For the first time in this downturn, Avatar Holdings lost money last year.

A big stock of land, bought long before the downturn, and a tidy stash of cash allowed the Coral Gables, Fla.-based company to hold on to profitability much longer than other builders.

In the end, it was seriously depressed sales numbers and falling prices that brought on the red ink. It lost $107 million last year. It made $21 million in '07. Avatar reported its yearend results on March 16.

The company, which builds mostly in Florida and a little in Rio Rico, Ariz., closed 247 homes last year, a 68% decrease from the 780 it sold in '07. And the revenues from sales fell further because of discounting, down 72%.

With backlog sitting at 56 on Dec. 31 of last year compared to 147 the year before, management doesn't expect any improvements in '09. Plus, it's not expecting to make any money on those sales it made in the last quarter of '08.

"Most of our sales contracts have been signed at selling prices that have resulted or will result in losses upon closing when factoring in operating costs such as sales and marketing and divisional overhead," the company's 10-K said.

"We believe that housing market conditions will continue to be difficult and may deteriorate further into 2009," it continued. "We anticipate that such operating losses for 2009 will be greater than such losses incurred during 2008."

On a brighter note, with $175 million of cash on hand, management expects the company will be able to fund the losses. The company had $192 million in cash at the end of '07, down 8.7%.

Avatar's impairment charges also soared last year, up to $5.2 million from $2.5 million the year before. Those were related to communities under development and homes completed or under construction. The rest of the company's land was purchased so long ago at such low prices that it isn't impaired.

Company management hoped it might be able to sell some of its copious land in the next year to generate more cash. It does some commercial as well as residential development. Since its holdings include large swaths of raw land, it has had some success selling environmentally sensitive land to governments for preservation in the past.