The Wall Street Journal late Thursday night reported that D.R.Horton, which bills itself as America's largest builder, sold significant parcels of land it controlled at deep discounts in order to take advantage of tax carry-back provisions that could net it significant rebates. The company did not respond to request for comment from the Journal and could not be reached by Big Builder early Friday morning.
According to the Journal, Horton sold "about 2,000 house lots in Desert Hot Springs, a blue-collar community in the far reaches of Southern California's Inland Empire, for $7.8 million, according to county records." The newspaper quoted a local official as saying Horton paid "about $110 million" for the land before before improvements. The newspaper also reported the sale of a four-acre parcel near San Diego for $4.4 million, about 25% of what it paid for the property, according to the county assessor.
Real estate analysts have predicted that, absent Congressional action allowing the carry back of taxes beyond the current maximum of two years, builders would begin unloading excess land holdings at prices the market will currently bear in order to take advantage of the current tax law. The fear among analysts has been that this will worsen the already soft market for developable land by putting even more lots on an already saturated market.
This story will be updated as more information is acquired.
Learn more about markets featured in this article: Los Angeles, CA.
