On 9/12/2007 I posted what I thought would be very cool news.

The post was titled, "The Housing Giants Sortable List of Builders"

The post included a link to a list that HousingZone.com has been keeping ... a list of the top builders in the nation.

The best feature is this: you can sort by revenues or closings.

I used to work quite heavily in the new homes arena. It became important for me to know how the builders were doing.

Though I still keep track of new homes, I don't concentrate on that segment as much as I used to.

This is evidenced by my dismantling of the website that I set up for that purpose.

As it turns out, there are other areas of the market that piqued my clients' interest.

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It's such a hard time to be a new home builder.

They're competing against foreclosures... sometimes within their new home community.

They're also competing on price. I'm convinced some builders are selling below cost.

This is a recipe for disaster.

New home builders have been hurting. Several are limping along- while others have failed.

Tonight brings the news that one of Arizona's premiere builders, Fulton Homes, has filed for Chapter 11.

They're the latest, but I would expect, they're not the last.

Some builders used to have several divisions... large builders such as Shea, Pulte & D.R. Horton.

Each of them are now single divisions- overseen by a smaller management crew.

In the process, VPs have become sales managers... managers have become sales agents... and many people have lost their jobs as sales continue to dwindle.

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So. What are we to make of this?

On a personal note, it's sad to see so many good, hard working people lose their livelihood.

On a practical note- this is how markets work. When you increase the supply you can expect, at some level, a decrease in demand. The natural result is a drop in price. Eventually the inputs to the formula no longer produce a positive output.

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I still track the new homes market. However, I have to do so with greater scrutiny. It's lamentable that I have to try to determine who can offer optimal service over the long-haul... I'd rather they all succeed. However, it's the duty of the agent to be informed- even if we don't like the bad news.

I expect other builders to fail. It's only a matter of time. Maybe some will be able to consolidate... such as Taylor Woodrow and Morrison homes... who now function as Taylor Morrison. I saw Fulton's news coming and stopped taking buyers there months ago. I also saw Engle and Element heading in that direction as well. It's regrettable... some of the floor plans these builders offered were very good. Others I didn't predict. You can't pick them all, I guess.

There are builders who are differentiating themselves by offering something that is not available.... but they face very challenging times. I hope their innovation is rewarded.