Heeding the signs of a bursting bubble, St. Joe
The move is a major reversal for the company, which started out as a paper and pulp producer, amassing enough forested acreage in the state of Florida to own 2% of the state's land. In recent years, the company was transformed into a real estate powerhouse, cashing in on its more than 850,000 acres of land by building resorts and communities, with a lot of that turf lying in the pricey panhandle area off the Gulf of Mexico.
The company will take a $10.7 million charge as it "winds down" its homebuilding business.
Even though the shares have cratered along with those of more conventional real estate developers like D.R. Horton
St. Joe won't be straying too far away from the earth beneath its toes. Its move to develop "towns" instead of "homes" may shift some of the risk -- and opportunity -- to partners like Beazer Homes
In that sense, St. Joe's move is both colossal and inconsequential. Yes, Florida may be a uniquely overheated situation. Models will get altered. WCI
The news is unlikely to get any better in the near term. The overabundance of new and existing homes on the market will make this a buyer's market for some time. St. Joe has already felt the squeeze and, try as it might, it will never be too far away from home.
Bucking the trend to score a great housing deal thanks to the glut of homes on the market? Do check out our Home Center before you start hitting the open houses.
Longtime Fool contributor Rick Munarriz has been living in the same place since 1999 -- but did refinance twice when borrowing costs got dirt cheap, only to pay off his home earlier this year. 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. T he Fool has a disclosure policy.