[B]Bailout For BuildersóAre They Next In Line?[/B]
Posted By: Diana Olick | CNBC Real Estate Reporter
cnbc.com | 18 Nov 2008 | 04:24 PM ET
Home builder confidence has fallen to yet another record low. No surprise there, but in reading the release from the National Association of Home Builders on its sentiment survey, I had to wonder about one particular measure of the index.
The NAHB breaks the index down by current buyer traffic, current sales, and prospective future sales. Both buyer traffic and current sales fell to new historic lows, but future sales expectations remained the same, significantly higher than the other two. What exactly is making the builders think things will be any better in six months?
So far the Treasury has done nothing with the TARP money to mitigate foreclosures and in fact the Treasury Secretary today reiterated his opposition to doing just that. FDIC Chairman Sheila Bairís plan to guarantee modified loans with TARP money is getting plenty of play on the Hill, but little action. And the home buildersí own plan to get the government to subsidize really low-interest rate loans for a year in order to spur home buying hasnít gained much momentum.
Iím all about the hope, but Iím also all about talking to the builders, and I donít see a whole lot of hope there. On Election Day I moderated a panel of three builder CEOs and the Big Builder í08 Conference. Two were CEOs of public companies, one private. None of them had anything particularly hope-inspiring to say, and all of them spent the bulk of the time pushing their agenda for a bailout. I donít blame them, seeing as buyer confidence is lower than ever and home prices have yet to hit the water.
New construction represents far less than a quarter of the total number of homes currently for sale, so I guess a bailout for builders will have to come second to a bailout for the overall housing market. But as I sit here watching a hearing about a big bailout for the automakers, I wonder if the home builders arenít just waiting in the wings.
Breaking News: jetstream23 has declared himself a bank holding company and is now applying for money from the TARP. Citing "systemic risk" to the internet if he were to go bankrupt, jetstream23 is seeking [I]only[/I] $500M, a small percentage of the total TARP money.
Get on the bus, fellas! :D
Last edited by jetstream23; 11-19-2008 at 11:06 AM.
[QUOTE=jetstream23;2870390]Breaking News: jetstream23 has declared himself a bank holding company and is now applying for money from the TARP. Citing "system risk" to the internet if he were to go bankrupt, jetstream23 is seeking [I]only[/I] $500M, a small percentage of the total TARP money.
Seriously, the line outside Pelosi's door is probably a mile long with automakers, builders, airlines, restaurants and dog groomers...all of whom are trying to argue that they need to be rescued![/QUOTE]
It will be really interesting to see who actually gets the money and how indebted they will be to the politicians who vote yes.