Lennar Corp Class A (LEN)

[PennyP1cker]

LEN is in the hottest markets which I think is key to a successful 2018. If you look at KBH or TOL you will see that they are on the fringes of some of the hottest markets but, unless I am missing something, they are not in the heart of the very hottest real estate markets like LEN and other competitors. This bodes well for LEN. As long as LEN can continue to divine which markets will be the hottest and avoid getting trapped in downside markets it should be a great year. What makes a hot market? High demand mostly but low supply can be a contributing factor. Here in California, we are experiencing very tight market conditions. There are very few existing homes on the market and many buyers ready to pounce on anything that moves. Anyone can put their house up for sale for any price within reason and it will sell like a hot cake in December. If LEN cannot capitalize on these market conditions I will be astounded.

For those worried about interest rates, I disagree that higher rates will be a problem. LEN operates like a bank and makes money on higher interest rates as long as they don't rise too high too quickly. Lawrence Yun, prominent economist, recently stated on NBR that 6% would be a possible tipping point where drag would be introduced.