What's the Deal With Kara Homes?
A few posts ago, some readers were reporting that they heard that Kara Homes was on the verge of a bankruptcy filing. If anyone has any information regarding Kara Homes, I would like to hear about it. Also, someone else said that all of Kara's Tradewinds' homes in Sea Bright were bought in a single transaction. Does anyone have any information about this too?
Finally, from my own observations, I don't think that the Kara development in Navesink (on rte. 36) is doing very well. From what I can see, there are still a lot of homes for sale and the entire project does not seem like it is fully constructed yet.
Finally, from my own observations, I don't think that the Kara development in Navesink (on rte. 36) is doing very well. From what I can see, there are still a lot of homes for sale and the entire project does not seem like it is fully constructed yet.
posted by Little_Silvered at 8:50 PM
24 Comments:
Click: Some Homebuilders stocks hits Year-low today
Housing prices should follow downturn in home builders` stock price too !!!
those home aren't selling for a varietty of reasons, such as a weak housing market, poor location, high priced, terrible marketing, wierd covenents. The homes are too big for the projected market and built too close together. Whomever dreamed up the plans for this place should get out of the home building business
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"terrible marketing"... no kidding - why are they spending money flying airplanes with banners over the beaches. I don't see anyone jumping out of their chairs and running off the beach to go spend $999k on a luxury home.
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Uncontrollable flatulence observed at Kara Homes board meeting! They’ve eaten the fish and it is BAD!
Now the questions is how do YOU profit from this problem?
First, get massively short the stock; sit home in your closet and rock back and forth while praying like a crack monkey.
Second find the area you want to live in. If there are unsold homes by these builders of these McCrapsions the pricing pressure will force other worthy homes that have to sell to come under pressure. Wait and low ball. You might get lucky or you might find yourself bitching and moaning a few years from now on how you missed the dip!
If you already ate the fish, drink the cool aide!
Anonymous Dave
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Anon dave -
I think Kara is a privately held corp. This is one reason why there's so little public info. Wall Street is only marginally interested.
I agree with this. I know a few of the "small time" money guys in this. A bunch of guys who get their money from daddy. These guys are pathetic.
I think Kara is a privately held corp. This is one reason why there's so little public info. Wall Street is only marginally interested.
fyi: D.R. Horton quarterly orders fall, cuts forecast
Thu Jul 13, 2006 6:46 PM ET
By Ilaina Jonas
NEW YORK, July 13 (Reuters) - D.R. Horton Inc. DHI.N>, the largest U.S. home builder, said on Thursday that quarterly orders fell 4.4 percent, prompting the company to slash its forecast as the largest U.S. home builder succumbed to a deteriorating market.
Not even price cuts could save Horton from the forces of higher mortgage rates and a rising inventory of unsold homes.
"It's pretty brutal out there," JMP Securities analyst Jim Wilson said. "The strategy they're trying is to move product no matter what it takes. Their margins are getting clobbered."
The news sent Horton's shares down by nearly 9 percent in after-hours trading on the Inet brokerage system and swept other home builders along with it.
KB Home KBH.N> shares were off 3.5 percent at $40.20 and Toll Brothers Inc. TOL.N> were off 2.4 percent at $23.97
Horton's shares have lost more than half their value since last year.
In the fiscal third quarter ending June 30, orders for new homes fell to 14,316 from 14,980 a year earlier. The value of the new orders fell even more, down 7.4 percent in the quarter ended June 30 to $3.83 billion.
"The current home sales environment is characterized by an increase in both existing and new homes available for sale, higher than normal cancellation rates and an increase in the use of sales incentives in many of our markets," Donald Horton, the company's chairman said.
The company said it sees the third-quarter earnings of 93 cents per share, well below the $1.30 analysts had expected, according to Reuters Estimates. The new outlook includes write-offs totaling 11 cents per share.
Horton also cut its outlook for the fiscal year ending in September to at least $3.65 per share down from its prior forecast of $5.25 to $5.35. Analysts expected Horton to post earnings of $4.96 for the year, according to Reuters Estimates.
Horton, based in Fort Worth Texas, also reduced the forecast for the number of homes it expects to sell in the year to 50,000 down from 58,000.
The Southwest was the only one of Horton's five regions to see orders rise, up 12 percent.
In after-hours trading on Inet brokerage system, Horton shares were at $20.80 down from their close of $22.86 on the New York Stock Exchange.
Since the beginning of the year, Horton shares have lost 33 percent of their value, while the Dow Jones U.S. Home Construction Index .DJUSHB>, a wide barometer of home building stock activity, is off 35 percent.
real estate goes down 40% before it can go up 10%...it's getting really bad out there. This is just the beginning of a 5-7 year bear market in real estate.
Alert !!!
Roof Collapses at Horton
By Nicholas Yulico
TheStreet.com Staff Reporter
7/14/2006 9:57 AM EDT
Click here for more stories by Nicholas Yulico
D.R. Horton (DHI - commentary - Cramer's Take) fell more than 9% Friday after it reported a drop in third-quarter new-home orders and slashed its full-year earnings forecast.
The largest U.S. homebuilder said that its orders for the quarter ended June 30 fell 4.4% to 14,316 homes from 14,980 a year earlier. The value of the homes sold dropped to $3.8 billion from $4.1 billion.
The company expects to post third-quarter earnings of 93 cents a share, well below analysts' average estimate of $1.30, as compiled by Thomson First Call. The company's forecast includes about 11 cents a share in write-offs related to land option contracts.
"The current home sales environment is characterized by an increase in both existing and new homes available for sale, higher than normal cancellation rates and an increase in the use of sales incentives in many of our markets," said Chairman Donald R. Horton in a statement.
For the full fiscal year, D.R. Horton sees earnings of at least $3.65 a share, compared with its earlier forecast of $5.25 to $5.35. Analysts target full-year earnings of $4.92 a share.
"We think the sharp deterioration in earnings throughout the end of fiscal 2006 likely reflects sharply lower closings and significantly lower margins," Bank of America analyst Daniel Oppenheim wrote in a research note.
He estimates the company's gross margins will fall to 16.2% in the fourth quarter of this year, down from 25.2% in the fourth quarter of 2005.
Oppenheim cut his 2006 EPS target on Horton to $3.65, down from $4.85, and slashed his 2007 target to $1.85, from $2.55, due to faster-than-expected margin declines.
Horton's sentiment echoes warnings from across the industry as builders ratchet down their fiscal 2006 estimates. Several major homebuilders, including Toll Brothers (TOL - commentary - Cramer's Take), KB Home (KBH - commentary - Cramer's Take) and Pulte (PHM - commentary - Cramer's Take), have cut their fiscal-year guidance in the past two months.
Shares of Horton fell 9.1% to $20.77 early Friday.
In other builder news Friday, Raymond James released a report that said contracts for housing sales fell 42% year-over-year in June in the greater Washington area, according to an area realtors groups. Closings declined 38% and the inventory on the market now represents 7.1 months of supply, compared with 1.6 months in June 2005, and 5.9 months in May.
"We continue to believe the Washington, D.C., market is headed lower as excessive speculation and overbuilding will weigh on the market for the foreseeable future," Raymond James analyst Rick Murray wrote.
Public homebuilders that have a major presence in the market include NVR (NVR - commentary - Cramer's Take), Toll Brothers and Hovnanian (HOV - commentary - Cramer's Take).
There was a report from Kara Homes on the front page of the Asbury Park Press Real Estate section this past SUnday, (yesterday) where they report that 2006 sales and I think this past quaters sales have beaten or met their estimates.
Hey Fellow, you have a top-notch blog here!
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Good luck!
its no wonder to me i was employed by kara homes an being in the home building busines for 30 year they were consumed by an inexperience in hiring any knowledgeable personel from the head down i had jury duty and the word from some title searcher i know they went bankrupt the week of the first of august
also i might add to the comment above the staff was dumb and inexperienced plus they didnt pay there subs there neglegence for not walking the houses when being built plus most didnt know something was wrong when they looked at it that was pitiful the homes in south jersey are sickning and a joke
this was totoly by design for a fact zudi said at a meeting that they didnt think this was going to last as long as it did and the dumbies at the meeting all clapped that said it all don former project manager at winding run job
Hey...I heard the same thing about filing bankruptcy in August also. They are into my company for 300k for services, we'll see if they pay or if we get 30 cents on the dollar. They are private nad grew way to fast and hired a bunch of idiots along the way. We went thru project managers like water.
Kara is a privately held co., no stock involved. The jury duty/bankruptcy thing is BS, they are still functioning as of today, at least.
Fuctioning yes.....but paying their bills, trust me. They are into my company for 300k...
Thats NOT paying their bills
i feel sorry for any subs i worked for them i used to tell them to watch out they screw u in a minite as for the fool that said there not bankrupt your a dumb ass because there done dead and zudi took all and going to run
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