The housing market is getting worse, not better, the leader of Miami-based Lennar said Thursday as the homebuilding giant announced its second straight year of billion-dollar losses.
Lennar CEO Stuart Miller said home prices are in ''freefall,'' and the only way to break the downward spiral is a federal government stimulus package.
''That bright light at the end of the housing market's dark tunnel will be government action,'' Miller said in a conference call with analysts.
Like other developers, Lennar is trying to navigate an ugly downturn at the root of a broader economic recession, a plunge that has sent Lennar's stock plunging 80 percent in the last two years and put several Florida developers such as WCI Communities into bankruptcy court. Lennar has major operations in Florida and California, the two states hit hardest by the housing downturn.
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Lennar's strategy includes hoarding cash -- it had $1.09 billion in reserves as of Nov. 30 -- and establishing a fund aimed at buying distressed residential properties.
The $1.1 billion Lennar lost in its fiscal 2008 is a remarkable reversal of the $1.4 billion in profit Lennar earned in 2005. That year, the height of the housing boom, was the first -- and only -- time the company cracked a billion in profits.
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