M/I Homes sees losses of $21.7 million
Columbus, Ohio-based home builder M/I Homes saw a third-quarter net loss of $21.7 million, swinging from earnings of $15.2 million in the same period last year. Net revenue fell 20.4 percent to $243.7 million from $306.2 million last year.
The loss includes a $26.5 million charge for land and real estate-related impairment and abandonment, as well as a joint venture investment write-off of $6.1 million. Year-to-date the company has recorded $92.9 million in land-related charges.
Robert Schottenstein, president and CEO, said market conditions remain challenging in the company’s markets.
“We remain focused on initiatives that include reducing our land and expense levels, improving our balance sheet, as well as continued improvements in our customer service and quality processes,” Scottenstein said. “We expect to … further reduce our debt levels by year end.”
M/I Homes builds homes in Ohio, Illinois, Indiana, Florida, North Carolina, Delaware, Virginia and Maryland.
Chief operating officer resigns at Builders FirstSource
Dallas-based Builders FirstSource has announced the resignation of Kevin O’Meara, president and chief operating officer.
Astatement from the company said O’Meara resigned because he believed it would be “mutually beneficial” for both the company and him, and that he plans to pursue “new corporate leadership opportunities.”
The company said it has no plans to fill the position at this time.
“As one of the three founders of Builders FirstSource, over the last 10 years Kevin was instrumental in growing the company to over $2 billion in revenues, culminating in the company’s initial public offering in June of 2005,” said Paul Levy, chairman of the board.
Builders FirstSource supplies and manufactures building products for residential new construction, with operations in 13 states.
Sun comes out for housing starts
Home sales should bottom out by the end of the first quarter of 2008, and housing starts are expected to start rising in the third quarter, according to the most recent forecast of the National Association of Home Builders (NAHB). Speaking at an Oct. 24 housing conference, NAHB economist David Seiders pointed to a number of positive economic factors, including job growth, controlled inflation and short-term interest rate cuts.
The NAHB is predicting 828,000 new single-family homes for 2007 and 781,000 for 2008, a 5.6 percent decline. Total housing starts are expected to register 1.36 million this year and 1.2 million next year, an 11.9 percent decline.
Addressing the subprime mortgage crisis, Mark Zandi, an economist at Moody’s, predicted that certain regions of the country would receive more negative fallout than others. Among them are Arizona; California; Florida; Nevada; Boston; Washington, D.C.; the New Jersey coast; and the Carolinas.
Michael Moran, chief economist of Securities America, pointed out that subprime loans hold a 13.5 share of the mortgage market, and only 20 percent of these loans are “under stress.”
Most recently, the U.S. Commerce Department released housing starts data showing September saw the slowest pace of new residential building in 14 years (since March 1993) when 1.08 million units were under construction in the United States.