Sell More... Lose More
From the WSJ:
Home builder Lennar Corp.'s loss widened in its fiscal first quarter, but it managed to generate more sales than some analysts had expected amid the start of a dismal spring selling season.
For the three months ended Feb. 28, Lennar reported a loss of $155.9 million, or 98 cents a share, compared with a year-ago loss of $88.2 million, or 56 cents a share. Revenue plunged 44% to $593.1 million.
"Despite historically low interest rates and some indicators pointing toward market stabilization, low consumer confidence, increased unemployment and growing foreclosure rates negatively impacted new home sales in most of our markets," Chief Executive Stuart Miller said in a statement.
We are right about there in many communities...especially those where lots of new homes were built in recent years that are experiencing very high foreclosure rates.....the price of a new home is less than stick and brick cost....
At this point, each home you sell is a money losing proposition....the difficulty with this business model is the more you sell the more you lose.....
Who woulda thunk that increasing revenues would be a bad thing....I guess Alstry would because he was telling the blogger that calls himself the builder from the state South of Georgia that this day would come......welcome to Alstrynomics and concentric conctraction......and he used to make fun of Alstry?????
Hang on....we are just beginning....you will like be SHOCKED at just how low prices can go.