Could Big Homebuilders be Facing Bankruptcy?

As residential building starts slow — the annual h...

As residential building starts slow — the annual housing start rate was more than 2 million in 2005; economists expect it to fall to 1 million by mid next year, according to the Associated Press — some large homebuilders, no matter how many bargains they offer, may be in trouble.

They’re not going down without a fight, mind you. Some, like the 50-year-old Centex Corp. and Pulte Homes Inc., are reducing their operating costs and cutting prices via sales promotions and auctions to sell homes. (Pulte recently trimmed $10,000 to $50,000 off prices at an event and also offered a deal on closing costs and free golf carts in senior communities.)

But when things were booming, some companies may have showed too much enthusiasm. Last Friday, Levitt and Sons, a subsidiary of Florida-based Levitt Corp.
filed for Chapter 11 bankruptcy protection. The reason: "unprecedented
conditions" in Florida and the Southeast, AP reported.

Fifteen or so years ago, a number of builders filed for bankruptcy, including Reston. Va-based
NVR Inc. and U.S. Home Corp. of Houston. Will the same hold true in this slump? Share your thoughts below.