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Beazer's Exit

A surprising incident occurred when Beazer announced they would be pulling out of the Charlotte market. Not an eventual gradual withdraw but an immediate ceasing of operations. Nearly all employees were fired immediately. All projects not currently under construction would be abandoned. Homes under construction would be completed, but all new sales were to cease. Time will tell how deep and how dark the problems for Beazer lay. One can only speculate that the problems are intense. While Charlotte has been the trend breaker in home sales, the slower pace of sales may have been too much for Beazer. One plausible explanation is that there was a strategic planning failure in the Charlotte market. Maybe Beazer failed to plan their communities in such a way as to be able to withstand economic hardships. While sales have been occurring in the real estate market, maybe Beazer didn’t have themselves in a position to get a piece of the pie.

Maybe it was just the perfect storm. It could have been the combination of bad publicity coupled with a slow-down in the marketplace. While Beazer has been taking a PR beating from the Charlotte Observer and TV, people out shopping for homes have been less able to purchase new construction houses due to tighter lending restrictions and slower markets in transplant cities.

A portion of the equation could be that maybe Beazer found out they could only survive financially by utilizing the practices that have got them the negative publicity. Maybe fair business wasn’t their game. While the speculation about what caused Beazer to pull out of Charlotte is interesting, their practices make an easy target for speculation and attack.

It leaves one to wonder: If Beazer is pulling out of the best real estate market in the country, how much trouble corporately must they be in?

A LOT!

In the next year, Beazer will likely be out of business entirely. It wouldn’t be surprising to hear of an Enron-esque cover-up in regards to the loan fraud issues that their mortgage division is currently under Federal investigation for.

Only time will tell how deep the rabbit hole will go, but the one certainty is that Beazer will soon be a memory to more than just Charlotte.

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