Lennar Mothballing Homes

Now this is some scary stuff if you are looking for housing to bottom out.

Lennar Corp., for one, has joined the "not to sell" camp at its
development in Orange County, Calif. The Miami company plans to finish
building 259 homes -- the first phase of a 1,100-unit development in Irvine
-- but it has decided not to sell any of them until the constrained mortgage
market and swollen housing inventory improves.

So they are basically building houses and then just letting them sit until the market improves. What happens if you run out of cash while waiting for things to improve?

Lennar has $128 million in cash on the books and 3.12 billion in debt. I wonder what it will cost Lennar to make those 259 homes? It just seems to go against business sense to pay big money (perhaps 50 million or so?) to build something and then sit on it until the time is right to sell the thing. This is especially true when the thing you are building might have been priced too high in the first place due to a bubble. I wonder what the margin on these homes today compared to the 2005. It would be interesting to find out how much it has shrunk.