 |
| 30 Yr Fix |
6.37% |
0.02% |
| 15 Yr Fix |
5.91% |
-0.01% |
| 1 Yr ARM |
5.17% |
0.00% |
| 5/1 ARM |
5.82% |
0.04% |
| 30 Yr Tres |
4.47% |
-0.05% |
| Fed Prime |
5.00% |
-0.25% |
|
|
|
|
 |
Free Subscription To News Alerts
Stay up to date on breaking news with our free News
Alert Service. |
|
|
Lennar and D.R. Horton Move To Staunch Housing Hemmorage
5310
Views - Printer Friendly - Email
This Story To A Friend
Lennar Corporation, the second largest home builder in the U.S. announced
on Tuesday that it was posting stunning losses for its third
quarter of 2007 which ended on August 31.
According to Reuters, Wall Street analysts had been expecting losses but in
the vicinity of 0.55 per share. Instead the returns came in at a loss of $513.9
million or $3.25 per share. One year ago the company had posted a profit of
$1.30 per share.
The builder also announced that sales were off 44 percent and that it had cut
35 percent of its jobs over the last year and anticipated further costs would
be necessary.
Like most other big builders and probably a lot of smaller ones, Lennar has
been canceling contracts to acquire land for future building.
In many cases this entails walking away from substantial deposits as well as
early development expenses such as feasibility studies and engineering costs.
According to Sudeep Reddy and Michael Corkery writing in The Wall Street Journal,
"The housing market is going into a deeper chill, and consumers are starting
to shiver."
The Journal stated that one major home builder, D.R. Horton Inc.,
is holding an auction of 53 new homes in San Diego this weekend and some units
will have starting prices half of prices advertised earlier.
On a one-bedroom unit, the starting bid is $149,000, down from a previous price
of $309,990.
The company's CEO Donald J. Tomnitz must have been preparing for this
action for months. He was quoted in March by the Associated Press as saying
that 2007 "is going to suck, all 12 months of the calendar year."
Other market segments that are closely, even loosely tied to housing construction
and sales are beginning to report some distress. Monday, Lowe's
reduced its earnings outlook for this year and Target lowered its estimate for
September sales. In August, Costco Wholesale Corp.'s sales at stores open at
least a year rose just 1%, much below an earlier forecast. According to Erin
Burnett on MSNBC Wednesday, one Home Depot supplier commented this week that
the market is entering uncharted territory with much lower numbers than seen
in earlier housing slumps.
New house sales figures are due from the Census Bureau later today. It would
be nice to hear some good news for a change.
Related Tags
Select a Tag for more information related to that Tag. (View
All Tags)
home builders home prices mortgage meltdown |
Comments (5)
| As a realtor for 16 years, it saddened me to see so many people suffering. But of course, what goes up must come down and hopefully, down won't keep going. The one ray of hope that I find in all of this maylay is that true professionals are gearing up for the battle. But the 'fly by night' crowd, is leaving the fold! I disagree with the comments that "Most people in trouble brought above their means!" Some people are getting hit from the 'ripple' effect. I know I feel as a Realtor.
|
|
| Above Posted By:
Annette
| Fri, 28 Sep 2007 09:01:01 EST |
| The inventory of existing homes was depleted as a result of the subprime lending creating an increase in property value 3 times what they were worth. If you lend 1000 to someone who earns 15 a year to purchase an overpriced property for the 1000 but that property is only worth 500, when will there be a correction if those individuals that purchased beyond their means start to default on the loans. Stop blaming the media. Be realistic. They are only exposing the facts. |
|
| Above Posted By:
jose
| Thu, 27 Sep 2007 22:50:27 EST |
| Ken, an implosion IS what is needed for a correction. There is going to be a lot of housing related pain in the next few years and not because of the media. People like you are what fueled this mess. Step to the plate Mr. Buffet, fund loans for houses that people can't afford with the inevitable consequences. Brilliant! |
|
| Above Posted By:
reidy
| Thu, 27 Sep 2007 13:28:14 EST |
| Sales of soft drinks, fast food, and canned beer is likely suffering, too. The media has done a fine job of slaughtering about 35% of the nation's economy and getting the scaredy pants little investors to run from Wall Street screaming unintelligible combinations of vowels, consonants and grunts. The subprime industry should have *corrected* not *imploded*. There are still viable non-conforming deals on the market and some hero will make billions by stepping to the plate. BILLIONS. Mr. Buffet? |
|
| Above Posted By:
Ken Cook
| Thu, 27 Sep 2007 11:37:06 EST |
| If this were a baseball game it would be about the top of the 3rd,
(extra innings?) |
|
| Above Posted By:
Sid
| Thu, 27 Sep 2007 11:18:50 EST |
Post A Comment
Please fill out the form below to submit a comment.
|
|
NEW VIDEO
|
 |
|
Trump Talks Economy, Oil and Real Estate
|
 |
|
New Evidence of Deceptive Practices at Countrywide
|
|
Why won't the Bush Administration, Senate, Congress concentrate on one thing at a time. Bernanke pointed to deceptive practices as...
Read |
Double appending my last two messages: As I just said to my wife after reading the headlines about Freddie & Fannie going under: B...
Read |
Nobody has been able or willing to mark to market. At this time it is impossible. From what I understand about Paulson, his approa...
Read |
|
