Builders' Stocks: Too Cheap Not to Own

D.R. Horton(DHI Quote) reported decent numbers Wednesday, and most importantly, its unit orders were up 28%. However, the bears are not writing about these orders the same way they commented on Toll's(TOL Quote). Horton delivered 50,000 homes, compared with 9,000 for Toll. Now, you tell me what's happening in the housing market.

I don't think that many investors, not even the sell-side analysts, are aware that what really happened at Toll was a management mistake. They simply filled out existing communities too quickly last year. That maneuver gave them monster numbers then, but is a big problem today. Don't base your opinion of a $200 billion industry on Bob Toll's comments. Look at the entire group.

Hmmm. Horton orders up 28%, Beazer(BZH Quote) up 15%, Hovnanian(HOV Quote) up 38% and Pulte(PHM Quote) up 20%. What am I missing? Seems as if most of the large public builders are managing the current slowdown just fine.

I know that the real estate bull market is over. I have been incorrectly forecasting this for five quarters now. It's about time. Housing demand and prices have flattened. But if you keep reporting that as news, you need to buy a clue. ...