Oct. 30--M/I Homes' sales for the third quarter jumped 36 percent and its losses narrowed, but the company's chief executive cautioned yesterday that the housing market remains bumpy.

"While the recession is technically over, there's still concern about job growth and other things that impact our industry," Robert Schottenstein said.

The biggest concern for the industry: What happens when the $8,000 federal tax credit for first-time homebuyers expires Nov. 30?

Schottenstein reiterated his support for extending the tax break, which he credited for some of his company's strong sales during the quarter.

For the three months that ended Sept. 30, M/I's new-home contracts rose 36 percent -- to 619 homes compared with 456 in the year-ago quarter -- and its home deliveries rose 20 percent from last year.

The increases helped central Ohio's largest homebuilder cut its losses to $21.1 million, or $1.14 per share, compared with a loss of $58.7 million, or $4.18 per share, during the third quarter of 2008.

After one-time charges of $15 million in asset impairments and $4.4 million related to imported drywall, the company lost $1.2 million during the third quarter.

Despite the improved earnings, M/I's stock continued its two-week slide yesterday, closing at $11.73, down 22.7 percent from its Oct. 14 close of $15.18. Other homebuilders have experienced similar drops, driven in part by concerns that the housing market will tumble if the tax credit is not renewed.

"I believe the credit will be extended, and if it's not, there will be a little softening of sales," Schottenstein said.

Despite the rise in home sales, M/I's revenue continued to drop, from $160.4 million in the third quarter of 2008 to $152.7 million this year. The average price of an M/I home slipped from $272,000 last year to $248,000 this year, illustrating the effect of first-time homebuyers choosing lower-priced houses.

Through the downturn, M/I has picked up market share and now accounts for about 32 percent of all new homes sold in central Ohio.

"We think we're extremely well-positioned for the recovery," Schottenstein said. "Our market share is increasing in almost all of our markets now. The unfortunate thing about this recession is that a lot of the competition has been reduced."

jweiker@dispatch.com

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