If you were to look at a recent chart of the performance of Standard Pacific (NYSE:SPF), DR Horton (NYSE:DHI) and Toll Brothers (NYSE:TOL), it may not appear that they're in a honeymoon period, but when coupled with the pressures related to the foreclosure supply, they've actually caught a break even while their share prices struggle.
It's the same of course with other home builders as well.
But there's no holding back the inevitable wave of growing foreclosures which will hit the market, even with attempts to slow it down by the government, which is only hurting the market, not helping it.
Hurting the market because of homes sitting there without someone in them while the process is grinding slowly along. That means those homes may be unable to be sold once things clear up. That's why the home builders have temporarily caught a break as the number that should be on the market aren't, but that will release, and when it does, they'll not only struggle, but be unable to compete with the much less expensive properties on the market than they can build.
It's questionable whether these companies will be able to survive; or at least the majority of them.
There is also the artificial props of QE2 and so-called Federal stimulus winding down, and that will further exasperate the situation.
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