Make us your home page
Instagram

Stocks of several builders are rising sharply

In a housing market that few consider anything but wretched, a few players are making a fortune playing Builder Bingo.

If you made a down payment of $40,000 on a new house on Jan. 1, you probably haven't made a dime on your real estate investment.

But if you bought $40,000 worth of stock from the very same builders, you'd have hit the jackpot.

I'll pass on the property; just give me the paper.

Check out two builders active in the Tampa Bay area. A $40,000 investment in
M/I Homes stock at the start of the year would have been worth about $63,000 on Thursday. A similar Jan. 1 investment in Beazer Homes stock would have swollen to $57,000 four months later.

Pulte stock is up a frothy 27 percent since Jan. 1. Ryland's stock has risen a market-beating 13 percent.

Something's not quite right with this picture. In the business quarter that ended March 31, Tampa area builders reported new-home closings were off 47 percent from a year earlier. Good deals abound, thanks to all the price cuts, but that's not helping builder profits.

Last week, Centex Homes reported it lost $910-million in the first three months of 2008. That followed a loss of more than $2-billion in 2007. Its stock rose 7 percent on the news, of course.

It seems like Wall Street is throwing ticker tape parades for a bunch of losing teams.

Why are stocks of these bruised builders kicking derriere? Some suggest housing pessimism has driven stocks too low and the stock market is making belated amends. Others say the rise suggests the worst is over and a recovery is within sight.

Or maybe it's temporary insanity: Stock traders are just feeding off the froth and will soon seek sustenance elsewhere.

Metrostudy, a consultant for the housing industry, sees the Tampa new-home market stabilizing in 2009. Strong immigration and family formation suggest the future is secure for builders that survive the downturn. Though it's not the only destination, Florida remains a prospective favorite with baby boomer retirees looking to grow wrinkly in the sun.

But it's hard to believe the path to riches this year lies in squirreling away home builder stocks. Could it all be an overreaction based on a misreading of the market? Naaahhh! That's never happened in real estate before.

FAST FACTS

Stock value change since Jan. 1:

M/I Homes up 57 percent to $16.55.

Beazer up 42 percent to $10.55.

Pulte up 27 percent to $13.26.

Ryland up 13 percent to $31.14.

Stocks of several builders are rising sharply 05/08/08 [Last modified: Monday, May 12, 2008 9:02am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Carrollwood fitness center employs scientific protocol to help clients

    Business

    In 2005, Al Roach and Virginia Phillips, husband and wife, opened 20 Minutes to Fitness in Lakewood Ranch, and last month they opened the doors to their new location in Carrollwood.

    Preston Fisher, a personal fitness coach at 20 Minutes To Fitness, stands with an iPad while general manager/owner Angela Begin conducts an equipment demonstration. The iPad is used to track each client's information and progress. I also included one shot of just the equipment. The center recently opened in Carrollwood. Photo by Danielle Hauser.
  2. Olive Tree branches out to Wesley Chapel

    Business

    WESLEY CHAPEL — When it came time to open a second location of The Olive Tree, owners John and Donna Woelfel, decided that Wesley Chapel was the perfect place.

    The Olive Tree expands its offerings of "ultra premium?€ extra virgin olive oils (EVOO) to a second location in Wesley Chapel. Photo by Danielle Hauser.
  3. Massachusetts firm buys Tampa's Element apartment tower

    Real Estate

    TAMPA — Downtown Tampa's Element apartment tower sold this week to a Massachusetts-based real estate investment company that plans to upgrade the skyscraper's amenities and operate it long-term as a rental community.

    The Element apartment high-rise at 808 N Franklin St. in downtown Tampa has been sold to a Northland Investment Corp., a Massachusetts-based real estate investment company. JIM DAMASKE  |  Times
  4. New York town approves Legoland proposal

    News

    GOSHEN, N.Y. — New York is one step closer to a Lego dreamland. Goshen, a small town about fifty miles northwest of the Big Apple, has approved the site plan for a $500 million Legoland amusement park.

    A small New York town, Goshen approved the site plan for a $500 million Legoland amusement park. Legoland Florida is in Winter Haven. [Times file  photo]
  5. Jordan Park to get $20 million makeover and new senior housing

    Real Estate

    By WAVENEY ANN MOORE

    Times Staff Writer

    ST. PETERSBURG —The St. Petersburg Housing Authority, which bought back the troubled Jordan Park public housing complex this year, plans to spend about $20 million to improve the 237-unit property and construct a new three-story building for …

    Jordan Park, the historic public housing complex, is back in the hands of the St. Petersburg Housing Authority. The agency is working to improve the 237-unit complex. But the latest plan to build a new three-story building for seniors will mean 31 families have to find new homes. [LARA CERRI   |   Tampa Bay Times]