Interest Rate Roundup

Tuesday, November 06, 2007

More housing dispatches -- falling orders, rising writedowns

We're getting some more color on the housing and mortgage markets from a bunch of builders and lenders. So let's quickly go through the news ...

* Florida landowner and developer St. Joe said it lost $6.8 million, or 9 cents a share, in the most recent quarter. A year ago, it earned $6 million, or 8 cents a share. Sales dropped 36% and the firm took pretax losses of $20.4 million to write down the value of land, future home sites, and a wood products plant.

* Hovnanian Enterprises released some preliminary data about its performance in the fiscal fourth quarter that ended October 31. The company said net contracts dropped 10% from a year earlier, and that the cancellation rate climbed to 40% from 35%. It also noted that October was an ugly month, saying "the sales pace in most of the company's markets significantly deteriorated when compared of the sales pace of recent months."

* Beazer Homes, for its part, said it will take charges of up to $230 million to account for the reduced value of land. The firm said new home orders plunged 53% in the fourth quarter, and that its cancellation rate surged to 68%.

* Finally, embattled mortgage lender IndyMac Bancorp said it lost a hefty $202.7 million, or $2.77 per share, in the third quarter. The company had forecast a loss of up to 50 cents per share. It slashed its dividend in half and announced more than 1,500 layoffs. CEO Michael Perry dubbed this "the most severe downturn our industry has experienced in modern times."


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