Who wants a brand new house for 40% less than its book value? Welcome to the slumping American housing market.
Lenar Corp has agreed to shift 11,000 properties to Morgan Stanley for 40% less than book value to get them off their balance sheets:
“The deal was done on the last day of the company’s fiscal year, partially in an effort to generate tax-loss carry backs,” said Eric Landry, a Morningstar Inc. analyst. “The fact that it closed so late [9:30 p.m. on the last day] in the year and was priced at only 40% of book value may indicate just how eager Lennar is to slim down its balance sheet — and the degree to which it will go to do so.”While details remained sketchy on Monday, a multimillion-dollar deal to shift 11,000 properties off the books of the nation’s largest home builder raised concern among analysts that the mortgage meltdown was continuing to spread.
Full story at Marketwatch.