Neumann homes, a top Chicago homebuilder, will file for Chapter 11 bankruptcy protection, the Chicago Tribune reports, making it the second-largest builder felled by the dive in the housing market. The company has laid off all but 20 of its 110 workers. “I’m not overly optimistic about the future of this industry right now,” said CEO Ken Neumann. Other area builders could follow, Bloomberg warns.
Boom-era cash has kept builders afloat so far, but with Chicago-area new-home starts down 25% and closings down 40% in the second quarter, many are feeling the squeeze. “They managed to survive two years, but it’s starting to end for a lot of people now,” said one analyst. Neumann built in several states, but was especially hurt by the Detroit market, where it lost $60 million.