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Why is Centex Holding a "Fire Sale" on the Remaining Villas at the Beach Villas at Ko Olina, Oahu, Hawaii?

By
Real Estate Agent with Beach Villa Resort
Well the obvious answer is that the economy is down, no one is spending money and that unfortunately for Centex their build/sell cycle was about one - two years too late.

A fellow homeowner friend who works in the financial markets came up with a techincal answer which was really interesting so I thought I would share:

24 jan:  Centex 3rd quarter orders down 80%. Probably caused a breach of their covenant on their credit facility stipulating a minimum tangible net worth.  Net worth fell to 2,037m down from 4,259.87 a year earlier. 

29th Jan:  reduces credit facility from $1.35b to $500m. Again changing the covenant. 

Their corporate paper was also down graded from BB to BB- in November. 

My take is they are in trouble but need to dump inventory and make cash immediately to stay afloat. I would say that they will achieve that as there is no negative comments on the wires in that respect.

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Please allow me to represent you as your buyers agent on selection day. There is no cost to you and your purchase price is exactly the same. What you select and how much you pay will make a big difference in your profitability; both from an appreciation standpoint and if renting, covering expenses. Afterwards, we can also work together to "get heads in beds".

(All of the thoughts expressed in this blog are my own personal opinion, they are no guarantee that you will achieve similar results, it's just me sharing my own experiences and what has happened in my own situation. I cannot know what will happen in the future.)

Comments (1)

Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

That's a very interesting supposition and I thank you for sharing. It does sometimes prove enlightening to hear a technical rationale for something that just doesn't seem to make sense to the "common folk"

Feb 19, 2009 02:16 AM