U.S. housing slump wipes out big and small investors

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Plummeting land prices cost five biggest home builders nearly $1.5 billion in fourth quarter
Bob Ivry, Bloomberg
Published: Monday, February 12, 2007
5 ]. H3 s5 d% s! \7 _6 dBrian Tuttle owns so much land that he paid $3.6 million US to get rid of 125 acres ready for development in the middle of Florida's Palm Beach County.
"In 2005 I was a brain surgeon, and in 2006 I was a moron," said Tuttle, who walked away from his deposit on the land rather than lose even more money buying it and building homes on it. "The only good news is that I'm not alone."
The worst housing slump in 16 years made a lot of smart money vanish. D.R. Horton Inc., Pulte Homes Inc., Lennar Corp., Centex Corp. and Toll Brothers Inc., the five biggest U.S. home builders, said plummeting land prices cost them a combined $1.47 billion in the fourth quarter.
0 L2 a5 E) t0 p/ {9 s) \At one point, a third of Miami residents were real estate agents, according to economist Jacob Freifeld. Some prospered by selling swampland to unsuspecting speculators.
After a hurricane swept through the region, causing property prices to drop, many speculators left the Florida market and sunk their money into the stock market before 1929.
8 J' J5 U  v9 r4 w4 H& HFORFEITS DEPOSIT
+ C# g7 o$ _, S( I) L& BBrian Tuttle's latest deal to go bad was a housing development he planned on the site of the Gulfstream Polo Club in Lake Worth, Florida, on what he calls the largest undeveloped tract in the 60 kilometres between Boca Raton and Jupiter on the state's Atlantic coast.
2 l# ?; E1 X( }- |3 oTuttle owns about 100 acres of the land, and he put down a $3.6 million deposit to reserve an additional 125 acres in 2005.
If he chose to buy the land, he would pay $310,000 an acre, almost 10 times more than the $33,000 an acre he paid for his first parcel there in 2000.
Two years later, land values have fallen by as much as 40 per cent. Tuttle said it was impossible for him to make enough on the deal, so he chose to give up the deposit rather than buy the land.
9 z7 }7 |  R2 U6 L' R& j6 P( e1 Y"I'm just this humble guy and I didn't see prices going this low," Tuttle said. "The big guys didn't see it either."