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robbinhood69 t1_j24t1z9 wrote

Reply to comment by zippynj in Thoughts on Buying Puts for Home Construction companies by Realistic_Weight_703

Maybe expanding is a strong word, but their costs have cratered I mean lumber is down a bajillion %

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zippynj t1_j24u25m wrote

You understand that all lumber purchased is from 3-6 months ago not what the current "rate" is right? All the homes built right now are still part of the inflated costs. Only homes delivered in Q3/4 23' will see reflected lumber margin discounts which will be offset by drastically reduced home sales prices

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robbinhood69 t1_j24us4r wrote

look if you wanna pull up a financial statement from a builder that shows margin compression please do

i haven't seen it yet and ur kind of proving my point

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zippynj t1_j24vqic wrote

I'm not proving your point what so ever. I don't lose sleep on people not believing what I live day to day. I'm just stating the facts from the northeast region. I really don't give a shit what your thoughts are if you believe me. Sales are down 30% month over month. Monthly cancelations are over 15-17% where normal was 5 Home prices are reducing by 5% cutting into margins As they continue to decrease to meet sales goals. Well. Do the math. A 20k lumber reduction on a house doesn't cover the margin loss with sales price and PSF cost

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BallsOutNinja t1_j26tb89 wrote

LEN just reported lower than expected margins on the last earnings.

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zippynj t1_j277jdh wrote

Yes I was on earnings call a month ago

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robbinhood69 t1_j27p0p9 wrote

fwiw LEN is diff demo lower cost housing, TOL average sale is 1mil, i'm bullish TOL KBH BLDR LPX BXC PGTI

i know i'm moving goalposts here a bit but i've said this in other comments, higher end homebuilder r diff

Homebuilder that are localized like the shit ackmans in that serves phoenix vegas texas is fucked

lower end possibly fucked idk i haven't really looked into it

EDIT : lower end of econ is getting fucked in a much diff way than higher end rn blah blah i know i'm shifting goalposts a bit here

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BallsOutNinja t1_j28v9jw wrote

I do not totally disagree with this, for now, higher end builders seem to have more demand at this time. However that could change.

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