FORT LAUDERDALE, FL -- Levitt Corp. here reported a net loss of $58.1 million for the second quarter ending June 30, compared with a net loss of $737,000 in the second quarter of 2006.
The second-quarter net loss included pretax charges of $63 million associated with homebuilding inventory impairment charges, compared with $4.7 million of impairment charges in the second quarter of 2006.
The large impairment charge reflects the continued deterioration of the homebuilding markets where the company operates, particularly in Florida, the need to employ aggressive pricing and discounting strategies in an effort to increase sales, and the prolonged durationof the weakness in the market.
"The housing market continued to weaken throughout the second quarter. New and existing home inventories have continued to increase nationally as a consequence of decreased consumer demand and reduced credit availability, leading to downward pressure on new order pricing throughout our markets," said Alan B. Levan, chairman and chief executive officer.
Total revenue from sales of real estate in the homebuilding division during the second quarter increased $7.1 million to $123.7 million, from $116.6 million in the comparable 2006 period. During the second quarter, the company delivered 379 units at an average selling price of $326,000 compared to 392 delivered units with an average selling price of $297,000 in the corresponding 2006 quarter.
Gross orders of 478 units in the second quarter were reduced by 187 cancellations, resulting in net orders of 291 units. Demand in the active adult and family communities in Florida, which constitute 58% of our unsold lot inventory, was weak during the second quarter. Average selling prices for gross orders in the second quarter were $256,000 down from $283,000 in the comparable 2006 period as a result of increased sales incentives and a higher mix of town home units.
At the close of the second quarter, homebuilding saw a backlog of 957 homes with a sales value of $297.8 million vs. 1,799 homes with a sales value of $609.2 million at June 30, 2006. The average sales price of homes in the backlog at June 30 decreased 8.3%.