The major homebuilders all look like they felt that they could accelerate through the housing crash and gain market share from their competitors. If all the others had pulled back and 1 went through the wreck (to use a NASCAR analogy) that company might have done well.

Instead we are looking at all of the home builders putting the pedal to the metal and now what may have been a small crash is looking like “The Big One” as they all wanted to be heroes.The Big One for those who do not know is a big crash at a super speedway that collects all of the competitors who are racing in a tight pack. Since no one wants to back off when things get rough, they all have their cars beat up or destroyed. 

So to keep this racing analogy going, we are  going to have to red flag the race (park all the cars) until the track can get cleaned up. And the Lennar car driven by Stuart Miller looks like a total wreck.

The national homebuilder Lennar came out with their third quarter earnings report and the results were ugly. Of course, anyone who can spell real estate was expecting this as the market is saturated now that the speculators have gone home and the buyers are nervous.

But I guess that you do not know how to spell real estate if you are an executive at Lennar. It took an earnings report like this for them to take the foot off the gas pedal and start cutting back on expenses and staffing.

Lennar, whose sales for the period fell 44 percent, also said it had slashed jobs by about 35 percent and that further cuts would be necessary.
The loss for the third quarter ended on Aug. 31 was $513.9 million, or $3.25 a share, compared with a year-earlier profit of $206.7 million, or $1.30 per share.
Wall Street analysts on average had expected a loss of 55 cents per share, according to Reuters Estimates.
“Our third-quarter results on their face are disappointing. Nevertheless, they’re part of a program to reflect the harsh realities of a very difficult market condition,” Lennar Chief Executive Stuart Miller said in a conference call with analysts. via Reuters

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