{"id":1593,"date":"2007-06-28T09:50:18","date_gmt":"2007-06-28T16:50:18","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=1593"},"modified":"2007-06-28T09:50:18","modified_gmt":"2007-06-28T16:50:18","slug":"new-homes-sales-market-slowdowns-and-investor-irrationality-looks-like-its-time-to-face-a-correction","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1593\/new-homes-sales-market-slowdowns-and-investor-irrationality-looks-like-its-time-to-face-a-correction\/","title":{"rendered":"New Homes Sales, Market Slowdowns, and Investor Irrationality: Looks like its Time to Face a Correction"},"content":{"rendered":"

Tanking new homes sells should have real estate flippers and small investors worried. Today KB Homes reported a loss of $149 Million. Additionally, CEO Jeffrey Mezger remarked in the Wall Street Journal, “We can’t predict when market conditions will improve,” essentially ensuring investors conditions will not improve next quarter. Homebuilders have been feeling the pinch for over a year now, but it is finally getting serious.<\/p>\n

Surface level analysis of the problems with homebuilders points to signs of a tanking real estate market and excess supply of new homes in some markets. Given the choice between a new home and a “used” home, most consumers will choose the new one. Additionally, homebuilders have the power to offer incentives like upgrades, favorable financing, and lower prices to move their inventory. Investors in hot markets that are cooling will find it hard to compete with institutions like KB Homes, Toll Brothers, Lennar, etc. This will make it tough to move, even the nicest flip. <\/p>\n

Furthermore, this situation definitely signals a slowing in the real estate market. Despite what many have been saying on the Realtor\/NAR front, investors and agents alike should be preparing for a real estate slow down. KB Homes sites access to capital as one of the mitigating factors affecting home buyers among other factors. This access issue will affect buyers, as well as more aggressive investors, who opted for no money down loans. <\/p>\n

The deeper analysis suggests all of the negative news will eventually affect the market sentiment on real estate. Over the past six months the real estate market has seen the collapse of the subprime real estate market, issues with commercial and investment banks, mortgage rates rise, and issues with homebuilders. At some point investor and consumer confidence in real estate has to be affected by all of this news. While this news may not be the tipping point, investors should be asking how much more can the market take?<\/p>\n

Investing is part fundamental and part irrational. At times the market seems to go 90\/10 one way, and at times those proportions flip. As more negative real estate news emerges Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Tanking new homes sells should have real estate flippers and small investors worried. Today KB Homes reported a loss of $149 Million. Additionally, CEO Jeffrey Mezger remarked in the Wall Street Journal, “We can’t predict when market conditions will improve,” essentially ensuring investors conditions will not improve next quarter. Homebuilders have been feeling the pinch […]<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,2,8,26,5],"tags":[],"class_list":{"0":"post-1593","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-blogging","7":"category-general","8":"category-investment","9":"category-lending","10":"category-real-estate","12":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1685,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1685\/real-estate-investing-vs-stock-market-investing-is-there-a-clear-winner\/","url_meta":{"origin":1593,"position":0},"title":"Real Estate Investing vs. Stock Market Investing- Is there a Clear Winner?","author":"Cooksquared","date":"July 23, 2007","format":false,"excerpt":"Real estate enthusiasts have been sounding their trumpet during the latest run in the real estate market. Many real estate focused investors truly believe real estate outperforms every other investment by a wide margin and even go as far as to wonder why investors would choose any other investment vehicle.\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17861,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17861\/overnight-news-when-your-account-is-overdrawn-on-drama-safety-beckons-from-the-valley-of-the-ever-fecund-sun\/","url_meta":{"origin":1593,"position":1},"title":"Overnight News: When your account is overdrawn on drama, safety beckons from The Valley of the Ever-Fecund\u00a0Sun.","author":"Greg Swann","date":"February 19, 2021","format":false,"excerpt":"We sold a lot of houses, over the past dozen years, by agreeing to do property management on them. We're small fish by any scale, but I represent a pool of investors \u2013 California middle-class, so Arizona rich \u2013 and a portfolio of homes. We bought for resale value, and\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1775,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1775\/the-national-association-of-realtors-is-simply-outrageous\/","url_meta":{"origin":1593,"position":2},"title":"The National Association of Realtors is Simply Outrageous","author":"Cooksquared","date":"August 8, 2007","format":false,"excerpt":"This title truly comes from the heart. Reading the Wall Street Journal today, I stumbled across the latest report from the lead economist at the National Association of Realtors. In the face of overwhelming negative information and despite their own lowered forecasts, Mr. Lawrence Yun states, Existing-home sales should be\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17972,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17972\/overnight-news-whats-the-best-way-to-avoid-grandchildren-youre-soaking-in-it\/","url_meta":{"origin":1593,"position":3},"title":"Overnight News: What\u2019s the best way to avoid grandchildren? You\u2019re soaking\u00a0in\u00a0it.","author":"Greg Swann","date":"March 18, 2021","format":false,"excerpt":"I realized yesterday that my ultimate objection to crypto-currencies is familial, not financial: Like all of the rest of libertarianism, crypto is a Ci solution to a Ds problem. How do you engineer trust? You don't. You cultivate it \u2013 in toddlers \u2013 and if you don't cultivate it, you\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":13252,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/13252\/joel-kotkin-why-housing-will-come-back\/","url_meta":{"origin":1593,"position":4},"title":"Joel Kotkin: Why housing will come back.","author":"Greg Swann","date":"September 15, 2010","format":false,"excerpt":"Urban savant Joel Kotkin in Forbes magazine:What we are going through now is not a sea change but a correction from insane government and business practices. The rise in homeownership from 44% in 1944 to nearly 70% at the height of the bubble reflected a great social democratic achievement. But\u2026","rel":"","context":"In "Flourishing"","block_context":{"text":"Flourishing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/flourishing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14949,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14949\/reforming-fanniemae-and-freddiemac-with-marx-rotarian-socialist-rent-seekers-of-the-world-unite-you-have-nothing-to-lose-but-your-brains\/","url_meta":{"origin":1593,"position":5},"title":"Reforming FannieMae and FreddieMac with Marx: Rotarian Socialist rent-seekers of the world unite! You have nothing to lose but your brains!","author":"Greg Swann","date":"August 17, 2011","format":false,"excerpt":"Totally cool. An actual newspaper article about America's favorite welfare program, government subsidized mortgages -- and in The Boston Globe, no less:Amid all the clamor about entitlement reform during the struggle to raise the debt ceiling, one enormous cost - and potential source of future savings - largely escaped scrutiny:\u2026","rel":"","context":"In "Flourishing"","block_context":{"text":"Flourishing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/flourishing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1593","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=1593"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1593\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=1593"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=1593"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=1593"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}