Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@netside.net>
Subject: OT - Quality of home construction (was Re: [CANSLIM] Worley's Weekend - New home sales)
Date: Sat, 22 Dec 2001 17:26:05 -0500
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This is a multi-part message in MIME format. - ------=_NextPart_000_002F_01C18B0D.BCAD6340 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Bill, I must heartily agree with you, without offense to Katherine or = any others in the group in this industry. I bought a new home in 1973 (townhouse, VA), and existing homes in 1976 = (CA), 1979 (MI), 1983 (Miami, actually a liveaboard sailboat), and 1987 = (also Miami). The best built of all of them is my present home built in = 1951, before there was much in the way of building codes. The next best = was the sailboat built 1973, before boat builders had developed = fiberglass construction fully (so they over built). My present home has = roof beams of long grain Florida pine, no knotholes, built and assembled = on site, with hurricane straps on every single beam (current code calls = for a strap on every third beam, and most beams are 2X6 preassembled = rather than the 2X10 beams that I have. After the Cuban Mariel migration in the early 80s, thousands of new = homes were thrown up in this area to accommodate all the new arrivals. = We saw the disaster of that action when Hurricane Andrew hit in 1992. = When my home was built, the contractor essentially relied on his = professionalism on the standards to follow. Now, they seem to only meet = the minimum requirements of building codes in order to stay competitive = and cost efficient. But despite all this, there is still a demand for housing that outstrips = existing homes up for sale. Many first time buyers have not yet (just as = was my case) discovered the charm and value of buying an existing home = over a brand spanking new one. Because of this, if new home sales = continues strong in 2002, I would also expect to see the housing permits = and starts also remain strong. The home builders group therefore would = benefit. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Bill Triffet=20 To: canslim@lists.xmission.com=20 Sent: Saturday, December 22, 2001 2:40 PM Subject: Re: [CANSLIM] Worley's Weekend - New home sales Hope this doesn't go too far off topic but... I would think there are other factors affecting home builders. A big = one for many is driving distance. In the most populated areas of the country "affordable" housing in generally built on the outskirts. Here in Los Angeles, that means a 50-60 mile commute. Most folks here buy existing = homes (as I just did 3 months ago). On a personal note: I consider most new homes to be quite inferior in regards to construction compared to the older ones (no disregard for = your families business btw). My last house was built in the 40's. It = withstood every earthquake since then. My "new" home was built in the 50's. Same situation. Plus, the big feature - character. My main point is that existing home sales may have a larger impact on = the economy just by the shear volume. I will still need (need???) new = furniture, paint, carpet, and lets not forget my new financing I did as well. Add = to that, I sold my last house to someone coming from an apartment so = there lies more economic stimulus as well. Besides, I don't think homebuilders = were a good indicator of the 90's bull market. -Bill Triffet ----- Original Message ----- From: "Katherine Malm" <kmalm@earthlink.net> To: <canslim@lists.xmission.com> Sent: Saturday, December 22, 2001 10:02 AM Subject: Re: [CANSLIM] Worley's Weekend Weeview Hello Tom, At last, I am compelled to comment on your excellent WWW... The normal figure bandied about on spending related to new home = purchases is 6 to 1. If I spend $100K on a new home, these dollars will recirculate = 6 times into the economy. (Wonder how many times your pentium purchase recirculates?!) So, seeing a marked downturn in the home figures would really worry the economists. Greenspan, in particular, focuses on this = and was quite worried when long term rates remained sticky, despite the = lowering of short term rates. I still see the strength in recent home sales reflecting the "hurry up and get it done before the rates go up again syndrome." In Austin, for example, the homebuilders have been in = aggressive selling mode for quite some time. Every day, the deal is sweetened. = $10,000 in extras! First two years financing at 4%! Cash at close to cover = your moving expenses! Free maid for life! (Well, I made that one up.) = Bigger homebuilders make most of their money not on the home, but on the = financing. If they are having to lower mortgage rates to lure the customer, their margins are going to be squeezed going forward. That means in the = coming year, the homebuilders will have more difficult Q over Q or Y over Y comparisons. Also, my own family owns a construction business, so I = have seen these cycles first hand. You are right that the consumer seems = willing to take on the additional debt and I think that, along with other = economic indicators, says that the economy is far from plunging into the = depths. But these things don't necessarily translate into good equity investments. Happy Holidays, Katherine - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_002F_01C18B0D.BCAD6340 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META content=3D"text/html; charset=3Diso-8859-1" = http-equiv=3DContent-Type> <META content=3D"MSHTML 5.00.2314.1000" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT size=3D2>Bill, I must heartily agree with you, without = offense to=20 Katherine or any others in the group in this industry.</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>I bought a new home in 1973 (townhouse, VA), and = existing=20 homes in 1976 (CA), 1979 (MI), 1983 (Miami, actually a liveaboard = sailboat), and=20 1987 (also Miami). The best built of all of them is my present home = built in=20 1951, before there was much in the way of building codes. The next best = was the=20 sailboat built 1973, before boat builders had developed fiberglass = construction=20 fully (so they over built). My present home has roof beams of long grain = Florida=20 pine, no knotholes, built and assembled on site, with hurricane straps = on every=20 single beam (current code calls for a strap on every third beam, and = most beams=20 are 2X6 preassembled rather than the 2X10 beams that I = have.</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>After the Cuban Mariel migration in the early 80s, = thousands=20 of new homes were thrown up in this area to accommodate all the new = arrivals. We=20 saw the disaster of that action when Hurricane Andrew hit in 1992. When = my home=20 was built, the contractor essentially relied on his professionalism on = the=20 standards to follow. Now, they seem to only meet the minimum = requirements of=20 building codes in order to stay competitive and cost = efficient.</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>But despite all this, there is still a demand for = housing that=20 outstrips existing homes up for sale. Many first time buyers have not = yet (just=20 as was my case) discovered the charm and value of buying an existing = home over a=20 brand spanking new one. Because of this, if new home sales continues = strong in=20 2002, I would also expect to see the housing permits and starts also = remain=20 strong. The home builders group therefore would benefit.</FONT></DIV> <DIV> </DIV> <DIV>Tom Worley<BR><A=20 href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20 TexWorley<BR></DIV> <BLOCKQUOTE=20 style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: = 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px"> <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A href=3D"mailto:btriffet@earthlink.net" = title=3Dbtriffet@earthlink.net>Bill=20 Triffet</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20 href=3D"mailto:canslim@lists.xmission.com"=20 title=3Dcanslim@lists.xmission.com>canslim@lists.xmission.com</A> = </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, December 22, = 2001 2:40=20 PM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] Worley's = Weekend -=20 New home sales</DIV> <DIV><BR></DIV>Hope this doesn't go too far off topic but...<BR>I = would think=20 there are other factors affecting home builders. A big one for<BR>many = is=20 driving distance. In the most populated areas of the = country<BR>"affordable"=20 housing in generally built on the outskirts. Here in Los<BR>Angeles, = that=20 means a 50-60 mile commute. Most folks here buy existing homes<BR>(as = I just=20 did 3 months ago).<BR><BR>On a personal note: I consider most new = homes to be=20 quite inferior in<BR>regards to construction compared to the older = ones (no=20 disregard for your<BR>families business btw). My last house was built = in the=20 40's. It withstood<BR>every earthquake since then. My "new" home was = built in=20 the 50's. Same<BR>situation. Plus, the big feature - = character.<BR><BR>My main=20 point is that existing home sales may have a larger impact on = the<BR>economy=20 just by the shear volume. I will still need (need???) new = furniture,<BR>paint,=20 carpet, and lets not forget my new financing I did as well. Add = to<BR>that, I=20 sold my last house to someone coming from an apartment so there = lies<BR>more=20 economic stimulus as well. Besides, I don't think homebuilders were = a<BR>good=20 indicator of the 90's bull market.<BR><BR>-Bill=20 Triffet<BR><BR><BR><BR><BR>----- Original Message -----<BR>From: = "Katherine=20 Malm" <<A=20 href=3D"mailto:kmalm@earthlink.net">kmalm@earthlink.net</A>><BR>To: = <<A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= ><BR>Sent:=20 Saturday, December 22, 2001 10:02 AM<BR>Subject: Re: [CANSLIM] = Worley's=20 Weekend Weeview<BR><BR><BR>Hello Tom,<BR><BR>At last, I am compelled = to=20 comment on your excellent WWW...<BR><BR>The normal figure bandied = about on=20 spending related to new home purchases is<BR>6 to 1. If I spend $100K = on a new=20 home, these dollars will recirculate 6<BR>times into the economy. = (Wonder how=20 many times your pentium purchase<BR>recirculates?!) So, seeing a = marked=20 downturn in the home figures would<BR>really worry the economists. = Greenspan,=20 in particular, focuses on this and<BR>was quite worried when long term = rates=20 remained sticky, despite the lowering<BR>of short term rates. I still = see the=20 strength in recent home sales<BR>reflecting the "hurry up and get it = done=20 before the rates go up again<BR>syndrome." In Austin, for example, the = homebuilders have been in aggressive<BR>selling mode for quite some = time.=20 Every day, the deal is sweetened. $10,000<BR>in extras! First two = years=20 financing at 4%! Cash at close to cover your<BR>moving expenses! Free = maid for=20 life! (Well, I made that one up.) Bigger<BR>homebuilders make most of = their=20 money not on the home, but on the financing.<BR>If they are having to = lower=20 mortgage rates to lure the customer, their<BR>margins are going to be = squeezed=20 going forward. That means in the coming<BR>year, the homebuilders will = have=20 more difficult Q over Q or Y over Y<BR>comparisons. Also, my own = family owns a=20 construction business, so I have<BR>seen these cycles first hand. You = are=20 right that the consumer seems willing<BR>to take on the additional = debt and I=20 think that, along with other economic<BR>indicators, says that the = economy is=20 far from plunging into the depths. But<BR>these things don't = necessarily=20 translate into good equity investments.<BR><BR>Happy=20 Holidays,<BR>Katherine<BR><BR><BR><BR>-<BR>-To subscribe/unsubscribe, = email=20 "<A = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In= =20 the email body, write "subscribe canslim" or<BR>-"unsubscribe = canslim". =20 Do not use quotes in your email.<BR></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_002F_01C18B0D.BCAD6340-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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