Lennar just posted a $196 Million loss for its fourth quarter 2006 numbers. It wasn't just the end of the year that was bad...after topping the $1 Billion earnings mark in 2005 for the first time in company history, total earnings in '06 dropped by nearly half. Lennar CEO Stuart Miller has got to be needing a good drink by now. The buying and investing world is also having a drink, but for a different reason.
Lennar's MEGA-loss means that the housing sector of the economy is still dropping back to more reasonable levels of growth...basically we are getting back to where we should be, which is still better off than we were before. It's bad news for owners of properties who expected to get rich of the equity in the homes...it's great news for first-time buyers and investors who are going to be able to get incredible deals. We already discussed this back in "2007: Year of the Incentives", the market factors are realtively simple supply and demand. But with Lennar's most recent report, and the company's widely respected status as a market indicator, we can expect that while Stuart Miller might be stewing over a vodka maritini overlooking Atlantic Ocean, there are thousands and thousands of smaller developers who are drinking far cheaper drinks while they pour over their numbers trying to figure out how in the world they are going to sell their units...let the negotiations begin!!!
Lennar's MEGA-loss means that the housing sector of the economy is still dropping back to more reasonable levels of growth...basically we are getting back to where we should be, which is still better off than we were before. It's bad news for owners of properties who expected to get rich of the equity in the homes...it's great news for first-time buyers and investors who are going to be able to get incredible deals. We already discussed this back in "2007: Year of the Incentives", the market factors are realtively simple supply and demand. But with Lennar's most recent report, and the company's widely respected status as a market indicator, we can expect that while Stuart Miller might be stewing over a vodka maritini overlooking Atlantic Ocean, there are thousands and thousands of smaller developers who are drinking far cheaper drinks while they pour over their numbers trying to figure out how in the world they are going to sell their units...let the negotiations begin!!!
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