What have you always wondered about the economy? Tell us

Lennar spins on buy low, sell high

Marketplace Staff Mar 31, 2009
HTML EMBED:
COPY

Lennar spins on buy low, sell high

Marketplace Staff Mar 31, 2009
HTML EMBED:
COPY

TEXT OF STORY

Renita Jablonski: Homebuilder Lennar reported earnings last night. Its loss widened but sales were a little higher than what analysts expected. And the company is offering what could be another sign of improvement. As Jennifer Collins reports, it’s a spin on buy low, sell high.


Jennifer Collins: Lennar made a smart move at the height of the real-estate boom. It sold most of its stake in a 15,000-acre tract of land north of Los Angeles — the kind of prime real estate that could’ve easily become a suburban village. Then, the housing market collapsed, and the land holding company filed for bankruptcy.

Today, Lennar’s looking to make another smart move: Buy much of the land back for a bargain.

Marlee Lauffer represents the holding company, and says the details need to be worked out:

Marlee Lauffer: But we certainly see this as a positive development in our Chapter 11 case.

The deal could eventually give a boost Lennar. The company lost more than a billion dollars last year.

Greg Doyle is a market researcher with Hanley Wood:

Greg Doyle: We are at or very close to a bottom on this — at least close enough to the bottom where I think having the discussion about getting back into the market is a valid strategy.

He says most of the large homebuilders he advises are already laying the groundwork to buy cheap plots of land on the market.

I’m Jennifer Collins for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.