GLG News by Chief Financial Officers in the Real Estate Construction Industry

Lenders must face reality that today's value for land loans and A&D (acuisition and development) loans will yield pennies on the loan dollar.  There is no pretty way out for lender's exposed to this type of debt.

- Centex scrapped cutting edge solar panel program in Naples Florida community last year due to expense. - This was after a hand shake agreement with local environmentalist Clyde Butcher to provide solar to Naples community in exchange for his endorsement. - A hand full of houses were completed...

The housing bust is not over and trends continue to be negative.  The only positive activity is that homebuilding stocks have gone up, without a good reason.  We still have a ways to go to work through all this.

Not capitalizing interest in inventory causes acceleration of losses and deterioration of book value.

Recently, stock prices of most public homebuilders have increased 20-30 percent.  This despite no visible signs of improvement in the overall housing industry.  It seems early in the cycle for these stock price upward movements, as it appears the housing market has not yet found bottom. ...

Homebuilders have recorded large inventory impairments over the last couple of years.  Most of these impairments have been for land and lots.  As these previously impaired lots are built on and a completed home is delivered, the land component as a percentage of Cost of Goods Sold may decline...

There are risks associated with homebuilding assets and contingent obligations.  This article alerts the reader to areas of interest.

Homebuilding impairments and tax valuation reserves provide future accelerated income streams, when the recovery occurs.

Issues associated with loss of income tax benefits result in accelerated reduction of book value in homebuilders.

Unforseen risks associated with homebuilder joint venture agreements and accompanying completion agreements.