Collateral Damage To The Housing Slowdown
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Today in separate reports two construction supply companies are reporting much lower earnings as new construction is finally slowing. Both Norbord, who make oriented strand boards (OSB) and USG, maker of wallboard, are showing significant earning decreases.
While this is tough for the companies and their employees it can not be much of a surprise. They loaded up during the housing boom knowing that the trend would not last forever. Now that we are absorbing the excess inventory sales will dip. If the budget guys upstairs at these companies have not accounted for the boom and bust cycle it is their own fault.
We are clearly in a steep recession that will continue for some time,” USG Chairman William C. Foote told analysts during the earnings announcement Tuesday. The weak market caused wallboard prices to drop 35 percent, to $122 per thousand square feet, from a year ago. USG’s net income in the third quarter ended Sept. 30 fell to $7 million, or 7 cents a share, from a year-ago $153 million, or $1.71. Sales dropped 9.7 percent to $1.34 billion.
Norbord reports loss as US housing market worsens
Norbord, which makes products such as oriented strand board (OSB), which is used in construction, reported a loss of $1 million, or nil cents per share, compared to a year earlier profit of $7 million, or 5 cents a share.
The company said it does not expect near-term relief from housing market pressures in North America.
“Without question, the North American OSB industry is facing a period of prolonged weakness due to the combination of much lower U.S. housing starts, tighter mortgage lending conditions and the addition of new OSB capacity to the market,” said Chief Executive Barrie Shineton in a statement.
It probably is a really good time to buy real estate - monthly payments are about equal to market rents ...
The part about the inventory is right on but in my area they are mostly low end and beat up ...
I worked for this man, he is a great con man and has done this in more than States then ...
You're right. If you come from Central Jersey (as the Boss and I do), you go to Florida at some ...
Maybe it was kryptonite...
ECONOMIC REPORT
'Prolonged' recession, higher joblessness seen likely
NABE survey indicates most economists now believe U.S. recession's started
By Mike ...
I couldn't agree more.
The newspaper has always "stuck" it to the real estate agent with rates that were much higher ...
By the way, homeowners trying to get short sale approval should be aware that lenders are comparing the initial loan ...
Ouch! Thankfully I haven't come across anything like that yet. We normally don't have situations like that in ...
well, the guy was here illegally.
serves him right. 
BY USING FIRST CLAIM INSURANCE ADJUSTERS YOU WILL HAVE THE ABILITY TO LOOK AT YOUR INSURANCE SETTLEMENT AND REALIZE FIRST ...
Comment by Darren Kittleson on 24 October 2007:
Great post. I’ve been a high end custom home builder for the past 13 years and have NO sympathy for these businesses. They virtually raped us in pricing increases during the boom years. They restricted supply to the point that we had no choice but to pay their outrageous prices. Unfortunately who’ll get hurt the most in this is their employees. These men and women, I’m sure, gave it their all during the BOOM times. Now they may find themselves jobless.