Real Estate Sales and House Prices
- Latest Promo: Buy A House, Get A Gun! (Barry Ritholtz, Dec. 14th): "There's been no end to the promotional giveaways that builders and agents have come up with to help move inventory. Julie Upton, a Houston-area real estate agent, spurned traditional buyer incentives like free gasoline cards or home improvement store gift certificates. Instead, she placed an advertisement offering a pistol with the purchase of any home worth at least $150,000 in the city police department's monthly publication, "Badge & Gun."
- Housing Market Stronger Than US Sales (RisMedia, Dec. 14th): "Peublo realtor: "We're in a very strong market right now... the number of building permits, coupled with the number of house listings this year are good indicators of 2006 being in line with the housing markets of the past couple of years... The Pueblo market does not suffer the extreme ups and downs of some areas, such as the Colorado Springs market... Pueblo's high foreclosure rate is making for quicker home sales and a smaller figure in the "days on market" category. Pueblo's foreclosure rate is slightly lower than Colorado's rate, which has topped the nation for two consecutive quarters in 2006."
- Tucson Housing Bubble (Housingdoom.com, Dec. 12th): "Tucson Realtor's Ass'n rosy outlook: "The decline from last month in total sales volume is almost identical to the decline from Oct. to Nov. 2005... Average sales price has inched up from last month, a good sign for sellers..." Well, sales in Tucson appear less rosy to me. Some 982 properties were sold in Nov., the lowest number since 929 were posted in January of 2004. Listings have moderated from last month’s 9336 to 9238. However, inventory is 66% higher than last year’s levels. There were 2,380 new homes listed in Nov.- more than double the number of homes sold."
Real Estate Investing and Sentiment
- Speculators Exiting Housing, Builder Says (Delaware Online, Dec. 12th): "NAHB's Pressly: During the five-year housing spree from 2000 to 2005, 20% of buyers were speculators banking that rising prices would result in double digit profits. "It created an artificial demand. Now that the market has cooled and houses are languishing on the market, speculators are fleeing. Some are giving up sizable down payments rather than be stuck with a house bought at the top of the market... Pressly predicts that the market has bottomed out in Delaware and will come into balance in a "relatively short time."
- Brokers' Commissions (Calculated Risk, Dec. 11th): "One of the incredible stories of the housing boom was the surge in brokers' commissions over the last 5 years. Brokers' commissions are included in residential investment, and are the third largest category behind new single family residential construction and home improvements... the increase in house prices is the second most important factor with respect to the rapid increase in commissions (as percent of GDP). The most important was the increase in turnover of the existing stock. The extraordinary level of sales for the last few years, reaching 9.5% of owner occupied units in 2005 when the median level is 6.0% for the last 35 years."
Mortgates, Foreclosures and Real Estate Lending
- Colorado No Longer Tops In The Nation In Foreclosures (Newwest.net, Dec. 13th): "In November, a 10 percent drop in filings there, coupled with a 12 percent increase in filings in Nevada, moved Colorado from No. 1 to No. 2 in the nation. Colorado economist: The number of Colorado foreclosures to continue to decline; rise in Arizona, Nevada, California and Florida... A worsening in other states’ markets doesn’t mean the slide is over in Colorado. Bank of America economist Tucker Hart Adams said housing prices in Colorado will continue to decline, as will housing sales and construction of new homes."
- Housing Market Recovery? (Seeking Alpha, Dec. 13th): "The Mortgage Bankers Association [MBA] reported that mortgage applications, which include loans for home purchases and refinancings, increased 11.4% last week over the prior week, and now stand 22.2% higher than the same week a year ago and at their highest since October 2005. Applications for loans to purchase a new home rose 8.7% over the prior week, down 3% over the same week last year but at the highest level since January. Refi applications are up 60% from a year ago, and accounted for 53.6% of all applications. Average mortgage interest rates have fallen... Meanwhile, the delinquency rate on family residential mortgages rose."
- WaMu CEO: Mortgage Biz Looks Tough In 2007 (CNN Money, Dec. 13th): "Kerry Killinger, CEO of the largest US Savings & Loan said the U.S. mortgage industry faces overcapacity and unsustainably low margins. Says WaMu's forecast was lowered, allowing for "A sweeping correction in U.S. housing prices that would lead to higher delinquencies and loan losses... Foresees the possibility of "multiple years" of housing prices lagging inflation and other asset classes..." WaMu has fired one-fifth of its mortgage unit, part of an overall work force reduction of 16 percent of its work force. Many of its rival mortgage lenders have yet to take the needed steps to reduce capacity, Killinger says."
Macro Impact, And Will The Housing Slump Cause A Recession?
- The Main Factors Impacting Housing Affordability (Richard Shaw in Seeking Alpha, Dec. 14th): "Mortgage rates and energy costs definitely contributed to the housing affordability situation. But are they the main problem? Under-reported is the impact of periodic municipal revaluation of homes during the easy money period of house price inflation. Many towns and cities chose to ramp up spending instead of lowering mill rates when their property grand lists did a melt-up... Conceptually, the money we all saved by refinancing has been more than consumed by the rise in property taxes associated with the rise in housing values."
- Retail Sales: Where's The Housing Chill? (MSNBC.com, Dec. 14th): "November U.S. retail sales report: Retail sales surged 1.0% for the month, after a revised 0.1% decline in October. Economists and Fed policymakers: the pass through of weakness from the housing sector is thus far limited even if it remains the risk, the slowdown is proving 'orderly'. Both the firming evident in most housing market data since the big June-August downsizing and the robust uptrend in the Mortgage Bankers Assn. data over the last three weeks -- as well as other recent signs of reversal in the real estate market -- suggest that the correction for sales is likely approaching the end, though there will be lagged construction sector effects well into 2007."
- World Bank Says US Is Leading Global Slowdown (Scotsman.com, Dec. 14th): "World Bank: Developing countries are in the driving seat, with growth to reach 7 per cent in 2006, twice as high as in developed countries, then falling to 6.4 per cent in 2007 and 6.1 per cent in 2008. The report said a soft economic landing remained likely, but warned that a cooling US housing market could be the catalyst to spark a sharper-than-expected downturn, and even a recession, which could have a major impact on developing nations. Much slower growth would cause commodity prices to weaken, potentially placing in difficulty many developing countries that had so far avoided current account problems."
- Minyanville's Daily Five Things You Need To Know To Stay Ahead Of The Pack On Wall Street (Minyanville.com, Dec. 13th): "The latest FOMC statement: "Economic growth has slowed over the course of the year, partly reflecting a substantial cooling of the housing market." In the course of seven months the housing market has gone from gradual cooling to cooling to substantial cooling... Speaking of spillover... October's reading in the Furniture and Home Furnishings category was revised sharply downward to a 0.7% decline from the previously reported 0.3% decline."
- In The Poor House: Housing Downturn Hits City Budgets (Metrowest, Dec. 12th) Colorado: "A nationwide downturn in new housing construction in the last year has left some Adams County municipalities with strained budgets and incited cuts and spending freezes... In Commerce City, less than half of the building permits for residential houses the city expected during initial budgeting for 2006 have been issued to date. That’s caused cuts and freezes to the 2007 budget, “ranging from office supplies to buying replacement vehicles and capital projects" From the 2007 budget, $270,000 was cut and $5.1 million has been frozen to account for the smaller number of houses permitted than expected."
Homebuilders And Housing Stocks
- Orleans President and COO Sells Shares (AP, Dec. 14th): "The president and chief operating officer of Orleans Homebuilders Inc., which makes single-family homes, sold 14,543 shares of common stock, according to a Securities and Exchange Commission filing Wednesday. In an SEC filing, Michael T. Vesey reported he sold the shares Monday and Tuesday for $15.50 to $17.20 apiece. Orleans Homebuilders is based in Bensalem, Penn."
- United Technologies Forecasts Stronger Defense Sector And Housing Market, Falling Commodities Prices (Seeking Alpha, Dec. 14th): "Tech behemoth United Technologies Corporation expects earnings to increase by 10-14% in 2007 according to Chairman and CEO George David... [Two of] the reasons for the increased earnings projection... The price of most commodities is expected to fall. David also sees the housing market bottoming next year and beginning its turnaround meaning additional revenue for United Technologies. Its shares are up 15% this year."
- Home Building Plunges 48% In November Fort Wayne.com, Dec. 13th) Indiana: "Fort Wayne Home Builders Ass'n: Home construction in Allen County last month lagged nearly 48 percent behind November 2005. Builders received 79 home construction permits last month, down from 151 permits in November 2005. Allen County has issued nearly 38 percent fewer permits for home construction so far this year than it did during the first 11 months of 2005: 1,027 permits between January and November this year, compared with 1,655 permits during the same period last year."
Commercial Real Estate and REITs
- Houston Firm Seeks 485,000 Shares Of Hartman REIT (Chron.com, Dec. 14th): "A Houston real estate firm has announced an offer to buy up to 485,000 shares in Hartman Commercial Properties REIT, a local real estate investment trust, for $10 a share. American Spectrum Realty, whose recent bid to acquire all of the REIT's shares for about $99 million was rejected, said the offer to buy nearly 5 percent of its shares is being made directly to the shareholders."
- REIT's Portfolio Grows By Three (Washington Times, Dec. 14th) Wash. D.C.: "Investors continue to pour huge amounts of money into commercial real estate because of the high returns they have received in the past five years, much of it financed with debt... If the economic slowdown continues to the point of recession, job losses come with it, followed by a higher vacancy rate for commercial real estate. Real estate firm Marcus & Millichap says about 91 million square feet of new office space nationwide will be delivered in 2007, but the firm adds that only 75 million square feet of the space will find tenants."
Web Site of the Day
Inman News is, well, a 'nuts and bolts' real estate trade site-- something of a one-stop shop for all aspects of real estate buying, selling, owning, mortgages and more.
The site's popularity stems from its residential and commercial syndicated columnists and myriad how-to guides (check out the "home-defect library"-- a guide to common home defects to look for when buying). But the real estate anecdote blogs, a glossary of real estate terms, q&a section with tips on buying/selling homes, mortgages and in particular, the ongoing articles and discussions on topics like technology and real estate laws are all useful to investors and homeowners alike.
Inman also sponsors information and technology conferences for the real estate industry around the US. Where "executive-level real estate professionals, opinion leaders, technology giants, industry experts, and press gather for biz dev, information and idea exchange, discussion and debate." In other words, good opportunities for networking and investments.
|Tracking the Housing Market and Homebuilder Stocks |
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