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Arizona Builder's Troubles Reflect Housing SlumpThe nation's home builders continue to fall on hard times. Scottsdale-based Meritage Homes is the latest hit by the slowing housing market. Arizona's only publicly traded home builder must write off $100 million on land and operations after a second quarter in which home orders fell 28% and new-home cancellations climbed to 37%, according to preliminary numbers released Friday. Housing is Arizona's biggest industry, and the slowdown is building ripples throughout the economy from job losses at contracting firms to weaker sales at furniture stores. Analysts and builders are now looking to 2008 for any kind of market upswing. "One hundred million dollars is a lot of money, but I am not surprised by Meritage's write-down," said national housing analyst Tim Sullivan of the San-Diego based Sullivan Group. "Every builder is doing it now; the housing market has more pain ahead of it."RL Brown, publisher of the Phoenix Housing Market Letter, is downgrading his earlier forecast for home building. In January, he predicted 41,000 new homes could go up Valley-wide. That compares with 42,460 new-home permits issued in 2006 and a record 63,570 in 2005.New-home cancellations have left the Valley's housing market with at least 20,000 homes built but unsold. Builders have offered hefty incentives of $50,000 and more to sell the houses, but many potential buyers can't sell their existing homes. The result is a glut of homes for sale that is putting pressure on prices and dragging down the market.Meritage's write-off translates to about a $60 million hit to its second-quarter income. During this year's first quarter, the company reported a net income of $15 million, compared with $79.7 million the year before. Analysts expect to see more of the same problems among other big U.S. builders because the companies need to sell their spec homes and excess land. In 2005, investors inflated demand for new homes. Builders rushed to buy land, often paying top dollar, & construct homes fast enough to keep up with demand. Prices peaked in many speculator-driven markets like Southern California, Las Vegas, Phoenix & Florida, and demand plummeted. The value of some land bought during the market frenzy has fallen, which accounts for a lot of the recent home builder write-offs. For example, if a builder purchased a lot for $100,000 but it's now valued at $75,000 accounting rules require the builder's balance sheets to show the drop. "It's the market correcting," Sullivan said. 