Home Builder Ryland Pulls Up Stakes In Jacksonville, Dallas

By Steve Schaefer, Forbes Staff

 They say real estate is a local business, and hen the housing bubble burst in spectacular fashion over the past few year, the damage was hardly spread equally across the country. Now, with some markets seemingly back to normal while others make fresh lows in terms of prices, sales and building activity, it is becoming clear that the recovery is taking place at drastically different speeds as well.

Calabasas, Calif.-based Ryland Group offered a fresh reminder Friday, when the home builder said it will wind down its building operations in Jacksonville, Fla. and Dallas, Tex. Drew Mackintosh, VP of investor relations, says the company has not been making money in those divisions and determined that the capital required to do so was “prohibitive.”
In Pictures: 10 Cities Where Buyers Do Better Than Renters
As a result Ryland, which operates across 18 divisions, will close up shop in those locations and spread the resources formerly committed there to its 16 other areas. The move is “just as much about redeploying [assets] to the cities we did not shut down,” Mackintosh says. Ryland will service all outstanding warranties on the homes it constructs in both areas, the company stressed in its press release
Jacksonville and Dallas both rank in the top 15 of a recent list of cities where it is cheaper to buy than rent compiled by real estate data firm Trulia, coming in at #8 and #13 respectively. Beaten-down prices, oversupply due to foreclosures and thousands of homes worth of shadow inventory – homes that would be on the market under more normal conditions – are keeping a lid on many markets even at a time when housing affordability and mortgage rates are at historically-low levels on a nationwide basis.
In Pictures: 10 Cities Where Buyers Do Better Than Renters
Shares of Ryland Group were up 3.4% Friday amid a broader market rally. Luxury home builder Toll Brothers, which warned earlier this week that August’s market volatility will not be helpful to consumer confidence and in turn the housing market, was 2.9% higher.
Source http://www.forbes.com