Caruso Homes filed for bankruptcy protection Monday after a cost-cutting campaign failed to sustain the local builder through the housing downturn.
Caruso, which is based in Crofton and builds homes throughout Maryland and Virginia, said in its Chapter 11 filing in Baltimore that it has more than $100 million in debt.
“The housing market is experiencing a challenging economic cycle, which requires proactive financial management,” Jeffrey V. Caruso, the firm’s sole owner, said in a statement. “I am proud of how our management team has acted quickly to address the current volatile real estate market.”
Caruso joins many other home builders stumbling through the downturn. New home sales in April were off 42 percent nationally compared with a year earlier, and the May report, due out today, is not expected to show improvement.
“It is not surprising that we’re seeing more of the smaller and mid-size builders end up in bankruptcy,” said Mike Larson, a housing analyst at Weiss Research in Jupiter, Fla. “They do not have the financial resources, the borrowing capability to ride out these extensive downturns.”
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