Homebuilder Profits Sink as Atlanta Housing Market Slows
With low demand for home mortgages in the Atlanta region, building companies are suffering along with sellers.
For example, Beazer Homes USA Inc.’s new home orders fell in fiscal 2006, while its fourth quar
ter profit dropped 44 percent, as the housing market continued to weaken.
Throughout the year, Beazer had 18,669 home closings, compared with 18,146 in 2005. However, the firm’s new orders dropped to 14,538 in 2006, compared with 18,923 a year ago.
The Atlanta-based homebuilder posted net income of $388.8 million and earnings of $8.89 a share on $5.5 billion in revenue for fiscal 2006, compared with net income of $262.5 million and earnings of $5.87 a share on $5 billion in revenue in fiscal 2005.
Despite offering incentives to mortgage applicants, many home building companies faced similar results this year.
“Beazer Homes had record fourth-quarter closings and revenues in fiscal 2006 as we focused on converting our existing backlog in what remains a challenging housing market,” said Ian J. McCarthy, Beazer Homes president and CEO. “Despite our strong close of fiscal 2006, most markets across the country continue to experience higher levels of resale home inventories, lower levels of demand for new homes, significant increases in cancellation rates and significantly higher discounting.”
The company said it recently cut its number of employees by 1,000, or 25 percent.
The loss of jobs is another unfortunate side effect of the current housing market around the country. Many home mortgage brokers have also been forced to find new work until things pick up again.