Which Home Builder Will Go Bankrupt First?
Posted: November 12th, 2008 | Author: admin | Filed under: Uncategorized | 6 Comments »
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In this economic environment, it is truly impossible for home builders to make any profit. The excess inventory and poor economy has lead to troubled times for every single home builder. Inventory levels reached a record high in the month of October. The National Association of Realtors reports there are 4.4 million houses on the market which would take 10.5 months to sell off the backlog of homes.
The 10.5 month number is a national average. There are some states in which this number is in excess of 15 months and some cities have 30 months or more! With this in mind, one must ask the question; who will be the first major home builder to file bankruptcy or be forced to merge? Some major candidates include:
Hovnanian Enterprises – Has lost over $1,124,000,000 in the last year
Beazer Homes – Has a Return on Equity of -54.37%
Standard Pacific – Has a Return on Equity of -95.34%
Lennar – Has lost $3,079,000,000 in the last three months alone!
Pulte Homes – Has a Net Profit Margin of -26.91%
What are some other home builders you feel will go under? Have any of the home builders in your market already merged or filed bankruptcy?
This post rips the gut out of any optimism for the economic future for the U.S. Each one of the entities is tied with innumerable vendors that will not get paid. And this is only the beginning. The tidal wave of economic bankruptcy, I suspect, will be greater and more complete than the Great Depression; I suspect the Federal government will go bankrupt, also. Congratulations would eventually be in order for Senator Dodd, Rep Barney Frank, et al. All of them illustrious Democrats.
[...] In this economic environment, it is truly impossible for home builders to make any profit. The excess inventory and poor economy has lead to troubled times for every single home builder. Inventory levels reached a record high in the .. Read more [...]
Maybe these companies should have gone bust already. Who knows how realistic their evaluation of their land banks are?
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Just imagine how realistic they are…..
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