I think that's a national chart? No argument there. I'm just talking about LA. Prices and sales are definitely way up this summer. Multiple offers above asking price are common again. It is what it is.

Hiphop-

What do you do for a living?

Can rates stay low forever? Or at least 5-10 more years?Then go ahead and buy at the right price - but consider and if incomes are rising- but in 90percent of Country incomes are not rising- and rates will go up but maybe so fast as to tank housing back into 1990 prices- as always buyers beware.... someone once said on this forum- when you take out a mortgage your making a long term bet in the fixed income market and you'd better be right cause you're playing against the Pros

I understand those arguments, and I haven't made any decision. I've been making them myself for 5 years and agree with them, but it doesn't seem to matter where I live.

I'm not a real-estate professional, if that was your question, Mayor, though I do own some rentals out of town. When I say "LA" I'm talking more about specific areas where I'm looking rather than LA County overall (Studio City/Valley Village/North Hollywood/Burbank mostly). They corrected over the last 5 years, but not nearly to what I think you or I would agree they "should" have, and they are now appreciating again. I've looked at a number of places and there were multiple offers/cash offers above asking, plus have heard the same from others who have bought/are buying. It drives me absolutely nuts.

Patience, grasshopper. When the bad debt surfaces the landscape will be unrecognizable. Arithmetic functions don't include "opinion".

long public builders at 2x leverage on pullbacks.. that is the play..

Lawsguy- can you put that in a " investing in real estate for dummies" kind of sentence- for those of us not at your level?

Poer

Las has been long RE
now he is doubly long RE

Thanks Vegas
I know laws plays in the high level stuff where I can't venture- I believe his sig. Line was something like high Alpa Bitches- but I can't see posting from my phone- but I know he trades with leverge and big balls if you will- but he is the pro that guys who take out mortgages are playing with or against as I mention in my previous post- but like Asian Bull who used to post here- they and lilely you and Karl and other real traders here are at a table where I couln't even ante up

look dude.. just sell puts... or buy the stock and sell covered calls over the top of any large builder.. if u want less leverage, take a bigger one like PHM or DHI .. if prefer a more leveraged balance sheet.. pick BZH or HOV.. on a 10% pullback, and sell the puts at 10% below the stock price.... repeat this strategy and follow it for the next 5 years.. and I ****en guaranty you will make a ****load of money.... big money is already making big moves.. you heard it here first..****..


i already made a ****load of money on the debt side on the builders.. and also in CRE space.. its time to rotate in alot of big money is already in.. thats why the names are already up 200% from the lows positing for the next cycle..

Las, you may be right, but that would mean that the risk reward paradigm has changed. Although I would have to note that it does look like that is indeed the case.

http://www.marketwatch.com/story/hovnani....

-- Net income was $34.7 million during the fiscal 2012 third quarter, or
$0.25 per common share, compared with a net loss of $50.9 million, or
$0.47 per common share, in last year's third quarter. This represents an
increase of $85.6 million over last year's net income during the
quarter. Net income in the fiscal 2012 third quarter benefitted from the
reversal of $37.0 million of state tax reserves.

-- In the first nine months of fiscal 2012, net income was $18.2 million,
or $0.15 per common share, compared with a net loss of $187.7 million,
or $1.92 per common share, in the prior year's first nine months.

-- Total revenues were $387.0 million during the fiscal 2012 third quarter
up 35.5% compared with $285.6 million in last year's third quarter. In
the first nine months of fiscal 2012, total revenues were $998.3 million
up 25.8% compared with $793.3 million in the prior year's first nine
months.

-- The dollar value of net contracts, including unconsolidated joint
ventures, for the third quarter ended July 31, 2012 increased 31.8% to
$507.0 million compared with $384.6 million in the same quarter last
year. The number of net contracts increased 18.8% to 1,541 homes from
1,297 homes in the same quarter last year.

-- For the nine months ended July 31, 2012, the dollar value of net
contracts, including unconsolidated joint ventures, increased 43.0% to
$1.4 billion compared with $980.7 million in the same period a year ago
and the number of net contracts increased 32.7% to 4,395 homes compared
with 3,313 homes in the first nine months last year.

-- Homebuilding gross margin percentage, before interest expense included
in cost of sales, was 18.2% for the fiscal 2012 third quarter, compared
to 15.3% during the third quarter of 2011 and 17.4% in the second
quarter of 2012. For the nine month period ended July 31, 2012,
homebuilding gross margin percentage, before interest expense included
in cost of sales, was 17.5% compared with 15.6% in the first nine months
of 2011.

-- Total SG&A was $48.1 million or 12.4% of total revenues for the three
months ended July 31, 2012 compared to $46.5 million or 16.3% of total
revenues in the third quarter of the prior year and 13.9% in the second
quarter of 2012. In the first nine months of 2012, total SG&A was $141.6
million or 14.2% of total revenues compared with $153.6 million or 19.4%
of total revenues in the same period last year.

-- Consolidated pre-tax land-related charges for the third quarter of
fiscal 2012 were $0.7 million compared with $11.4 million in the third
quarter of the prior year. For the nine months ended July 31, 2012, the
consolidated pre-tax land-related charges were $7.2 million compared
with $41.9 million in last year's first nine months.

-- Repurchased $2.0 million of unsecured senior notes for $1.5 million in
cash and issued approximately 5.4 million shares of Class A common stock
in exchange for $21.0 million of unsecured senior notes during the three
months ended July 31, 2012, resulting in a $6.2 million gain on
extinguishment of debt.

-- Pre-tax loss during the third quarter of 2012 was $1.8 million compared
with $55.6 million in the same period of the prior year. For the nine
months ended July 31, 2012, the pre-tax loss was $17.0 million compared
with $193.8 million during the first nine months a year ago.

-- The contract cancellation rate, including unconsolidated joint ventures,
in the third quarter of 2012 was 21%, compared with 19% during the 2011
third quarter.

-- Contract backlog, as of July 31, 2012, including unconsolidated joint
ventures, was 2,452 homes with a sales value of $813.9 million, which
was an increase of 41.2% and 42.6%, respectively, compared to July 31,
2011.

-- Deliveries, including unconsolidated joint ventures, were 1,387 homes
for the third quarter of fiscal 2012, up 24.7% compared with 1,112 homes
in the third quarter of the prior year. During the nine months ended
July 31, 2012, deliveries, including unconsolidated joint ventures, were
3,606 homes compared with 2,971 homes in the first nine months of last
year, an increase of 21.4%.

-- The dollar value of net contracts and the number of net contracts,
including unconsolidated joint ventures, for the month of August
increased 48.7% and 26.0% respectively to $166.8 million compared with
$112.2 million and to 484 homes from 384 homes in the same month last
year.

-- The valuation allowance was $909.1 million as of July 31, 2012. The
valuation allowance is a non-cash reserve against the tax assets for
GAAP purposes. For tax purposes, the tax deductions associated with the
tax assets may be carried forward for 20 years from the date the
deductions were incurred.

higher top line at a sick ****ing 35%, at higher gross margins (18%)with higher SG&A..."were hiring more workers".. not hard to figure out which way this is going... now add to that further monetary easing.. which is my gut..

Thanks Laws- so are you saying my highly educated wife an architect with a Masters degree and 8 years experience as An Architect and project manager who was lead on design for the first two Condo Towers in San Jose- who hasn't worked in 4 years- will be working soon? And I can stop being sole source of income? Well I say Halehlulah- or something... I'm going all in long- and high alpha bitches- " like I really know what that means" I obviously don't pee in the tall grass with you big dogs. Love this forum- like a fan who watches the pros at work- as obsequious as that sounds it is true. Takes a bigger sack to play at the big league level:.. why I petered out in the bush leagues

check out the price action on HOV.. like i said was a good levered play.... how about a ****ing 70% return in week... how about that call kids.. LOLOL..."no one ever listens to turtle.." any questions?

Quote:

long public builders at 2x leverage on pullbacks.. that is the play..

----------
positive alpha - bitches!
2012-09-06 20:01:09

Nice call Laswyguy
I'm amazed at how good some of plays you've made
positive Alpha indeed

The wife went out to look at the showcase of homes yesterday with a friend and ran into the guy who tried to sell our house in 2007 and he told her that their sales were up 25% this year compared to last year.

and I will bet you that 2013 sales will be higher 2012.. .. (now someone please dig up that AUTO sales thread from 2009)... when sales bottomed at 9MM SAAR.. and I called that 13 million.. and everyone laughed... reality is we are at 14.5MM..but but but but poeple are driving their cars longer.. is all i heard.. i havent bought a car in 10 years.. blah ****ing blah...