Homebuilder Trends: Bankruptcies, Psychotherapy And More Model Homes [Housing Tracker]

Link of the Day

The Arizona Department of Real Estate has posted a list of home builders in bankruptcy and others having financial problems on its Web site. Go to http://www.azre.gov/. 

Quote of the Day

 “The fastest way to get back is to get some emotional help.” - Tony Perry, who sought bankruptcy protection in December for his Oakwood Homes and who is a self-described “recovering builder.”  (Atlanta Journal Constitution, Aug. 25)

Homebuilder Trends

Builders Regroup As Market Searches For A Bottom. Arizona: “A few Valley-based homebuilders have filed for bankruptcy… And others… have walked away from empty lots, model homes and entire subdivisions… Last week, Woodside Homes was forced into bankruptcy by its creditors… In November, Engle Homes' Florida parent TOUSA (TOA) filed for bankruptcy. Then early this year, Valley builder Trend Homes filed for Chapter 11 reorganization. It was purchased by Phoenix-based Najafi Cos. More recently, several Arizona subsidiaries of Stratland Enterprise filed for bankruptcy, as did Scottsdale-based Charlevoix Homes. A few home-builder land bankers, including Taro Properties of Arizona, also have gone into bankruptcy. Several Valley subdivisions have been foreclosed upon, including four being developed by Phoenix-based builder Randall Martin Homes.” (Arizona Republic, Aug. 31)

Scottsdale Company Capitalizes On Alt-Energy Momentum. “The 30% tax credit for wind and solar projects expires this year, and the credit hasn't been renewed despite several attempts in Congress… In Q2’08, the association reports the U.S. installed 1,194 megawatts of wind turbines, enough electricity to power nearly 300,000 homes at once and more capacity than the coal-fired Cholla Power Plant near Holbrook, [Arizona].The association expects at least 7,500 megawatts (almost double the capacity of Palo Verde Nuclear Generating Station) to be installed by the end of the year. That's enough for 1.8 million homes at once.” (Arizona Republic, Aug. 31)

Industries Contribute To Area Youth. “Two Southeast High School Future Builder of America graduates received scholarships over the summer. Isaac Lima received $1,000 from the Florida Home Builders Association Foundation and an additional $800 as a Home Builders Association of Manatee County Lloyd Williams Scholarship recipient. Lima is enrolled at University of Central Florida in an engineering program. Both scholarships are given to graduating students who want to pursue a career in some facet of the building industry.” (Bradenton Herald, Aug. 31)

Builder Says It Will Continue Work During Bankruptcy Case. “Last week, a group of creditors led by JPMorgan Chase Bank  (JPM) forced California-based Woodside Homes Corp. and nearly 200 affiliated entities into involuntary Chapter 11 reorganization proceedings, claiming the company owed them more than $700 million in bank, bond and note debt. Woodside's 2007 revenue totaled about $1 billion, down from $1.3 billion the previous year… Woodside's financial problems are partly the result of its large land holdings, whose value has declined significantly in recent months... Woodside has four communities in Phoenix and one each in Tempe, Mesa, Chandler, Queen Creek and Litchfield Park.” (Arizona Republic, Aug. 30)

Home Builders Plan Fall Parade Of Homes. South Dakota: “The Home Builders Association of the Sioux Empire will present its Fall Parade of Homes from Sept. 13-16. More than 85 homes will be featured, showcasing state of the art design and technology, the association said in a press statement. Featured homes, ranging from $135,000 to more than $1 million, will be on display in Sioux Falls, Tea, Harrisburg and Hartford.” (Argus Leader, Aug. 29) 

The Silent Boom In Homebuilding Stocks. “The real money is being made in the building materials stocks rather than the builders themselves. Stocks like TREX (TWP) [is] up over a 100% in the last six months. Even boring old Beacon Roofing Supply (BECN) is up an impressive 61% over the last six months… Hill International (HIL) provides consultative and project management services to the construction industry. They get involved with all different types of construction, government and private… Government-funded construction still looks to be in full swing. International heavy industrial construction is still going strong. On the consumer front… instead of buying new, larger or second homes, homeowners are improving their existing homes.” (Teeka Tiwari in Seeking Alpha, Aug. 28)

Therapists Helping Builders Cope During Housing Slump. “This is how bad the home-building slump has gotten: builders are being encouraged to seek emotional support. These men of pickup trucks, nail guns and steel-toed boots are being urged by their local trade association to talk feelings instead of square feet, to hang on their belts the tools of affirmation and positive visioning… The Greater Atlanta Home Builders Association earlier this year began telling its 3,300 members help was available if they wanted it… Every builder seems to know a colleagues swamped in debt, and a few know friends in the business who have taken their lives.” (Atlanta Journal Constitution, Aug. 25)

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