According to this article, that “screw you, no price cuts” plan will probably last a week. Erven the NAHB economists said “2008 will be a year of systematic price erosion” translated, prices will go down. The market psyche was insane on the way up and is now showing some insanity on the way down. Every time they lower prices, less buyers come and more cancel, all thinking the cuts will continue, it’s DejaVu in reverse.
Speaking of saving the builders, what happens when a few biggies fall? I see no way SPF makes it throught the month, it fell another 15% today and it is now earning a negative six dollars per share, twice it’s value. How long can a three dollar stock lose six dollars. I looked at one of the projects today, nice houses, one standing inventory was loaded to the gils, 2500 sq ft, and after incentives, 340k, no closing costs and 5 3/4 fixed. I did exactly what the article said, walked out and thought to myself, it’ll go lower.
