Ryland’s CEO sees no end to the slump
The head of homebuilder Ryland Group Inc. didn’t offer much hope for a quick turnabout as he discussed his firm’s losses Thursday, saying there is no end in sight for the housing slump.
R. Chad Dreier, chairman and chief executive of the Calabasas-based company, said home prices were “very high” in both Northern and Southern California. Despite recent price declines, “it would take a pretty strong deal, with a great price and good terms to convince me to jump into that market,” he said during a conference call with analysts.
Ryland said it lost $201.9 million, or $4.80 per share, in the fourth quarter -- 10 times the estimate of analysts surveyed by Bloomberg News.
That compared to a gain of $87 million, or $1.98 per share, a year earlier. Revenue fell to $854 million, from $1.3 billion.
For the year, Ryland lost $333.5 million, or $7.92 per share, compared to net income of $359.9 million, or $7.83 in 2006. Annual revenue dropped 38% to $3 billion.
Shares of Ryland fell 69 cents Thursday to $30.53.
Dreier called the housing market “one of the toughest in my 30 years” in the homebuilding industry. He said “it’s too hard to call a bottom” for falling prices but that historically downturns last two to three years.
His observations were matched by news that the pace of U.S. existing home sales fell by 22% in December from the previous year, according to the National Assn. of Realtors.
Re-sales of houses and condominiums for all of 2007 were down 13% from 2006, the group said.
The number of homes for sale dropped in December by 7.4%, to 3.9 million units. That represents a 9.6 month supply of homes at the current sales pace, down from 10.1 months in November.
NAR chief economist Lawrence Yun called the fall in inventory “encouraging” but said “inventories remain elevated, and buyers have a clear edge over sellers in many markets.”
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