Lennar came out with bad numbers today. No surprise there. Sales down 60%. Big, big losses, etc. Although the losses were better than some had predicted, meaning a 5% rally today for home builders. Glad I got in and out of those KBH puts quickly. Bought for $1.30, sold for $1.70. Gotta love a 30% return in less than 48 hours.
But this is the part I don't get. Lennar's sales didn't frop by 100%. Which means that during the last quarter there were people who bought homes from this company. People willingly bought a new house in the midst of the worst housing crash in known memory. So my question is who are these people? How low does one's IQ have to be to buy a house for $X when you very well know that house will be worth less than $X tomorrow? Are these people stupid or do they not know any better? Do they not watch the news? Are they so brainwashed by 'HOUSING NEVER GOES DOWN' that they throw all common sense away?
I suspect a lot of these people are single womyn who as we've been told by the MSM are empowering themselves by drowning in debt. And many more of these purchases, I suspect are by couples, where the womyn of the family demands the McMansion in order to impress the friends. So what if the husband has to work 70 hours and spend another 20 hours a week commuting? Gotta have da bling to show off to the girls. Can't have your friends rolling up to a rental. UGH.
As I see it during the boom/mania, guys wanted in on the action to make money. They didn't give a shit about owning a house, they figured, there's money to be made, let's do it. I know I'm speaking from experience. When I bought my house, I didn't really want one. I was perfectly content living in my very nice 2 bedroom, 2 bathroom apartment, 5 minutes from work that cost $950 a month in rent including utilities. It had a fireplace, 11' ceilings, a balcony overlooking a courtyard, 3 pools in the complex. But I figured hell, if I buy a house I can make a killing. I bought and I did, as I also knew when to sell it.
If I were single today, I would want nothing to do with owning a house. Now that the gold has run out of the mine, I suspect lots of men folk, especially the youngens couldn't give a shit about owning the 'American Dream'. As long as there is cold beer in the apartment fridge, life is just fine.
Yeah I know I am stereotyping and being a sexist pig. But you know it's true.
Thursday, March 27, 2008
Who are these people?
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2 comments:
which is exactly why rental rates are going to shoot up even higher
Well I think that is up for debate. Logically you'd think more renters = higher rent. But you are forgetting that there are about 3-4 million empty housing units in the land. If those aren't sold they will be rented out.
In the end, rents and home prices are positively correlated. The price of a house or condo or apartment is nothing put a multiple of rent on the same unit.
Right now there is more supply of housing than there is demand.
Eventually, if builders are smart they will stop building. In a few years as the population naturally grows, those 3-4 million units will be occupied and prices will go up again.
As of right now however, rents are in free fall just like home prices.
See my post from a while back on how rents have fallen all over the country.
http://debtisslavery.blogspot.com/
2008/01/rents-falling.html
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