R.e.a Share Discussion Threads

[nirvs] 06/11/2006 11:53

Thanks for your comments doubleorquits. Very useful info. Long today at 407p

[doubleorquits] 01/11/2006 07:49

metraco,

Diogenes and I have bumped into each other on a few threads recently where shares are destined to become part of the Small Caps Index in December's Review. This usually leads to a rise on the back of tracker funds having to purchase (Fledgling stocks do not qualify for tracking). As a result it seems that Diogenes and I are seeking opportunities to get in before these changes happen (hopefully). REA. has moved up nicely already but the recent fall back has, perhaps, provided an opportunity to buy.

CNT and ACE are moving from AIM to the SMX so qualify. Others that look certain to be promoted include ABU,CHW,VLK,OPD,LVD and a few others that can be tracked on the following site:



As for price targets it is more difficult but I usually look for 15% minimum but it can be as much as 40%+ as happened with QXL last year. So with RE. I'm looking for a rise in the next two months to take it over 450p and hopefully to 500p as it iseems fairly illiquid too

[metraco] 31/10/2006 20:48

i hold what price target did you put on rea i have 500p target.

any other share you are watching at the moment.
still new to investing wish to learn more


metraco

[doubleorquits] 31/10/2006 13:44

Certainly appears to be very close to one today, D :0)

[diogenesj] 30/10/2006 20:29

Possible buying opportunity approaching, DoQ? :-)

[doubleorquits] 30/10/2006 20:00

Still pretty quiet D :0)

[diogenesj] 24/10/2006 22:03

Hmm, nice and quiet here.

[altom] 27/9/2006 08:18

not a ten bagger. I look for +50% in 2 years. thats good enough for me. Management very sound but quite aggressive.

[energyi] 26/9/2006 03:51

(from GHPC): and

"crash cruise speed":

[energyi] 26/9/2006 03:10

Home prices: 1st drop in 11 years
Sales slow, prices hit by second biggest year-over-year drop on record; surge of homes for sale seen keeping prices weak.

By Chris Isidore, CNNMoney.com senior writer
September 25 2006: 1:41 PM EDT


NEW YORK (CNNMoney.com) -- Home sales slowed and a key measure of prices fell for the first time in 11 years last month, spurred by the biggest glut of new homes on the market in more than a decade, an industry group said Monday.

The National Association of Realtors report on existing home sales showed that the median home price in August was $225,000, down 1.7 percent from a year earlier.


It was the first year-over-year decline in median prices since April 1995, when that measure slipped only 0.1 percent. And it was the biggest year-over-year drop since the record 2.1 percent decline recorded in November 1990, when the nation was in recession.

While month-over-month declines in prices are not uncommon, year-over-year decreases in prices are a more serious sign of a slumping housing market. Even in other recessions, home prices generally have risen year-over-year on a national basis. The median price is the point at which half the homes sell for more and half sell for less.

The decline in home prices follows a period of record sales and very strong sales gains up through the end of 2005. The average price of a home in 2004 was up 9.3 percent from the previous year, and last year the full-year price average was up 12.4 percent.

The downward pressure on prices came from the record inventory of homes on the market in August. The group said there were 3.9 million homes on the market, up 38 percent from a year earlier. That gave the market a 7.5-month supply of homes, also up sharply from the 4.7-month supply available in August 2005, and the average 4.3-month supply throughout 2004.

The last time the group estimated a 7.5 month supply was April 1993.

The report also showed the pace of sales essentially leveling off, slipping to an annual pace of 6.30 million in August from a revised July reading of a 6.33 million rate. While that's down just a bit from July, the pace of sales is down 12.6 percent from a year earlier.

Economists surveyed by Briefing.com had forecast that sales would slow to a 6.20 million pace in August.

The group's report also showed the average price, which is typically higher than the median price, slipped 1.5 percent from a year ago to $271,000 in August.

David Lereah, the trade group's chief economist, said the relatively small drop in sales in August suggested that housing has cooled to a more sustainable pace, although he conceded the weakness in prices is likely to continue.

"We do expect an adjustment in home prices to last several months as we work through a buildup in the inventory of homes on the market," he said in the group's statement.

Mortgage rates have come down in recent weeks, with the average 30-year fixed rate mortgage now at 6.4 percent, according to mortgage financing firm Freddie Mac (Charts). That's down from 6.79 percent in early July.

The drop in rates, which reduces the cost of home ownership, won't necessarily show up in existing home sales figures for several months, though.

But some in the industry say lower mortgage rates won't be enough to revive the sales market, which hit its ninth record in 10 years in 2005. Sellers also will have to start reducing prices to get sales back on track.

"In some areas home sellers are not making sufficient adjustments in their listing price, so their homes are staying on the market and contributing to the buildup in inventory," said Thomas Stevens, a realtor in Vienna, Va., and the president of the trade group.

Existing home sales is not the only portion of the real estate market to show weakness.

New home sales and prices for new homes have fallen sharply as well, with many of the nation's leading builders, including KB Home (Charts), Lennar (Charts), Toll Brothers (Charts) and Hovnanian (Charts), lowering guidance on home sales in recent weeks, reporting lower prices and excess supply of homes on the markets.

The government report on new home sales in August is due Wednesday. While that's a fraction of the overall market, the new home sales report is closely watched as a leading indicator of the market since it's based on sales when contracts are signed, not on closings, which are often months later.

@:

[energyi] 26/9/2006 02:16

Metro area...(6/2006): nov'06 / feb'07 / may'07 / aug'07 / 09/25 (op.int)
Boston....... 177.90 : 176.80 , 172.20 , 167.40 , 164.20 - 7.7% ( 000)
Denver....... 139.46 : 139.60 , 137.20 , 131.60 , 131.60 - 5.6% ( 000)
Las Vegas.... 233.75 : 231.60 , 225.40 , 218.60 , 215.00 - 8.0% ( 000)
San Diego.... 249.60 : 248.40 , 239.00 , 232.80 , 229.80 - 7.9% ( 000)
10 Cities.... 225.96 : 224.20 , 218.60 , 212.00 , 210.20 - 7.0% ( 000)

[energyi] 26/9/2006 01:59

US REAL ESTATE FUTURES - 10 Locations, plus composite

Main index:

Prediction: Housing prices are going down across the nation.
If the sentiment of traders is a valid indication, housing markets will be a lot lower next year.

Metro area...(6/2006)(8/2007) Diff. (at Sep.19th):
Boston....... 177.90 : 164.40 -7.6%
Chicago...... 167.10 : 157.20 -5.9%
Denver....... 139.46 : 131.60 -5.6%
Las Vegas.... 233.75 : 214.60 -8.2%
Los Angeles.. 273.22 : 255.00 -6.7%
Miami........ 278.22 : 259.20 -6.8%
New York..... 212.79 : 202.00 -6.0%
San Diego.... 249.60 : 230.00 -7.9%
San Francisco 218.13 : 202.40 -7.2%
Washington... 250.39 : 233.00 -6.9%
10-City...... 225.96 : 211.40 -6.4%

Source:Chicago Mercantile Exchange
Note: All cities were assigned a base of 100 in 2000. An index of 177.90 means prices have risen 77.9 percent since then.

= = =

Home futures: Price-drop seen for 10 top markets
Trading in residential housing futures is more evidence that housing markets may be in decline.

By Les Christie, CNNMoney.com staff writer ... Sep. 19, 2006

NEW YORK (CNNMoney.com) -- Home prices will be lower a year from now in the nation's leading markets - at least that's what investors speculating on residential real estate believe.

Trading in housing futures on the Chicago Mercantile Exchange point to declines by next August of at least 5 percent for 10 leading markets; speculators are betting the biggest decline will be in Las Vegas, with a drop of 8.2 percent.

Prediction: Housing prices are going down across the nation.
If the sentiment of traders is a valid indication, housing markets will be a lot lower next year.
Metro area Index
(6/2006) Futures - (8/2007) Diff.
10-City 225.96 211.40 -6.4%


The S&P CME Housing Futures and Options, launched this past spring, enable investors to hedge against a drop in the value of residential properties in the future or to bet that those values will go up.

The investments are tied to the the Case-Shiller Home Price Indices. According to Robert Shiller, author of "Irrational Exuberance," the results of the trading in housing futures have substantial predictive value. "It gives us a finger on the pulse of the markets," he says. "We've never had that before."

Before the launch, there had been little opportunity for real estate speculators to invest in housing markets short of going out and buying actual properties.

Still, the investment vehicles may be too new to have the same predictive power as other derivatives products.

"The [trading results] have some predictive value and I would not expect them to be off investors' expectations by some order of magnitude," says Richard DeKaser, chief economist for National City Corp who compiles his own market valuations. "But it is not a very deep market. It is traded very thinly. I would be reluctant to attach too much importance to the numbers right now."

So far, however, those doing the trading seem to be betting correctly. Trading yielded results earlier in the summer that came "fabulously close'" to where the actual index wound up in August, according to Fritz Siebel, director of property derivatives for Tradition Financial Services, which brokers the S&P CME Housing Futures and Options.

That's not good news for homeowners in Boston, New York and other big markets - every one of the 10 cities covered by the indexes is showing a drop. The smallest loss is in Denver, where trading activity forecasts a decline of 5.6 percent. The 10-city cumulative index shows a drop of 6.4 percent.

According to Shiller, the numbers may exaggerate the extent of the decline because there is a risk premium that has to be taken into account. In other words, more traders are interested in protecting themselves against loss than are interested in investing in a growing market.

"As a result the predicted decline might be a bit bigger than the actual one," says Shiller.

As the market for these derivatives grows and investors enter into it who are willing to take the opposite position, that risk premium should shrink.

Even taking all that into account, the trading still indicates a fairly substantial turnaround. It joins a host of other indicators, both statistical and anecdotal, that seem to agree that housing prices will not only soften but actually decline.

As Siebel puts it, "It sounds like the housing market is set up for a fall; I think we've reached a tipping point."


@:

= = = = =
LINKS:
updated quotes:

[shoee62] 11/4/2006 07:21

there was something in the FT saying that palm oil prices have been coming off. (was it Plantation and general's results?)

might be the reason for recent price weakness

[promethean] 01/4/2006 17:29

Really like this stock as an excellent way to play the coming soft commodities boom...

[lafiamma] 18/11/2005 11:25

I reckon these are ripe for a big move up, what do you think energyi, a good time to go long on the US Homebuilders??

[scarface01] 30/9/2005 15:03

Hedge funds that have been short, booking profits onto their books today.

Will be a good short at EOD

[energyi] 28/9/2005 06:15

(A Good article on Greenspan's abysmal forecasting ability):

In 1996, Greenspan fretted aloud about the frothy stock market. But by 2000, he was praising a productivity revolution that seemed to validate the elevated share prices of the day. THAT is when the bubble burst and
the stock market cratered.

On December 5, 1996, as you may recall, Greenspan uttered his infamous "irrational exuberance" remark. During a speech at the American Enterprise Institute for Public Policy Research in Washington, D.C., Greenspan mused, "How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?" To all the world, Greenspan's remark seemed a clear declaration that share prices had risen to excessive levels. (Greenspan never argued this inference, nor retracted the comment).

Over the ensuing three years, the Nasdaq Composite Index quadrupled. But instead of worrying more about soaring stock prices, the Chairman worried less. In early 2000, with the Nasdaq levitating just below 5,000, the Chairman seemed to decide that share prices weren't so high after all.

REMEMBER WHEN STOCKS PEAKED?

On March 6, 2000, Greenspan assured a Boston College conference on the "New Economy" that the Internet-based economy would continue to foster productivity, technology innovation and enduring wealth creation.

"I see nothing to suggest that these opportunities will peter out anytime soon," Greenspan predicted. "Indeed, many argue that the pace of innovation will continue to quicken in the next few years as companies exploit the still largely untapped potential for e-commerce..."

Alas, the Nasdaq topped out almost immediately after Greenspan stepped away from the podium.

As we fast-forward to August 27, 2005, we find Chairman Greenspan musing aloud once again about asset values. But this time the topic is housing, not stocks.

"Nearer term, the housing boom will inevitably simmer down," the Chairman declared last month at the Jackson Hole confab of economic mucky-mucks. "As part of that process, house turnover will decline from currently historic levels, while home price increases will slow and prices could even decrease. As a consequence, home equity extraction will ease and with it some of the strength in personal consumption expenditures..."

It's true; the housing boom will "inevitably simmer down," just as the Chairman predicts, but maybe it will not do so over the "near term." Indeed, yesterday's home sales report suggests that the housing market has absolutely no intention of simmering down. Sales of previously owned homes in August posted their second-highest level on record, while home prices increased by the largest amount in 26 years. Median house prices climbed to a record of $220,000 in August, a gain of 15.8 percent from the same month a year ago. That was the biggest 12-month increase since July 1979.

So what might keep the U.S. housing boom humming along for much longer than most of us can imagine?
Maybe a confluence of factors...

Specifically, the price of oil and most other commodities might "simmer down" for a while, thereby allowing consumer confidence to perk up. Quiescent commodity prices might also allow interest rates to dip again. And we all know what confident consumers do with low interest rates: They borrow and buy...especially houses. A drop in interest rates would also help mortgage lenders to help home-buyers to buy "more home" than they could otherwise afford.

The housing boom will end, but it may not end exactly on Greenspan's cue.

(OR they might COLLAPSE down, rather than simmering down)

[energyi] 02/9/2005 15:00

Alpine's Lieber Still Hopeful on Housing

By Gregg Greenberg
TheStreet.com Staff Reporter ... 9/2/2005

Hurricane Katrina could buoy plummeting homebuilding stocks and REIT funds.

The average REIT fund is down 6% over the past month, according to Morningstar, and the Philadelphia housing sector index has fallen more than 9%. The severe downdraft has got real estate investors on edge, wondering if the end of the so-called housing bubble is finally at hand.

One voice of calm in an otherwise worried marketplace is Sam Lieber, portfolio manager for the $900 million Alpine U.S. Real Estate Equity fund. Lieber says the latest pullback is not unusual and certain sectors could even benefit from rebuilding projects associated with Hurricane Katrina.

Lieber's fund, which is heavy on homebuilding stocks like KB Home (KBH:NYSE - commentary - research - Cramer's Take), Lennar (LEN:NYSE - commentary - research - Cramer's Take) and Toll Brothers (TOL:NYSE - commentary - research - Cramer's Take), has lost over 10% in the past month, but is still up more than 11% this year.

TheStreet.com checked in with Lieber to get his views on housing bubbles and hurricanes.

REITs and homebuilders have been hit pretty hard in the past month. What's behind the big downturn?

You have to remember that these stocks have had a very good run. From March through the end of July, REITs and homebuilders rose 26% and 43% respectively. So to see a pullback makes sense. The stocks were due for a correction.

On top of that, there are general fears about higher interest rates. Obviously, that hasn't happened yet, but the strong Aug. 5 employment report hit the stocks too.

Fed Chairman Alan Greenspan alluded to a housing bubble recently, which also didn't help real estate stocks. What's your position on the so-called bubble?

The world is certainly awash in liquidity. There are significant amounts of investment dollars looking for a home in real estate as well as a huge amount of investment dollars looking to finance real estate. Our view is that the world has not changed. There may be less of a cushion now, but overall there is less of a cushion in the economy whether it's the government or current account deficit.

In terms of the risk premium in housing, Greenspan is certainly correct that low returns in other areas have pushed investors to take on more risk for incremental return.

Your fund is top heavy when it comes to homebuilders and it's benefited you greatly. Is there any chance that you hit the brakes on the group soon?

Since February 2000 through July 2005, the homebuilding group has gained 812%. During that time period, the companies also averaged 33.5% annual earnings growth. Hence, it's not surprising that their multiples only increased from 4.5 PE on a forward-looking basis to about 6.5 times.

Given the huge order backlogs for these companies and their demonstrated capacity to increase market share at a double-digit pace and their financial strength, it suggests to me that these stocks will continue to provide revenue and earnings growth.

...MORE:

[scarface01] 25/8/2005 14:02

shorted toll today right at the top when it opened after results, it quickly reversed a buck and a half for a very quick profit.

[energyi] 24/8/2005 16:11

THIS (from Header still looks right)

BUT the peak stretched to July.2005.
Next Low in Dec.2006, then?

U.S. Homebuilder Cycle Timing

Sym. .High- Low. : .High- Low. : .High- Low. : .High- Low. : .High- Low.
Peaks #1........ : #2......... : #3......... : #4......... : #5.........
CTX: Q1'72-q4'74 : Q1'80 q2'82 : Q3'86-q4'87 : Q1'94-q4'94 : Q4'98-q1'00

Ave. Timing : Years.....: Ave. : Quarters..........: Ave
High-to-High: 8+6+8+4.. = 6.5yr: 32+26+22+19...= 99: 25
Low -to Low : 8+5+7+6.. = 6.5yr: 30+22+28+21...=101: 25
High-to- Low: 2+2+1+0+2 = 1.4yr: 11+ 9+ 5+ 3 +5= 33: 6.6
Low -to-High: 6+4+7+4.. = 5.2yr: 21+21+25+20...= 87: 22
: #6.?Current?..
: Q1/Q2'05-q3/q4'06

WHAT IS INTERESTING: ... Is the rapid SPEED of the Drop.
The typical cycle was something like: 5yrs UP, 1.5yrs DOWN.
ALSO: the cycles seem to be speeding up, especially the UP phase.
THUS:
We might expect: a 24/5 qtr. UP phase/#6 Peak: to Q1/Q2'05 &
...............: a 6 qtr. Fall to LOW of maybe q3/q4'05 (ideally: Oct.2006)
18 qtr. DOWN phase would mean a #6 Peak Q1/Q2.2005, a Low maybe: Q3/Q4'06

10-12 YEAR CYCLE?:
US Property showed peaks in: 1972?, 1983?, 1993, 2005?

[energyi] 24/8/2005 16:05

Right. A bounce from oversold

[scarface01] 24/8/2005 15:58

short covering today

[energyi] 24/8/2005 13:00

The boom may be cooling
Existing home sales fall more than expected though prices keep rising;
are housing's best days over? August 23, 2005: 2:37 PM EDT
By Chris Isidore, CNN/Money senior writer
NEW YORK (CNN/Money) - Sales of existing homes slowed in July from
their record pace as the latest reading on the strength of the real estate
market came in below Wall Street forecasts.

The National Association of Realtors (NAR) said sales of existing homes
fell to an annual rate of 7.16 million in July from the revised 7.35
million sales rate in June. The pace of sales in July was still the third
strongest month on record. Economists surveyed by Briefing.com had
forecast the pace of home sales would slip to 7.25 million in July.

"This is a big number any way you slice it, and housing is continuing
to stimulate the overall economy," said a statement from David Lereah,
the trade group's chief economist. The 7.16 million sales pace trailed
only June and April 2005, when sales came in a 7.18 million rate. Still,
the weaker-than-forecasted number, coupled with growing attention about
the importance of the real estate market to consumer spending and the
economy, sent stocks lower on Wall Street.

"Reading through the housing tea leaves suggests that the housing boom
is becoming a bit long in the tooth," said Anthony Chan, senior
economist with JP Morgan Asset Management. "And while this outcome does not
necessarily signal a collapse in activity just around the corner, it does
suggest that the housing sector's best days are probably behind us."