Housing results remain ugly; start doing your homework

Posted Sep 26th 2007 2:05PM by Eric Buscemi
Filed under: Lennar Corp'A' (LEN), Housing

Any way you slice it, the housing industry data remains very ugly. Yesterday, the day started off with the Standard & Poor's/Case Shiller national home price index showing a month-over-month drop of 0.4% in July from June, and a year-over-year decline of 3.9%.

This was followed up by data points from Lennar Corporation (NYSE: LEN) which were simply not good.

Revenue fell 44%
41% drop in the number of home deliveries
6% decrease in the average sales price of homes delivered in 2007
Construction starts were down 62% year-over-year

Wow! Talk about poor results. While it is definitely still too early to buy these stocks, the numbers are so bad that it is time for investors to start doing their homework. The slicing of home inventories and the huge write-down of land for new construction means the industry is aggressively cutting back on inventory. This means we should see things begin to stabilize in the next twelve to eighteen months.

Tags: construction, housing, inthenews, inventory, len, lennar