Home builder posts first loss in decade

The Boston Globe reports:

By Bloomberg News | January 3, 2007

Lennar Corp., the fourth-largest U S home builder, had its first quarterly loss in at least a decade after it wrote down property investments and relinquished part of its stake in a firm that controls 15,000 acres in southern California.

The loss in the fiscal fourth quarter was 88 cents to $1.28 a share after a pretax charge of as much as $500 million, Miami-based Lennar said yesterday in a statement. Quarterly profit was $3.54 a share a year earlier.

Home construction companies have been left with more land than they need and more homes than they can sell as the housing market deteriorated last year. Sales of new homes tumbled 15 percent in November from the same month last year and the number of homes completed and waiting to be sold rose 51 percent to a record 169,000, according to the Commerce Department.

"Market conditions continued to weaken during the fourth quarter, and we have not yet seen tangible evidence of a market recovery," chief executive Stuart Miller said in the statement.

This is a significant story.Obviously, the demand for real estate is going down.Interest rates don't seem to be much of a factor in the last 12 months.