tag:blogger.com,1999:blog-2335748440449035592.post5694858898417594605..comments2008-01-24T12:22:25.309-05:00TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2335748440449035592.post-26286262864409877732008-01-24T12:22:00.000-05:002008-01-24T12:22:00.000-05:00Hi Ben<BR/>The homebuilder stocks should rally 6-9 months ahead of a general housing recovery. Since I dont see a recovery this fall I can't get behind that thesis, but I will say this move in the 30 year rate is going to help them. <BR/><BR/>Right now I think homebuilders are not a place to really go short or long for the mid term. They have dropped in many cases 80%. A few are on the verge of bankruptcy (or should be if the banks didnt change covenants) - but in this era I guess we save every company. I think after a few quarters more there business will flatten out. But the difference between "stop going down" and "making consistent moves upward" is stark. So with homebuilders I think the easy money has been made the last 18 months. Now we will probably move to a transitorary period where they go more sideways with some spikes and drops in between. But for a sustained multi quarter move up, we need to see a better prognosis for the general economy. Maybe I am wrong and the housing market is going to bounce back by Labor Day. If so, I will come on and say, look I was wrong. But for now I just don't think homes in major urban areas are affordable at current prices whether mortgage rates are 2% or 5%. Especially if lenders insist on a down payment. So we might be moving from an era of constant terribleness to just a new era of 'bad'. And I guess thats an upgrade. :) I could see myself getting behind homebuilders maybe spring 2009 anticipating some rebound late 2009 in housing. Thats more of my timeline. I would be more bullish if I started to see some of the weaker homebuilders go out of business.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-21717031822362595382008-01-24T11:55:00.000-05:002008-01-24T11:55:00.000-05:00I agree with you about the homebuilders but I saw this morning that Bespoke is touting a "near bottom" in the group. Interesting.<BR/><BR/>http://bespokeinvest.typepad.com/bespoke/2008/01/sp-1500-group-p.htmlBenhttp://www.blogger.com/profile/01001242150400508914noreply@blogger.com