Fourth-largest US homebuilder Centex makes Q3 loss as housing slump deepens
24 October 2007The fourth-largest US homebuilder Centex Corporation has reported its biggest quarterly loss in at least 17 years after writing down the value of property, as the housing recession intensified.
The net loss in the quarter ended 30 September was $643.8 million or $5.26 a share, compared with a net income of $137.4 million, or $1.11, a year earlier. Second-quarter revenue fell 21 per cent to $2.2 billion. Centex recorded $983 million in land writedowns and charges and said its cancellation rate was a staggering 35 per cent.
The company says it has "meaningfully reduced prices in order to improve affordability for our home buyers". September home sales are forecast to fall to a seven-year low as lenders tighten credit standards. Defaults doubled last month from a year ago.
Homebuilders are having to contend with a more than eight-month supply of unsold homes, the most in at least six years, and are cutting prices to clear inventories. Centex is projected to have a net loss of $5.52 a share, according to Wall Street analysts.
Pulte Homes Inc, the third-largest US builder, and Ryland Group Inc, a large builder, will declare quarterly results on Wednesday 24 October. Pulte is forecast to report a net loss of $1.18 a share. Ryland may report a net loss of $1.06 a share.
Total purchases of new and existing homes fell to an annuallised pace of 6.02 million, the fewest since August 2000. Centex said the average sale price for a home sold in the quarter was $280,816, down 8 per cent from $305,201 a year ago.
median price for a house sold in Dallas, Texas, in September
was $160,300, up 6 per cent from $151,200 a year ago,
according to the Real Estate Centre at Texas A&M University
in College Station, Texas. The median price in the Riverside-San
Bernardino area was $377,130 in August, a 7.4 per cent
decrease from a year earlier, according to the California
Association of Realtors.