While Concordia Homes is not going out of business, they will cease selling homes in Nevada.  They will be returning deposits on homes where construction has not yet begun. Five active subdivisions are being shut down. Here’s an interesting quote from Dennis Smith of Home Builders Research:

This is not strictly about demand. This is also credit. You’ve got buyers and you can’t get loans approved. What do you do? You close subdivisions.

Clearly the “credit crunch” will impact the recovery of our housing market. In this case, it’s reducing future inventory.  While this seems like a good thing for right now, I am forced to wonder if it will still be a good thing a year from now.