Sorrow for the Lost Lennar

In the board game Monopoly, you can sell your houses back to the banker at half the price. Is that what we will ultimately come to with the freefalling state of real estate development?

Lennar (NYSE: LEN  ) became the latest homebuilder to talk down its numbers. The company is looking to post earnings between $0.70 to $0.75 a share for the quarter that ended in November. That's before inventory valuation adjustments and write-offs drag that showing deep into the red. Analysts were looking for the bottom line to clock in at $1.07 a share.

Lennar is no stranger to the hose downs. The company warned investors about fiscal shortcomings twice in the month of September alone.

It's not going to get any better in the near term. The company is closing out its fiscal year with a backlog of $4 billion in new home orders. That's a far cry from the $6.9 billion backlog that the company was clinging to a year ago. A slowdown in new orders and cutthroat deals to move developed homes under deteriorating market conditions finds gross margins taking a hit.

This is obviously not an isolated incident. Last month we had Toll Brothers (NYSE: TOL  ) disappoint, and even though homebuilders like to pick out scenarios where they see daylight, the optimism has been typically shot down a quarter later.

Most developers are doing their part to ease the sting. They're walking away from land option contracts and slowing the erection of new homesteads until they sell more vacant homes. Lennar may have announced that it's expanding its strategic LandSource program by admitting a new partner, but the land-grabbing days are essentially over for the sector until the housing market recovers.

Until then, maybe it's time to put away the Monopoly board and start brushing up on Sorry.

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Longtime Fool contributor Rick Munarriz feels that owning a home is better than renting, but he can admire folks who are renting now until housing prices dip to realistic levels. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.