Thursday, December 14, 2006

update wci and their flagship "one bal harbour"

readers of this blog know that i´m very very bearish on wci. wci is a builder that has its focus on building condos. to make matters worse, they are heavily depending on the florida market. not a very good combination these days.......(watch how overdeveloped miami is!).

they are betting big on their flagship "one bal harbour" that is officially (last wci conference call) 100% sold.

please make sure you read the data from the latest quarter with the conference call to se how depressed the situation is.

this is the chart just the past 5 days compared to toll brothers and the index. looks like something isn´t working in favour for wci......

i think the problem could be relatet to their "one bal harbour / list condoflip" project that they are betting on.

there are 94 units from 260 available for sale. maybe 100% officially sold but with more and more buyers defaulting on their contracts (wci estimates a very low rate with 5%, last quarter 20%! the underlying deposit is an avergae 18%. pretty good option to defaulu on when you look at the condoflipinventory.....)
i think with this kind of competition from flippers or in this case floppers wci will have to make big big discounts to sell (if they can sell at all) this defaulting units/contracts ......
and even condoflip shows that there is still inventory from wci "these are either units being resold by the original buyers or are still part of the developers
on top of the problems for wci is that they want to close 1 or 2 more towers in the fisrt quarter 2007. (read the call)
"mishs " Auctioneer's Perspective" shows how quick and ugly the market has changed.
disclosure: short wci

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