Housing Bubble and Real Estate Market Tracker

Here's our summary of articles and data points on the housing market. It's part of Seeking Alpha's coverage of the real estate market and homebuilder stocks. Like all other topics and stock coverage from Seeking Alpha, you can get this sent to your blackberry or desktop email by signing up for our no-spam free email subscription service.

Real Estate Sales and House Prices

• Houses Go From Selling In A Day To An Average Of 9 Months (The Ledger, Jan. 14th) Lakeland, Fla.: "Polk County: There were 4,215 listings for homes, condominiums and townhomes throughout the county last month. But in that time, only 362 sold, a 26% drop from 488 in December 2005, according to the most recent data from the Mid-Florida Multiple Listing Service. Broker: "With so many homes currently listed in Lakeland and in Polk County, sellers need to make their home stand out, and the most effective way of doing so is to reduce the price."

• Condominium Sellers Throw In Some Perks (Houston Chronicle, Jan. 13th): "A Houston condo market slowdown? Condo converters who turn apartments into for-sale units are offering buyers valuable perks to purchase condos… [like] 100% financing on units and a $2,500 incentive for realtors… In Florida, overzealous developers created a glut of units by converting numerous apartment buildings to condos, causing prices to fall... Houston's had its own boomlet, and competition is mounting. Price increases for condos and townhomes here have been marginal... In November, the median sales price was $120,700, up less than 1% from the same month the previous year… sales were up just 1.5% to 535 units."

Real Estate Investing and Sentiment

• Entrepreneur To Build Affordable Housing In Former Wonderland Water And RV Park (Mississippi Press, Jan. 17th): "The Santa Maria was once Wonderland Park, a water park and RV park... MLU Services bought the property in November '05 and it became an RV and trailer park… CEO Bill Ulm has long-range plans to build on the Gulf Coast because the need for affordable housing is still so great… having a trailer park makes housing employees easy. "We're looking at land from Gulfport to Pascagoula… Mainly to build subdivisions with houses in the affordable range. The price of the land is what's slowing us down right now. Property prices down there are crazy right now."

• MLSs Tear Down Data Walls (Inman.com, Jan. 17th): "A group of 14 Realtor associations, which represent 10 regional multiple listing service providers have created a data-sharing system, reducing the need for real estate professionals to join several MLSs to serve their clients… David Charron, CEO of Metropolitan Regional Information Systems, the largest MLS in the country, called for data standardization and regionalization in November... The NCREX will consolidate four MLSs in the Greater San Francisco Bay Area, while another [local] effort will allow users of other MLSs to share data without having to join multiple MLS… Connecticut MLS's are also forming a statewide MLS."

• Future Of Real Estate Is Here (Free Press Releases, Jan. 15th) Tennessee: "Gone are the days of expensive commission fees to listing agents who list properties in MLS's (Multiple Listing Services). This commission would generally vary between 4% - 6% of the sale amount. Keep3Percent.com, a Tennessee based organization, charges a flat fee ranging from $250 to $500 and no listing commission for MLS property listing packages for all property sellers… Home sellers would have to pay only the buyer agents a commission of about 2% - 3%."

Mortgates and Real Estate Lending

• Wells Fargo 4Q Profits Surge (The Mercury News, Jan. 16th): "Wells Fargo & Co.'s (WFC) Q4 profit rose 13% as the nation's fifth largest bank shook off a mortgage lending slowdown by accelerating its efforts to sell other products and collect more service fees. WFC earned $2.18 billion, or $0.64/share, in Q4'06, compared with net income of $1.93 billion, or $0.57/share in Q4'05. The performance capped the most profitable year in Wells Fargo's 154-year history -- a byproduct of an aggressive sales stance that the bank adopted in 1998 when new management took over after a merger with Norwest Corp."

• Long & Foster Sales Close To Record Highs (Daily Times, Jan. 16th) Maryland: "Despite high supply and low demand in the residential real estate market throughout its seven-state mid-Atlantic region during 2006, Long & Foster, the largest privately owned real estate firm, reported $65.1 billion in sales [a decline of just 2% from 66.5 billion in '05] of homes, mortgages, insurance, title insurance and settlement services during 2006… Along with $38.2 billion in real estate sales, Prosperity Mortgage, the firm's mortgage affiliate, reported a 19% decline to $4.2 billion; Long & Foster Insurance-- an increase of 10%; Long & Foster Settlement Services reported $18.5 billion in title business, up $6 billion or 48% over '05."

• More Gains In Overnight Real Estate Rates (Inman News, Jan. 15th): "Long-term mortgage interest rates pushed higher Friday, and the benchmark 10-year Treasury bond yield rose to 4.77% . The 30-year fixed-rate average gained to 5.77%, and the 15-year fixed rate was up at 5.54%. The 1-year adjustable edged up to 5.36%. The 30-year Treasury bond yield increased to 4.86%. Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5."

• The Tainted & The Prime: Mortgage Lenders Shake Out (Blogger News Network, Jan. 15th): "According to MLN President Mitch Heffernan, subprime loans weren’t the main culprit in MLN's case… In an attempt to balance out their subprime defaults, MLN began marketing a new loan product in October called A-plus-plus, [but] those loans were mispriced. Origination rates for the A-plus-plus loans were intended to be below those of conforming (or “prime”) loans... In two short months a low ball pricing error on MLN’s A-plus-plus loans made warehouse lenders undercut all MLN loans including the subprime ones. It’s as if prime and tainted had melted, in the wink-wink of an eye, into one indistinguishable mass."

• Hundreds Of Foreclosed Metro-Detroit Homes To Be Auctioned Off (Detroit Free Press, Jan. 14th): "300+ foreclosed residential properties in metro Detroit auctioned off Saturday… Hudson & Marshall auction house, which sells foreclosed properties throughout the US, says it's the largest sale for any metro area in five years. H&M: "[Detroit] is a very depressed economic market", posting the nation's second-highest foreclosure rate for the second month in a row… 3,333 properties entered foreclosure in November, a rate of one new filing for every 248 households. One investor on why he's buying now: "Detroit is going through a revitalization period, businesses are investing money in metropolitan Detroit."

• High-risk Lenders May Face Lawsuits (Providence Journal, Jan. 14th): "According to a report last month by the Mortgage Bankers Association, delinquency rates for the three-month period that ended Sept. 30 rose to 2.44% from 2.29% for loans to those with high credit ratings, or prime borrowers. In the subprime market, delinquencies rose to 12.6%, from 11.7%."

• State Housing Division Starts Offering 40-Year Mortgages (Builder Online, Jan. 13th) Nevada: "The State Housing Division is offering 40-year fixed rate mortgage loans in addition to 30-year loans in an effort to help more first- time home buyers qualify for home loans… Nevada housing prices have skyrocketed in recent years, making it hard for first-time buyers to afford homes. Gov. Jim Gibbons: "One of my goals is to create more affordable housing through the state's Housing Division and its partnership with the private sector's mortgage lenders… Since 1977, the Housing Division has been using tax-free bonds to finance home mortgages for low-to-moderate income families for 30- year terms."

• Bies Says U.S. Lenders Should Tighten Standards (MSN Money, Jan. 11th): "Federal Reserve Governor Susan Bies said on Thursday looser underwriting standards were partly responsible for recent rises in late mortgage payments and that lenders should tighten risk management practices… Bies was referring to increasing delinquencies among so-called subprime borrowers who are considered higher risks. Bies noted that banking regulators had advised lenders last September to beware of the risks associated with nontraditional loans. She said supervisors "are concerned that current risk-management practices may not fully address the entire set of risks inherent in nontraditional mortgages -- risks that could be heightened by current market conditions."

Macro Impact, And Will The Housing Slump Cause A Recession?

• Housing Slump Will Help Spur Retail Slowdown In S. Florida, Economist Says (Sun Sentinel, Jan. 17th): "The National Retail Federation predicted that retail sales will increase 4.8% in '07, a noticeable slowdown for the industry, which reported that sales grew 6.3 percent last year despite a downward trend as the year progressed. NRF Chief Economist Rosalind Wells blames a dramatic drop in 2006 sales at building material, furniture, electronic and appliance stores for the subdued outlook. Sales growth at those stores slid from 16.5 percent to 2.5 percent last year. The slowdown in the national housing market will undoubtedly continue to impact furniture and home improvement stores, but luxury home furnishing stores are an exception."

• Leading Economic Indicators (Jan. 15th): "Seven out of the last eight times the annual rate of change on permits was negative 20% or lower, the economy went into a recession... The chart shows that building permits in November dropped 31% from the year earlier level. In all seven recessions since 1959 building permits declined year over year... Dips below the 0% line tend to occur well before the onset of recessions. Leading indicators are supposed to lead and this one does. A crossover of 0% is a strong warning and a continuation below the zero line shows that a recession is likely."

• U.S. Laminate And Vinyl Flooring Market Set To Pass $4 Billion By 2010 (PRLeap, Jan. 12th): "Positive U.S. economic trends coupled with easy-to-install options for DIYers have spurred growth in the laminate and vinyl flooring industry, with the market increasing nearly 8% from 2001-2005 and the supply value topping $3 billion in 2005. As the remodeling boom continues, the market should see healthy gains, exceeding $4 billion by 2010, according a MarketResearch.com report… Laminates [to] grow from $1.2 billion in 2005 to more than $1.9 billion in 2010… The vinyl sector is expected to grow more slowly than laminate flooring to reach $2.4 billion by 2010."

Housing Affordability

• The Price of Living in Paradise? (Orlando Sentinel, Jan. 13th): "Housing prices have risen in the Orlando area beyond what is affordable for many Floridians with Florida salaries. Many companies do not align salaries with the cost of living… Eventually people won't be willing to pay the "sunshine" tax and will head for less-expensive areas... Many Floridians are fed up with the rising insurance costs and the inability to move up or elsewhere in Florida due to escalating real estate prices... Many are originally from the northeast and are referred to as "half backs" because they plan to move to North Carolina, which is about halfway back home."

Homebuilers And Housing Stocks

• Lennar Posts Loss on Land Writedowns; Revenue Drops (Bloomberg, Jan. 17th): "Lennar Corp., the fourth-largest U.S. homebuilder, reported its first quarterly loss in a decade... Net loss for Q4 was $195.6 million, or $1.24 a share, compared with a profit of $581.2 million, or $3.54 a share, in Q4'05… Three U.S. builders reported over $1.3 billion in land writedowns this week. Lennar CEO: "Despite uncertainty… we believe… we will meet or exceed 2006 earnings of $3.69 per share." BB&T Capital: "The fact that they have the confidence… that they're going to meet or exceed $3.69 a share, is ballsy to say the least.'' Shares rose as much as 5% in afternoon trading."

• Weak Housing Forecasts Foretell Further Downside (Seeking Alpha, Jan. 17th): "The housing industry continues to struggle with rising loan defaults and slow sales: (1) IndyMac, a top-10 U.S. mortgage lender, said it now expects Q4 earnings of $0.97/share (Jan. 25), down from its original forecast of $1.30-1.40 and $1.06 last year. IndyMac blamed its shortfall on higher provisions for defaults, repurchases of soured loans earlier sold to investors, declines in loan values, and a margin squeeze between its funding costs and the interest rates it receives from borrowers. (2) Homebuilder Centex said it expects a loss of $2/share (Jan. 23) for its F-Q3, vs. $2.37 last year, for $300 million land value write downs and record a $150m loss on abandoned land purchase options.(3) KB Home also adjusted previous estimates to take a $343 million property charge this quarter."

Municipal Efforts To Fight Housing Backlash

• 'Vasectomy Housing' Surges in New Jersey as Property Tax Remedy (Bloomberg, Jan. 17th): "Educating a child in New Jersey costs an average of $12,567 a year, the most in the nation and more than double the property tax parents typically pay. So local governments have hit upon a way to expand the tax base without the expense of higher enrollment: age-restricted housing… NJ developers have responded by building an estimated one-fifth of the country's adults-only housing… leading a national trend fueled by baby boomers seeking new homes after their children move out… More than half the housing units started in NJ in the past two years have excluded children."

• New Jersey: Nearly 50 percent Of All Housing Built In 2005 Was Of The Age-Restricted Variety (Seniorscopie.com, Jan. 16th): "New Jersey: The region's graying baby boomer population is fueling demand for senior housing. Developers know senior housing is more likely to receive the municipal approval, and demand still outstrips supply. Seniors are coveted by municipalities for their tax dollars and relatively minor impact on services. [Do] luxurious senior housing projects, which start at upward of $300,000, actually meet the needs of the region's seniors who want to downsize from large homes and high tax bills? The number of US seniors over 65 is expected to double to more than 60 million by 2020."

• 60 Lots Identified For Possible Sale (San Diego Chronicle, Jan. 14th): "San Diego's real estate division is hoping to make millions on land that has languished for decades… It has started pulling a list of "surplus" property from its massive portfolio and giving public entities first dibs. The city, squeezed for cash by a crumbling infrastructure and billion-dollar pension deficit, hopes to put land on the market by June… Last fall, Mayor Jerry Sanders proposed selling land and signing new leases to make $102.5 million by 2012. The plan estimates land sales and new leases will bring in $15.3 million in fiscal 2008 and $21.8 million in the following four years."

Commercial Real Estate and REITs

• Ventas to Buy Sunrise Senior Housing REIT for $1.8 Billion (Seeking Alpha, Jan. 16th): "Healthcare REIT Ventas will enter the Canadian senior housing market by acquiring the Toronto-based Sunrise Senior Living REIT for approximately $1.8 billion in cash and debt. The price amounts to about C$15 per unit, a 35.7% premium over the units' Friday close… Ventas expects Sunrise's communities to increase revenue from private pay assets to about two-thirds of total revenue. Total revenue from the communities is forecast at around $387 million in 2007, with net operating income of about $132 million. Ventas has also acquired exclusive right of first offer for other new assets in Canada and the US."

• Liquidity And The Global Bull Market Of 2007 (Goldseek.com, Jan. 15th): "Since last fall we’ve pointed out that the Dow Jones REIT Index (DJR), was sending an undeniable signal that the real estate recession was soon to end… Leading indicators show the housing downtrend will not continue and the steady, impressive increase in monetary liquidity in the past few months will virtually assure a soft landing and probably even a mild upturn in real estate by no later than summer… Lower interest rates, increased mortgage lending and the bottoming in lumber prices all point to the inescapable conclusion that reports of real estate’s demise are entirely premature."

• Sunrise REIT Looking To Cash In On $2.14B Offer From U.S.-Based Ventas (CBC News, Jan. 15th): "Sunrise CEO Douglas MacLatchy: "The board looked at its options and saw companies like ours trading at a higher premium in the U.S. market than they were in Canada." REITs perform better in the US [because] there's a fairly robust M&A market and acquisition market in the United States, which there isn't as much [in Canada]."

• NHP, State Pension Fund Team Up On $475M Joint Venture (Commercial Property News, Jan. 14th): "Nationwide Health Properties has entered into a $475 million joint venture with an undisclosed state pension fund advised by Morgan Stanley Real Estate, to grow its senior housing portfolio by acquiring and developing assisted living, independent living and skilled nursing facilities… The deal calls for the joint venture to be funded with approximately 40% equity contributions and 60% debt. Institutional investors will own 75% of the joint venture, with Nationwide Health Properties owning the remaining 25%... Senior Housing Investment Advisors: "[Deal is] representative of the continued inflow of capital into the senior housing sector."

Web Site of the Day

The Silver Fern website is run by the Boulder Colorado ReMax team, Osman Parvez and Dallice M. Tylee. Parvez is the MBA side of the business according to the website, Tylee is the interior design and landscape side of it.

Silver Fern features monthly reports on Boulder and the surrounding areas they serve-- places like Broomfield, Erie, Lafayette, Longmont, Louisville, and Superior and much more. The monthly reports offer graphs on median sales prices, inventory, average days to contract and sales volume.

What interests us is that the graphs, assuming they are accurate, offer some bright points to counteract the doom and gloom about the Colorado market. Inventory and sales price upticks, however slight, could be a facts-on-the-ground indication that at least for Colorado, things might be turning around.

Tracking the Housing Market and Homebuilder Stocks You can track developments in the housing market and homebuilder stocks by bookmarking our Housing coverage or subscribing to our free email service. If you have a blog or website of your own, you can track developments in the sector and provide great content for your readers with our Housing Market widget (left). It's simple to add -- just select "Housing Market" from the drop-down menu here.