Lennar Defies Housing Market Trends

"Standing in a hallway at Lennar's offices, chief executive Stuart Miller clears his throat. He then proceeds to recite the entire seven stanzas of Scratchings From The Little Red Hen by heart.

The poem -- about a hen that labors to find worms in tough times -- is something of a rite of passage at Lennar, the third-largest home builder in the country. Since 1994, some 4,000 employees have recited the poem to the applause of their peers, with the name, date and place of each performance memorialized on large plaques outside Miller's office.

But these days, the poem is taking on a whole new significance. After a housing boom of more than a decade, the long-awaited downturn has finally hit with a speed and force few anticipated. Home-builder confidence has dropped to its lowest in 15 years. Cancellations are up. And new construction is down to a level not seen in three years."

Perhaps worst of all, it's hard to tell when things will get better.

'It doesn't feel like we can identify a bottoming yet,' said Miller, who recently downgraded Lennar's earnings estimates for the year. 'It happened very quickly, very suddenly. I can't identify the trigger.'"