In September, single-family housing starts in the Midwest, Northeast and West hit the lowest paces since government record-keeping began in 1959, and analysts say that some big and small builders may be doomed to fail as the housing slump progresses, according to a Reuters news analysis.
The article quotes Carl Reichardt, a Wachovia Capital Markets analysts: "Builders exiting markets, selling off assets, consolidating with each other, or failing all help rationalize the marketplace in the long run," adding that large public builders had cut the number of communities they were building by 22 percent, on average, as of Sept. 30.
Other analysts stated that some builders are focused on building smaller homes with lower construction costs these days, and that builders will likely expand the use of land-option contracts that give them the right to buy land and serve as an alternative to buying land outright.
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