Monday, September 18, 2006

Home Builder Confidence Hits 15 Year Low

From the NAHB:

Builder Confidence Slides In August

Reacting to what they perceive as increasing consumer uncertainty regarding the market for new single-family homes, builders tempered their views on current and expected sales activity in the Wells Fargo/National Association of Home Builders Housing Market Index (HMI) for August, released today. The HMI declined seven points to 32, its lowest level since February of 1991. This was the seventh consecutive month in which builder confidence, as measured by the index, has fallen.

“Two big factors are coloring builders’ perceptions of the market right now – rising sales cancellations and substantial growth in inventories of both new and existing homes,” said NAHB Chief Economist David Seiders. “These factors are largely the result of an increasing number of potential buyers adopting a ‘wait-and-see’ attitude because of uncertainty about where the housing market is headed, and record-high energy costs also appear to be weighing on housing demand. We’re also seeing an anticipated withdrawal of investors/speculators from the market, following a major influx in 2004-2005.”
All three component indexes declined in August. The component gauging current single-family home sales fell seven points to 36, while the component gauging sales expectations in the next six months and the component gauging traffic of prospective buyers both fell six points, to 40 and 21, respectively.

Regionally, the HMI recorded a three-point decline to 34 in the Northeast, a five-point decline to 15 in the Midwest, a nine-point decline to 41 in the South and a 10-point decline to 42 in the West.

From Marketwatch:

Home builders' confidence falls again in September

The confidence of U.S. home builders fell for the eighth straight month in September, dropping to the lowest level since February 1991, the National Association of Home Builders said Monday. The NAHB/Wells Fargo housing market index dropped by three points in September to 30 from a revised 33 in August, indicating that most builders think the housing market is poor. Economists expected the index to fall to 31. A year ago, the index was at 65. A reading of 50 would indicate builder sentiment was balanced between good and poor. (This is an update to correct how many months in a row the index has fallen.)


Anonymous Anonymous said...

a year ago as HBer execs were onloading stock options they were saying the end was nowhere in sight.

Now........a 180 degree turn.

Housing Crash in progress.

Go ahead and buy and be a bagholding losing fool.

9/18/2006 01:04:00 PM  
Anonymous Anonymous said...

This amounted to a three-point drop from an upwardly revised 33 reading in August, and is the lowest level the index has reached since February of 1991.”

Remember quite clearly the winter of 1993. It was dead. Notttting was moving. Nottting and no bids.
Realtors were harassing begging and starving. No attitude adjustment yet.Prices were decimated for condos. Second homes down the shore were absolutely crushed!

This recent mania is the biggest baddest one ever. So the hangover is going to be the biggest and baddest also.


9/18/2006 01:18:00 PM  
Blogger chicagofinance said...

Off-Topic - but "ooooooofffff!"

Amaranth Says Funds Lost 50% on Gas Trades This Month (Update3)

By Katherine Burton

Sept. 18 (Bloomberg) -- Amaranth Advisors LLC, a hedge-fund manager with $9.5 billion in assets, warned investors that its two main funds fell almost 50 percent this month because of a plunge in natural-gas prices.

``We are in discussions with our prime brokers and other counterparties and are working to protect our investors while meeting the obligations of our creditors,'' Nick Maounis, founder of the Greenwich, Connecticut-based firm, said in a letter to investors obtained by Bloomberg News. The funds, which had gained 26 percent through August, are down at least 35 percent for the year.

Amaranth, which made so-called spread trades that try to profit from price discrepancies among futures contracts, is at least the second hedge fund to be hurt by this year's tumble in natural gas. Last month, MotherRock LP, a $400 million fund run by former New York Mercantile Exchange President Robert ``Bo'' Collins, went bust after natural-gas futures fell 68 percent from their Dec. 13 peak.

``To lose that much so fast, the traders involved didn't have any stops'' in place, said Robert Webb, a professor of finance at the University of Virginia and a former trader, referring to a type of trade designed to limit losses. ``Sometimes spreads go awry.''

9/18/2006 01:20:00 PM  
Anonymous Anonymous said...

The Credit Blowup is in progress.

Meltdown.......the free phoney loans gone and so will speculator and builder demand....


40% house price drops around the corner.

9/18/2006 01:32:00 PM  
Blogger grim said...

Came across that earlier CF, I thought the same thing..

9/18/2006 01:44:00 PM  
Blogger grim said...

Everyone, take some time and become more familiar with:

New Jersey Real Estate Report

It's our new home.


9/18/2006 01:45:00 PM  
Blogger chicagofinance said...

``We are in discussions with our prime brokers and other counterparties and are working to protect our investors while meeting the obligations of our creditors,''

you see can appreciate how this filters through the system

prime brokerage = investment banks

did you see the movement of natural resources and precious metals? that was the hedge funds at work

just keep monitoring this stuff

note ....the funds were up 26% YTD through August and then in the last three weeks they have lost enough to be down 35% YTD. As they said, they lost 52% in September.

This can and will affect housing in the NYC-area if it happens on a larger scale......

9/18/2006 01:50:00 PM  
Anonymous Anonymous said...


Follow up. However, small potatoes compared to Amaranth. If this keeps up, the housing market will not be the receipient of hedge fund bonus $.

Aeneas Capital Management LP, the hedge fund company run by former SAC Capital Advisors LLC money manager Thomas Grossman, is under investigation by regulators in the U.S. and Malaysia after bets on Malaysian stocks caused losses of about 60 percent in one of its funds, people familiar with the situation said.

The U.S. Securities and Exchange Commission is examining Aeneas to determine whether it broke any securities laws, three people with direct knowledge of the inquiry said. In Kuala Lumpur, Aeneas is being probed for potential stock manipulation, said the people, who declined to be identified because the investigations aren't yet public.

Aeneas, which managed as much as $400 million and invested mostly in emerging markets, highlights the risks of funds that make concentrated bets and don't have to make routine disclosures with regulators. More than 500 hedge funds have shut in the past two years, according to data compiled by Chicago-based Hedge Fund Research Inc. Altogether, they've caused less disruption to global markets than the collapse of Greenwich, Connecticut-based Long-Term Capital Management LP in 1998

BC Bob

9/18/2006 01:51:00 PM  
Anonymous Anonymous said...


"did you see the movement of natural resources and precious metals? that was the hedge funds at work"

Don't forget the central banks and the plunge protection team in Wash.. Great timing, right before the fed's wed. meeting. Central banks have an uncanny ability to sell the PM's at the low of a move.
We'll see.

BC Bob

9/18/2006 01:59:00 PM  
Anonymous Anonymous said...

The dirt strts to come 0ut.

This is going to get mighty dirty!

9/18/2006 01:59:00 PM  
Blogger grim said...

We're going to use the forums for comments and discussion. There will be forums that allow anonymous replies, but most will require registration.


9/18/2006 02:14:00 PM  
Blogger grim said...

232 users have already registered for the forums. The registration process is quick and easy.


9/18/2006 02:15:00 PM  
Anonymous Anonymous said...

Looks like the masses believe in the bubble

That's an argument against the bubble right there.

9/18/2006 03:45:00 PM  
Blogger Unknown said...

Very inspiring post with the experience of you sharing details. Thank you very much.

Flats for sale | Apartments for sale

7/09/2016 12:29:00 AM  

Post a Comment

<< Home