If you aren’t already convinced that the housing market is in big trouble, maybe this article from Saturday’s Des Moines Register will change your mind:

Iowa’s largest home builder, Regency Cos. of Des Moines, has laid off the entire staff of its home building business and left behind 300 homes that lenders and buyers will now have to sell or finish.

Jamie Myers, president of Regency, told 103 people working at Regency Homes offices in West Des Moines and Cedar Rapids on Friday afternoon that their jobs had been eliminated and that construction would halt. Myers said it became impossible for the company to continue after a lending agreement with Wells Fargo & Co. ended in December without a renewal.

“We don’t have the cash flow to pay them,” he said of employees.

Myers said it’s hoped that enough money will be generated from the sale of homes already built to pay lenders and contractors.

Myers didn’t rule out a bankruptcy for the company, which concentrates in the Ames, Cedar Falls, Cedar Rapids, Des Moines and Iowa City areas.

The prize for the most absurd spin of the week has to go to Rich Krier of Krier Homes Inc. in Indianola, who

didn’t see Regency’s troubles as a particularly bad omen for the Iowa home building industry. “It’s like a borrower having a problem with a bank,” he said.

He cannot be serious. Regency is not just like any old borrower. We are talking about the giant among home-building firms in Iowa. If Wells Fargo pulled the plug on their loan arrangement, they must be pretty sure that the housing market is in a severe downturn.

The archives of the Bonddad Blog have plenty of material explaining the housing bubble and subsequent downturn.

I wish we could get back some of that prime farmland that home-builders turned into suburban housing. Clearly the new housing that has been built in recent years exceeds market demand in Iowa.