Well, it was starting to happen and now it's prevalent: National Homebuilders have lower profits and see no home price stabilization in sight. From Marketwatch, Lennar reported first-quarter net earnings of $68.6 million, or 43 cents a share, for the three months ended Feb. 28, down 73% from the $258.1 million, or $1.58 a share, earned in the year-earlier quarter. Revenue overall dropped to $2.79 billion from $3.24 billion as revenue from home sales fell about 10% to $2.62 billion. Orders were down nearly 30%
In a maverick move and one in which I applaud, Lennar withdrew its previously (read Jan '07) stated target of topping 2006 numbers, and going as far as not issuing new guidance. I applaud this move because with the housing bubble bursting, instability of home prices, unknown land impairments, increased difficulty for buyers to qualify for loans, and increasing inventory, any homebuilder trying to issue numbers would be trying to pin down a moving target.
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