All the conventional rules of timing and location should make Barry Rutenberg's profitable homebuilding business especially robust these days. His Gainesville, Florida, company is in one of the fastest-growing parts of the fast-growing Southeast, and the spring buying season is under way. Money is easy: fixed-rate mortgages have fallen to 8.2% for a 30-year loan. But fewer people are poking through his developments, and Rutenberg recently sold a home for $208,000, at a loss of $24,000. "This was the first time I had to sell a home below cost this decade," he says.
If Rutenberg is taken aback, it is because...