even benefit from itemizing.

So, I'd say the idea is incorrect.

Wed, 08/15/2012 - 14:34 | 2707535 Alpha Monkey
Alpha Monkey's picture

Thank you for the useful information.

Wed, 08/15/2012 - 10:40 | 2706693 Colonel
Colonel's picture

The Chinese have been doing this for awhile. Ghost subdivisions bitchez!

Wed, 08/15/2012 - 10:42 | 2706697 Jason T
Jason T's picture

the new normal.. like going from making $25 an hour to $7.50 and then getting a 50 cents an hour raise and feeling good again.

Wed, 08/15/2012 - 11:43 | 2706875 catacl1sm
catacl1sm's picture

Anybody that goes from $25/hr to $7.50/hr is a shameless idiot. At $25/hr, you must have been doing something skilled. Put that skill to use as a 1099 or self-employed. Hell, look for project jobs on e-lance. Dumb fuckers.

Wed, 08/15/2012 - 10:42 | 2706699 asteroids
asteroids's picture

ANY graph or datapoint from the NAHB, FRED or other jokers should be taken with a large grain of salt. Remember, there is no penaly for lying, and we have seen repeated example from banksters and politicians that they WILL lie when it suits them. What a sad world we live in.

Wed, 08/15/2012 - 10:47 | 2706707 adr
adr's picture

Considering the idiotic rally in homebuilder stocks, I'd be giddy too if I could just grant myself a few thousand shares every few weeks. Why even build homes, Lennar can make more cash for executives selling stock than they ever could selling completed buildings.

Lennar, $3.75 to $30 in three years with the lowest level of home construction in decades.

Another Mark to Myth bubble stock.

Wed, 08/15/2012 - 10:45 | 2706709 hangemhigh77
hangemhigh77's picture

I haven't seen a construction vehicle parked at a diner in my area, mid-hudson region, in 5 years.  

Wed, 08/15/2012 - 10:57 | 2706734 SheepDog-One
SheepDog-One's picture

Yep, theres absolutely no building going on here at all, all you see is some remodelers and renovators out there but no construction crews at all. Huge lies going on...all these clowns can talk about is 'building' when we already have block after block of buildings and houses sitting empty.

Wed, 08/15/2012 - 11:32 | 2706848 NotApplicable
NotApplicable's picture

The only construction I see are schools, hospitals, government property and car lots. In other words, entities that can depends on Uncle Sugar for funding.

Wed, 08/15/2012 - 11:45 | 2706884 catacl1sm
catacl1sm's picture

My area has a schooling crisis. We still can't build schools fast enough. We do have the advantage of the BRAC pushing a lot of military into the area beacuse of Fort Belvoir.

Wed, 08/15/2012 - 10:48 | 2706717 Arnold Ziffel
Arnold Ziffel's picture

Zero down houses are still being handed out like candy to people who can not afford the mortgage. Kicking the can further down the road. That's why they are giddy. When you can build and pass those mortgages on to the FHA (aka taxpayers) why not ?

 

House prices will not recover for decades.

Wed, 08/15/2012 - 10:54 | 2706739 SheepDog-One
SheepDog-One's picture

'Recover' to where, the top of the ridiculous real estate bubble? 

Wed, 08/15/2012 - 11:01 | 2706758 Arnold Ziffel
Arnold Ziffel's picture

Good point, sheepdog.

Wed, 08/15/2012 - 11:58 | 2706918 Totentänzerlied
Totentänzerlied's picture

Real estate has been in recovery for the past 4-5 years. Keynesians like to forget that "recovery" doesn't always correspond to "nominal price increase". Normal was never real.

Wed, 08/15/2012 - 11:07 | 2706783 CvlDobd
CvlDobd's picture

The dude who bought my house last month told me he wiped out his checking, savings, and maxed his credit card cash advance to scrape together the down payment. His wife is way out of his league so I kind of understand his motive, but damn! He better hope nothing ever unexpected comes up in the next few years.

Wed, 08/15/2012 - 17:19 | 2708289 FreeNewEnergy
FreeNewEnergy's picture

House prices will not recover for decades.

I'll drink to that.

Shhh... I'm on my third Black IPA already. Nothing like owning your own place, having halfway decent neighbors who don't bother you much and getting snookered every night as the world burns.

I'm actually looking at some raw land for farming. I don't expect to make a killing, but growing stuff from seeds is fun and people gotta eat. Since my back yard is less than 1/5th of an acre, this unbelievably cheap 15 acre lot is looking good.

 

BTW: That chart, with the red arrows, is the funniest thing I've seen in months. Kudos to ZH.

Wed, 08/15/2012 - 10:49 | 2706722 Dr. Engali
Dr. Engali's picture

Home builders are confident that the media will carry the water for them and not report the truth.

Wed, 08/15/2012 - 10:50 | 2706727 apberusdisvet
apberusdisvet's picture

The biggest detriment to foreclosed home sales is a factor that is never examined; the  title policy for the buyer.  Lenders are refusing to offer title indemnification, saying that it is the buyer's sole responsibility.  The Rule of Real Estate Law is now irretrievably broken.  How many really understand that the MERS fraud was totally planned from the getgo?  Not only to screw the Counties out of fee and registration revenue but mostly to obscure actual title  for MBS tranches and allow for multiple sales of the same property.

Wed, 08/15/2012 - 11:11 | 2706794 Arnold Ziffel
Arnold Ziffel's picture

I read awhile back that a large sample of closings from 2004 to 2008 showed over 80% had 'title defects.' These will come back to bite many people who try to sell in 5-10 years and find they have a legal problem if the buyer looks close enough (or has a lawyer look over the chain of title and sees the defect).

Funny thing is so-called "Title Insurance" does not cover many of these defects. I know; it cost me $78,000 in legal fees to clear my title when I tired to sell 4 years later and the meticulous buyer's lawyer discovered a can of worms.

"Buyer Beware" is all I can say if you are crazy anough to buy in this collapsing/correcting housing market. It's like the proverbial, "catching a falling knife."

Wed, 08/15/2012 - 11:19 | 2706816 Raymond Reason
Raymond Reason's picture

Title insurance used to be bullet-proof.  No doubt since Mortgagegate, the policies have been re-written by crafty lawyers. 

Wed, 08/15/2012 - 20:05 | 2708758 Papasmurf
Papasmurf's picture

title insurance covers search mistakes that should have been discoverable. It does not cover concealed fraud.

Wed, 08/15/2012 - 10:50 | 2706728 Poundsand
Poundsand's picture

As a builder I know what a lot of guys are doing.  The ones who haven't closed up shop and gone bankrupt and who still have some cash left are watching it get eaten away month after month.  It's like sitting at the final table and watching the blinds climb, while sitting with the short stack.  Pretty soon you will play any cards because you can do the math and see where waiting for the good cards will get you.

So you are seeing a spurt in building as they are going to try the one thing that got them there in the first place, they are going to build something.  Unfortunately they are using their own cash this time, and the math just doesn't lie.  You can buy used cheaper than you can build new.  Who knows, some might get lucky and sell, but most won't. 

Being in the business, try and get a construction loan right now.  Impossible.

 

Wed, 08/15/2012 - 11:15 | 2706804 Raymond Reason
Raymond Reason's picture

And yet people are still buying new homes, although the price per sq/ft can be 50% higher than an existing home.  Somehow they are still getting in with zero, or very little down.

Wed, 08/15/2012 - 11:15 | 2706806 Savvy
Savvy's picture

Gov. has destroyed construction here in B.C., added sales tax on new home purchase. Banks love it, tack another $20k onto the mortgage. Surreal. 

Wed, 08/15/2012 - 12:05 | 2706935 owensdrillin
owensdrillin's picture

Yeah everyone here keeps talking about the Canadian real estate bubble. Well where I live the prices have been falling for the past three years and are now down about 35% from the 2007 highs. We are no different than the cities across the border which are within a couple of hours drive.

The only place in British Columbia that has risen is Vancouver and it has stalled out over the past two months. The rest of B.C. has been following the US market pretty much step for step. There are only a couple of markets in Canada that are still in bubble territory and they are ending. Three or four cities does not make an entire country a bubble.

Wed, 08/15/2012 - 11:38 | 2706860 NotApplicable
NotApplicable's picture

If you're any good at repairing cracked basements, just head to the nearest drought area. The contractors here aren't able to keep up with demand at the moment.

Unfortunately, most of this repair is not covered by insurance, from what I hear.

Wed, 08/15/2012 - 10:55 | 2706733 buzzsaw99
buzzsaw99's picture

hat tip to calculated risk:

http://2.bp.blogspot.com/-w48qEF3CdAg/UCusfhFq61I/AAAAAAAAPUg/jeRikt9L49...

looks like hopium, smells like hopium

Wed, 08/15/2012 - 10:56 | 2706745 Ted Baker
Ted Baker's picture

FACT 12:- THE HOUSING MARKET STILL CRASHED AND WILL CONTINUE CRASHED FOR THE NEXT 10 YEARS AS NO END TO THE SOLUTION SEEMED TO HAVE FOUND A STRONG FOOTING...THE REST IS ALL LIKE MAKING A CHOCOLATE CAKE AND FUDGING IT UNTIL THE DOUGH GETS EXTREMELLY THICK UNTIL IT BURST...TIME TO SELL HOUSING STOCKS - WHERE IS WARRREN?

Wed, 08/15/2012 - 10:59 | 2706750 Colonel
Colonel's picture

"The misallocation of resources means that businesses(and home builders) commit wide spread errors because they react to false signals(like X-12/13-ARIMA seasonal adjustments). So long as the central bank continues to play with the interest rate structure, it will always help bring about a misallocation of resources" - http://mises.org/daily/104

Check.

Wed, 08/15/2012 - 11:41 | 2706866 NotApplicable
NotApplicable's picture

MSM interpretation.

The misallocation of resources means that businesses(and home builders) commit wide spread errors because they react to false signals(like X-12/13-ARIMA seasonal adjustments). So long as the central bank continues to play with the interest rate structure, it will always help bring about a misallocation of resources

Wed, 08/15/2012 - 11:01 | 2706759 Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

Aproximately flat over the last 2 years and 40% lower than the lowest points between 1970 and 2000.  Must be some new definition of confident that I'm unaware of.

Wed, 08/15/2012 - 11:03 | 2706765 Snakeeyes
Snakeeyes's picture

That is mostly multifamily, not single family. SF mortgage purchase apps 

STILL in a rut!

http://confoundedinterest.wordpress.com/2012/08/15/mortgage-applications-fall-4-5-purchase-applications-still-in-a-rut/

Wed, 08/15/2012 - 11:08 | 2706787 Cangaroo.TNT
Cangaroo.TNT's picture

Tyler,

I'm in the construction industry.  One of our divisions furnished basement beams to home builders.  Back in the day, a LOT of our customers were independent home builders that would build only 1, 2, or 3 homes at a time.  Since the housing bubble burst, most of those guys went to work swinging a hammer for someone else.  Additionally, many, many of our customers were the homeowners.  They're obviously one-offs.  So, it's not surprising that the survey is skewed to the point of irrelevance.

Wed, 08/15/2012 - 11:12 | 2706796 SheepDog-One
SheepDog-One's picture

'Building' is the magical manna from heaven? Why is that? This 'forced growth' stuff is suicide.

Wed, 08/15/2012 - 11:27 | 2706820 Colonel
Colonel's picture

It's the homebuilder twist on the Field of Dreams idea. "Build it and finance with zero down loans and they will come?"

Wed, 08/15/2012 - 11:21 | 2706823 Cangaroo.TNT
Cangaroo.TNT's picture

I agree, and I'm in the industry.  The problem is, like in many other areas, there is way too much capacity.  On a small, local project it's not uncommon to bid against the largest fabricators in the country simply because there is not enough work in the country to fill their shops.  We use 5% mark-up on material and bought items, and we're routinely getting beat by 30%.  That means we're getting beat on the labor, which means the workers are getting pinched.  I'd rather pay my guys well AND make a decent living than make a decent living while forcing my guys into poverty.

Thu, 08/16/2012 - 00:26 | 2709287 StychoKiller
StychoKiller's picture

Remodeling and home improvement(s) will still be in demand...

Wed, 08/15/2012 - 11:22 | 2706824 haskelslocal
haskelslocal's picture

We know what the confidence is. For those of us who have worked for a rah rah corporation, it doesn't matter at all about the facts. You are told to go out and sell. When you report prospects, you dare not ever come back and say you've got none. You say the pipeline is full!

It all becomes a mirage to get paid. Even Barry Rutenberg of the NAHB says that "the outlook appears to be brightening." From the bottom I'm sure it looks better.

All of this is from the philosophy that if you just put it out there in the universe, it's more likely to come true.

Wed, 08/15/2012 - 11:43 | 2706874 NotApplicable
NotApplicable's picture

We pretend to work, they pretend to pay us.

Wed, 08/15/2012 - 11:23 | 2706828 Hal n back
Hal n back's picture

You have to admire the homebuilders for Positive Mental Attitude-without that you might as well close up shop. PMA however, does not pay the bills, yet for the salesforce in the field its absolutely needed, just like car salesmen need it. (at least the car salemen not working for government motors).

 

Wed, 08/15/2012 - 11:42 | 2706870 NotApplicable
NotApplicable's picture

One man's PMA is another's Hopium.

YMMV

Wed, 08/15/2012 - 11:36 | 2706858 Cultural Capital
Cultural Capital's picture

Ya'll better start buying some put options on some of the larger construction companies.  Hello Black Swan:

http://www.youtube.com/watch?v=JdbJP8Gxqog

Wed, 08/15/2012 - 12:02 | 2706929 dirtbagger
dirtbagger's picture

Chart is entirely logical,   With the large shadow inventory of distressed homes there is reduced demand for new homes, particularly when new homes sell for a premium relative to distressed homes.    A better predictive chart of the houring marked direction is trending data in distressed home inventory.

Wed, 08/15/2012 - 12:05 | 2706932 Dareconomics
Dareconomics's picture

There actually is good news in this chart. Completed houses are running at all time lows. The US was completing about 1mm houses a year during the previous troughs in 1990 and 1982. The country has been hovering around 600k units since the financial crisis, and the country is much more populous than it was 20 and 30 years ago.

We may not have entered a recovery, but these low rates show that we have hit a bottom. When we hit a recovery, I cannot say. 

http://dareconomics.wordpress.com/

Wed, 08/15/2012 - 12:10 | 2706942 Your Creator
Your Creator's picture

Where is the media.  Why aren't they attacking obama for pitiful economic numbers.   Where are the big yaps now.   Where are Diixie shits, where os greengay, code pink and all of the other losers with the big flapping gums. when Bush was in and had unemployment at 5.1%   The leftist politicians spent all the money on themselves and friends and had no money left over for infrastructure. Where are the leftist big yaps now in the entertaniment industry.    I see yahoo puttin hit pieces on perry but no hit pieces on obama.  Same goes for abc nbc cnn and bloomberg.  No hit pieces on obama or any vetting of any kind.  Clear all the communist syncophants out of the lamestream news centers then  truth may be born again.  Communist propaganda stations all of them.

Wed, 08/15/2012 - 16:06 | 2708030 RockyRacoon
RockyRacoon's picture

Of course!  Everything was so rosy before Obama. 

Your propensity to confuse correlation with causation displays a cramped mental state.

Wed, 08/15/2012 - 12:17 | 2706960 Dingleberry
Dingleberry's picture

Just another reason to know that interest rates ain't going anywhere for awhile.......God help the RE market when rates go back to reality.

Wed, 08/15/2012 - 12:31 | 2707023 Oldwood
Oldwood's picture

There are only two types of survivors in this. One is the really big players that have access to their own line of mortgage financing. The other is the bottom feeders using every trick in the book to shortcut and cheap out the work. Small and medium size businesses are being eaten alive.

Wed, 08/15/2012 - 13:30 | 2707271 Cycle
Cycle's picture

Watching homebuilders having orgasms over what is statistical noise, from likely munged time series is amusing.  What is not amusing is the fact that the Federal (I almost wrote 'Venereal Reserve Bank'  by mistake) Reserve bank of the United States has removed enough information from the markets by its constant politically and crony bribe motivated interference so that the misallocation of resources continues. eg Homebuilding. You've gotta be kidding.  Adding to empty home inventory? It's not even a capital investment - it's a dead end depreciating POS.... 

Wed, 08/15/2012 - 15:12 | 2707733 One World Mafia
One World Mafia's picture

Many phony stats will be cited as the reason Obama skates to a November win, but electronic vote switching will be the real reason.

Wed, 08/15/2012 - 17:32 | 2708329 FreeNewEnergy
FreeNewEnergy's picture

Many phony stats will be cited as the reason Romney skims to a November win, but electronic vote switching will be the real reason.

Fixed it for ya.

Withdraw consent. The. Only. Answer.

Wed, 08/15/2012 - 15:45 | 2707922 spanish inquisition
spanish inquisition's picture

Looks like the cat is still bouncing, getting ready to roll off the curb.

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