A Big Builder Yuletide Yarn–Happy Holidays
Hark now, every home building management reader,
Tis season once more to frame out some lieder,
‘Pon what’s come and gone and o’er what lay ahead,
In good holiday’s spirit, none too gently we’ll tread.
How else, pray ye tell, could mere maker of poems
Distract, divert, and amuse titan builders of homes
As the Dons Tomnitz and Horton, Lennar’s sagest Miller
StanPac’s knighted Kenneth (no Wall Street empty suit filler);
Ara, ever noble scion of KHov’s still-solid stock,
Nary even needs wear his Guccis with socks;
Ryland’s well-apparent heir Lawrence of purse-strings so tight
As Counts Saville, Mandarich, and Mizel, who play asset-light
Like Amatis and Strads, not so R.I. Toll, maestro of go long and hold
For the years it oft takes well-placed dirt to morph into gold?
And how, we beseech ye, dare we snip bits of attention
From KB’s Next, Mezger J, whose ‘09 O-S invention
Caught the industry’s ear, and bred me-toos galore
As product and process each pry open a door
To directs rivals guess near $35 a foot square,
(Never mind counting windows–just don’t go there)?
What of Sir Steven Hilton, Lady Palmer, kindest Duc Orleans;
Two accented Lords Ian (Cockwell & McCarthy), and Baron Schottenstein;
N’oubliez pas le roi Richard Dugas, wearer of Pultex’s dazzling crown?
Each royal by nature, each took his or her knocks; but nobody’s down.
Down to the wire each pushed for lot transaction
As sell what-the-hell gave great satisfaction.
And the only thing that could stop their roll,
Was a 60-month limit on carry-back NOL.
Check most of their balance sheets, you’ll see what’s in store.
Dry powder is one thing that e’er proves to make less into more.
A note of regret, perhaps, and it’s only an if,
Is that none of their firms seems to rate T-B-T-F.
So as the global econ’ plunged from dire to worse,
Home builders mounted a clarion cry across industry sectors, fix housing first.
In spite of dogged efforts from Senator Johnny I,
Stimulus’ gains were scant on that first try.
At a moment the economy needed action most urgent,
The $8k tax credit extended only to home buying virgins.
When the President’s signature dried on that $789 bil,
The industry knew more diligent work might win over the Hill,
So they kept up the lobby and expanded the net
To propose a new bigger credit by November’s sunset.
As TARP dollars poured billions into the tubs of the banks,
Cash drained at twice the speed as CRE values sank.
Long loyal AC&D customers threw up their hands
As special services bureaucrats wrote down their land
And gave the privates tidings of a new world order
Where every stinking loan lay deep ‘neath the water.
From vertical to vertigo, privates pushed to drive cash,
Only to find appraisers HVCC away in a flash.
Bare consolation can be got late Friday aft-noon,
As Sheila Bair’s agents swarm bank presos’ room.
Meanwhile, in fits and starts, and Starts and permits,
News wasn’t all bad, even doomsayers had to admit,
You could tune them all in each day on CNBC,
Crowe, Lawler, and Yun, and ever Moody’s Zandi.
For gallows humor it’s Roubini, for sound bites it’s Zelman,
For thrills we’d take Shiller, for riposte Paul Krugman.
Each metric confirms what each expert affirms,
Things may be a bit better in some uncertain terms,
With potential for worse, but not nearly as steep
As the rate of decline year on year, or some such heap.
Where things were going was anyone’s guess,
Up, down, all around—so bounced NHS.
The spin doctors prone to red herrings absolute,
Concocted one for the moment, the famed green shoot.
What happened late Spring is what happens next,
When word of the bottom follows case study’s text.
There’s a rush to reload and land’s new reset price,
Even builders stressed for cash must roll the dice.
They clamor and claw with what resources they’ve got;
Not for Danish, nor Swedish, but for finished Lots.
Thronging to buy for cents on a dollar,
Bubble behavior grabs anew by the collar.
And back in the trenches, we blanched to report
The demise of big name builders the sort
You’d hardly believe bound for builder heaven,
But there they were in droves filing Chapter 11.
Down went Mercedes, Caruso, St. Lawrence, Fulton,
Kirk, McStain, Pasquinelli, Choice and Morgan.
Some of them would go the way of Kimball-Hill,
Others would fight the fight, by dint of their will.
They’d work with the trades, and work with the lenders,
They’d work overtime, 24/7 weekenders.
Others yet would emerge from out of the ash,
Refinanced and fit for a new dash for the cash.
And what of the buyer, the paralyzed, pulverized buyer,
Whose job might be at risk and whose debt’s never been higher?
One of the housing crisis’s most brutal pranks
Is to make so many home sellers the same banks
Who say they can’t fulfill the terms of construction loans
Because, you see, they utter in solicitous whispered tones,
Each project’s value has declined beyond repair,
In fact, they say, there is no there there.
So what will we see happen come 2010?
Will ‘09’s ups and downs play out all over again?
Will all that great talent we’ve had to let go
Get stuck floor managing Lowes and Depot?
Will Bernanke blink on his MBS plan?
Will inflation flair its ugly force again?
Will 3.5 be history in the FHA?
Will the econ trace a double-vay?
As the night before night before night before falls
We wish warmth, resolve, and resilience to you all.
No business compares, no folks so salt of the earth,
We want you to beat this thing and show what you’re worth.
Take an instant and remember what is sometimes unclear:
Good people are with you, behind you, here.
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