Reading today's local newspaper I see that Beazer slashed $100,000 off some of their homes. I would be very upset if I lived in on of these neighborhoods.
Here is a report from this mornings WSJ.com that takes a look at some of the previous, BS, er.. bullish comments made by industry insiders.
Recently, the nation's largest home builder, D.R. Horton Inc., reported the first quarterly loss in its 15-year history as a public company.
Yet, only two years ago, Donald Tomnitz, Horton's chief executive, declared confidently: "We can earn our way through any economic cycle, except one like the Great Depression." The Great Depression hasn't hit -- but Horton's earnings have declined more severely than most anyone imagined.
Another big home builder, Beazer Homes USA Inc., was beset by rumors the past week that it might be filing for bankruptcy-law protection. Beazer firmly denies the rumors. Still, housing analysts are fretting that banks will clamp down on lending to some builders -- squeezing them of cash just when they might need it.
In theory, this should have let builders buy land only when they needed it, while giving them the right to walk away if they didn't need it. The builders would also be helped by the overall scarcity of developable lots in many markets, Citigroup analyst Stephen Kim wrote in a bullish March 2006 research report.
"The linchpin to our bullish thesis has been the emergence of land constraints," Mr. Kim wrote at the time. "This will allow the builders to outperform expectations in any given demand scenario."