Quotes Of The Day
"We're trying to stay alive." - Mick Pattinson, CEO of Barratt American, a private California builder. Pattinson says the company is scraping by with reconstruction work in fire-damaged parts of San Diego and a few custom home orders. (LA Times, July 24th)
"As long as we attach importance to housing starts as a statistic, we will continue to see the development of single-family freestanding houses as a positive contribution to the economy. That in itself leaves aside the issue of ecology.” – University of Texas architecture professor Wilfried Wang, Wang thinks if builders want to save the planet, they should stop building completely and just focus their energies on retrofitting existing buildings to be energy efficient. (WRCB TV, July 20th)
Home Builders Battle To Survive. California: “Many small builders are struggling to stay in business, and larger, publicly traded development companies are reeling under huge losses as lenders tighten credit and housing sales stall. On Wednesday, Ryland Group (NYSE:RYL) of Calabasas reported a second-quarter loss of $241.6 million, seven times higher than the average analyst estimate. The Ryland loss followed a report earlier this week that June housing starts were down 44% in California from a year earlier. Mick Pattinson, CEO of Barratt American, a private California builder. Barratt American, [which] builds in San Diego County and the Inland Empire, is down to 40 employees, from a high of 140.” (LA Times, July 24th)
Arizona Builder Offers Remodeling to Past Customers. “Fulton Homes in Tempe, Ariz…. has been offering its remodeling service, through a company called Fulton Interiors, for about six weeks to owners who have purchased homes from the company over the past three decades. As demand for its new homes languishes—Fulton expects to close around 500 homes this year, versus 636 in 2007, 2,500 in 2005, and 1,500 in 2001—remodeling is putting to greater use a 30,000-square-foot design center that Fulton Homes opened 18 months ago… Fulton offers financing through Fulton Homes' mortgage division (a joint-venture arrangement with Wells Fargo).” (Builder Online, July 23rd)
Davis Homes Shuts Down. Indianapolis: “One of the state’s largest local homebuilders ceased operations today… Davis Homes joined more than 30 homebuilders nationwide that have discontinued operations since 2007. The builder said it has secured warranty insurance so Davis homeowners will be covered. It also has arranged for regular maintenance and is looking for other homebuilders to complete its neighborhoods… The company’s count of new-home permits dropped 70% since 2004. The firm filed 15 permits in Q1, down from more than 80 during Q1’07. As of May, it had 30 employees, after shedding more than 170 workers since its peak in 2001.” (IBJ.com, July 23rd)
Regions' Profit Stung by Fla. Real Estate. “Regions Financial’s (NYSE:RF) second-quarter earnings… delivered net income of $206.4 million or $0.30/diluted share; analysts had forecast $0.42. The earnings still missed expectations… The bank earned $453.3M in Q2’07 and $336.7M in Q1’08… The Florida housing market, struggling homebuilders and problematic home-equity loans were to blame for increases in loan charge-offs. The net loan charge-offs for Q2 were $209M, [vs.] Q1’s $125.8M… The loan-loss provision came in at $309M, and total nonperforming assets were $1.6M vs. $1.2 billion in Q1. The increase was attributed to homebuilder and condominium loans. Florida has a glut of condos [and] homebuilders can't complete their projects or start new ones.” (The Street, July 22nd)
California Adopts Statewide Green Building Code. “California on Friday became the first state in the nation to adopt a statewide code for green construction practices. Members of the California Building Standards Commission voted 10 to 0 in favor of new provisions mandating reductions in building energy use, conservation of potable water, job-site erosion control, recycling of construction waste, and a range of steps to improve indoor air quality.” (Builder Online, July 21st)
Gas Cards: The Hottest Incentive for New-Home Sales. “It’s tough enough to get prospective home buyers to get in their cars and visit a model home without $4-a-gallon gas prices. To encourage buyers to hit the highway--or to motivate them to consider a neighborhood that will require a commute--builders are turning to gas cards. Kimball Hill Homes is running a promotion through the end of July offering a $50 gas card to prospective buyers who visit a neighborhood and pre-qualify for a mortgage… Lennar Homes (NYSE:LEN) offered a Summer Sales Drive promotion; visitors to its 15 communities in the division could register to win a $1,000 gas card.” (Builder Online, July 16th)
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