New York – Two more homebuilders – MDC Holdings Inc. and Brookfield Homes Corp. – reported year-over-year declines in home orders in the fourth quarter, offering another sign that the housing industry is weakening.
Denver-based MDC said orders declined 10 percent primarily due to a sharp drop-off in orders in Arizona and Washington, D.C., an increase in cancellations, and softening trends in Colorado, Florida, Maryland and Texas.
Orders plummeted 39 percent in Arizona and 60 percent in Washington.
The Washington market decline was largely due to higher cancellations and a lack of available inventory to sell.
At the same time, order cancellations ticked up to 33.8 percent from 32 percent a year ago.
This was partly offset by healthy demand in Nevada and California, where orders rose 173 percent and 20 percent, respectively.
Orders are considered a key metric for measuring future revenue and earnings in the homebuilding industry as they reflect revenue the builder will receive two or three quarters later when a home is finished.
MDC said the Arizona orders are simply returning to more normalized levels from the “unsustainably high levels” experienced in the last nine months of 2004 and first quarter of 2005.
Del Mar, Calif.-based Brookfield Homes said orders plunged 39 percent in the fourth quarter due to a slowdown in sales in the San Diego and Washington markets as well as a shortage of inventory available for sale.
