Real Estate Sales and House Prices
- Housing Watchdog Group Say Chicago’s Pricing Minorities Out Of City (Chicago Defender, Jan. 24th): "Non-profit Chicago Rehab Network: The number of people who own homes and who are spending more than 35% of their income on their mortgages has climbed significantly over the five-year period… Those paying more than 35% of their income for rentals is up 45%… The median home purchase is $225,000, up from $150,000 just five years ago… You need to make $58,000 (a year) to afford a (home) purchase price today… But household incomes [have declined] over the past five years. Another factor is the loss of 71,000 rental units from 2000-2005… A decrease of over 6%."
Real Estate Investing and Sentiment
- PMI's Winter 2007 Risk Index Reflects Slowing Housing Market (Earth Times.org, Jan. 24th): "Home price appreciation deceleration and decreased affordability caused the risk of home price declines to rise in cities across the country, PMI Mortgage Insurance Co. Market Risk Index scores increased for 34 of the nation's 50 largest metropolitan statistical areas (MSAs), from 328 to 342, which translates into a 34.2% chance that home prices will decline in two years. Nineteen MSAs face a greater than 50% chance that home prices will decline, up from 18 last quarter… In most areas, the risk of price declines continues to be balanced by strong economic fundamentals. With the exception of the upper Midwest."
- Condos Sit Unsold On Coast (Charlotte.com, Jan. 23rd): "Market Opportunity Research: In Myrtle Beach, new and existing condo sales dropped 37% in Q3'06 from Q3'05… N.C. Realtors Association: In Wilmington's less condo-driven market, existing home sales fell 17% in the same July-to-September period. Nearby Brunswick County, home to miles of beach towns, saw a 64% drop… A 30% sales drop on the Outer Banks… Tom Maeser, Real Estate Analyst: There are about 10,000 condos on the market along South Carolina's Grand Strand… For banks in the Triangle [Raleigh area], that's an opportunity to expand to the beach. "The coastal Carolinas has great markets."
- Viera To Revise 'West' Plan (Florida Today, Jan. 23rd): "The plan for the expansion of the Viera community reflects our commitment to the principles of master-planned communities," The Viera Co. President Steve Johnson. "Our goal is to do our best to prepare for and accommodate the growth in Brevard County by creating a highly livable community, while practicing good stewardship of the land and its natural resources." Company officials have said it could take 20 years or longer for West Viera to be fully developed. When built out, West Viera potentially could have more than 17,000 homes, as well as a number of businesses."
- Real estate: Who's Buying Now (CNN Money, Jan. 24th): "Changing American demographics and social norms: Married couples accounting for 61 % of all homes bought, but single-women now purchase 22 % of all homes. Single men accounted for only 9 % of purchases… NYTimes: More women are single than ever before… 51 % of all American adult women now live without a spouse… and are much more financially independent than ever. They account for about 57 % of all college graduates… And they benefit from the many of non-traditional mortgage choices [available] today [like] small cash down loans that help recent graduates and divorcees without equity."
Mortgates and Real Estate Lending
- Home Loan Apps Drop 8.4% (Inman News, Jan. 24th): "Mortgage Bankers Ass'n: Rising interest rates last week [caused] total mortgage application volume to decline 8.4% last week, falling to 611.3 on a seasonally adjusted basis from 667.2 one week earlier… Refinancings took the largest hit last week, as the seasonally adjusted refinance index dropped 9.6% from the previous week, reducing the refinance share of activity to 47.8% of total applications. Applications to purchase homes were down with an 8.4% decline in the purchase index, following last week's 7 % decrease. Adjustable-rate mortgage's share of activity decreased to 20.3% from 21.2% of total applications from the previous week."
- Mortgage Lenders Networks Sends Pink Slips To 830 Workers (Inman News, Jan. 23rd): "About 830 "furloughed" Mortgage Lenders Network employees in Connecticut and four other states are being laid off as MLN [seeks funding] to finance loans made by the company and resurrect its wholesale lending division… MLN shut down the division on Dec. 29 after losing lines of credit used to make loans the company sold to investors in the secondary market. MLN claims to have reached a deal with Lehman Brothers Holdings to finance loans, and said they were shopping for a buyer for MLN's wholesale division while continuing to operate a $19 billion servicing business and retail lending business."
Macro Impact, And Will The Housing Slump Cause A Recession?
- A Dose Of Reality On The Housing Market (Minyanville, Jan. 24th): "D.H. Horton Officer on Smaller Builders: "They are going to be suffering in the next 12 months… large homebuilders are just beginning to put back the lots to the developers. Banks have [not] cut back nearly as much as they are going to on those small and medium-sized builders… They are operating in a period of euphoria currently… that is about to change… as we drive down our prices and drive down our incentives… we are going to make the market much more competitive on them and as you know, they don't have the staying power… At some point commercial banks [will] say you are not going to get the next loan."
- Chamber hears about 'Perfect Storm' (Bradenton Herald, Jan. 24th): "John Swart, president of Lakewood Ranch Commercial Realty… Tells Sarasota Chamber of Commerce what continued effect construction costs, taxes, insurance and impact fees will have on the area… "Much of the stagnation the real estate market is due to the "golden handcuff" syndrome, which prevents homeowners from selling and trading up because they can't afford property taxes and insurance… We are in a recession, but the bottom is near… A good time to buy property… Sarasota needs to focus on adding more office space downtown, since it has only a 3% occupancy rate on 2.5 million square feet."
- Talk Of The Bay (St. Petersburg, Jan. 23rd): "Monster "local employment index" for December, a monthly measure of online job demand in this metro area: "Is Tampa-St. Petersburg's cooling housing market spilling over onto the labor market? December's index dropped three points to 100, the lowest score of the year and one point higher than 2005… Staffing needs among area hotels and restaurants for the winter tourism season were hot areas… [But] Jobs in construction, building and grounds cleaning and maintenance; installation, maintenance, and repair all dipped to their lowest levels of the year… Look for a more moderate pace of job growth in Q1'07."
- Web Site Developer Changes Its Name (Florida Today, Jan. 23rd): "Web site designer eCalton.com Inc. has a new name, Blue Tangerine Solutions… More than 80 % of the company's business is from the homebuilding industry… The downturn in the housing industry has benefited the company, because homebuilders are finding that they "need to spend more effort on marketing" homes… The company's specialties include building Web sites for the homebuilder and real estate industries... eCalton's parent company Calton Inc., [which] trades on the over-the-counter bulletin board, focuses on homebuilding operations."
Homebuilders And Housing Stocks
- Wells Launches Mutual Fund Based on Dow Jones Wilshire Global Real Estate Securities Index (Prime Newswire, Jan. 24th): "Dow Jones Indexes, Wilshire Associates and Wells Real Estate Funds today announced the launch of the first licensed mutual fund to track the Dow Jones Wilshire Global Real Estate Securities Index (WDGAX). Wells: Investors increasingly look to diversify their equity portfolios… [and] seek exposure to REITs and real estate operating companies outside the U.S… Global real estate securities now total nearly $1 trillion in equity… Two dozen countries have created, or are considering, REIT-like structures for investors. The Dow Jones Wilshire Global RESI Index tracks some 240 real estate operating companies (REOCs) and real estate investment trusts (REITs) in 24 countries."
- D.R. Horton's Profit Falls 65%, Beats Estimates (Seeking Alpha, Jan. 24th): "D.R. Horton Inc. reported yesterday that quarterly profits fell 65% during its 2007 fiscal first quarter but shares still gained 4.6% as they came in above analyst expectations. Net income declined to $109.7 million (EPS $0.35), down from $310.1 million EPS $0.98) in the year-earlier period. Revenue slid 1.4% to $2.8 billion…With much negativity already built in and Thomson Financial analysts predicting EPS of just $0.33, the $0.35 EPS reported sent shares higher by $1.24 to a closing price of $28.37. "The results are generally favorable given the environment," said Morningstar analyst Eric Landry."
- The Eventual Demise Of The Free Flat-Screen TV (Mercury News, Jan. 24th): "To unload inventory, homebuilders in 2006 offered all kinds of incentives to potential buyers, from upgraded kitchen countertops… to free flat-screen TVs. But Drew Kusnick, KB Home's top executive in the South Bay, said builders are starting to pull back on incentives in the core Bay Area markets… Things are looking better recently for builders, at least close to the bay… KB sold 60 % more homes in Dec. 2006 than in Dec. 2005, which surprised him… Price reductions is [why]. Prices for new KB homes came down 10 to 20 % last year."
- Centex Shares Slump On Loss, Outlook (ABC Money, Jan. 24th): "Homebuilder Centex reported its first ever quarterly loss of $228.1 million, $1.90/share, in Q4, a reversal from a profit of $329.3 million, or $2.49/share, a year earlier…Revenue fell 7%, to $3.28 billion. Home closings and profit margins dropped… Housing starts plunged by more than one-third, to 7,520.
Centex has already cut its work force by 17 % since last March 31, when it had 18,544 employees. More employees will go… 12-month reductions will be 30% -- more than 5,500 workers… Centex said it expected to break even in the January-March quarter."
- Insurance Bill Passes, Special Session Ends (News Press.com, Jan. 23rd): "The Florida Legislature on Monday concluded its special session on property insurance by passing an insurance bill…on stronger, uniform building codes: Upside: Uniformity of the state’s building code eliminates weaker protections in one area, the Panhandle, where an exemption in place since 2000 enabled homes farther than one mile from shore to be built to lesser standards than in the rest of the state. Stronger codes in general reduce the likelihood of future damage. Downside: Home builders warn of higher housing costs. Rate reductions aren’t guaranteed."
Commercial Real Estate and REITs
- Adler Group To Acquire $300 Million In Commercial Real Estate Through Partnership With UBS (Business Wire, Jan. 23rd): "Adler Group, a commercial real estate firm in the Southeast, and UBS Global Asset Management Real Estate to begin an exclusive equity partnership to acquire commercial property in the major markets of Florida and the Norfolk, Virginia metropolitan area. The partnership intends to acquire up to $300 million in commercial real estate property over the next three years. Adler Group CEO Michael Adler: “Adler Group is launching an aggressive long-term program to acquire and or develop office buildings, industrial and flex properties, as well as retail centers… We are, once again, focusing our efforts to purchasing properties.”
- Adler Group, UBS Partner, Seeking $300M in Assets (Commercial Property News, Jan. 23rd): "Adler Group CEO: This relationship is really a hybrid; we're not married to them but we have an exclusive relationship... It's a combination between the dedicated fund days--when we literally married partners and we both dedicated funds--and the one-off deals that people do today where they find a property and then find a partner. With UBS, everything we find within the three-year window, we'll go to them, and we'll be their only partner. It's a system that will be mutually beneficial. We think it is a template you'll continue to see a lot of."
- EOP Opens Books To Vornado-Led Consortium (FT Alphaville, Jan. 23rd): "Equity Office Properties agreed to give a consortium of investors led by Vornado Realty nine days of access to its books, paving the way for a formal counterbid to be tabled for Sam Zell’s commercial real estate empire. It is likely to be viewed as a victory for Vornado, with partners Starwood Capital and Walton Street Capital, which is seeking to break up an agreed $36bn bid from Blackstone."
- Business Briefs (Rocky Mountain News, Jan. 23rd): "Out-of-state investment companies bought a record $1.1 billion worth of commercial real estate last year in the Colorado Springs area, real estate agents say. The total is more than five times the amount of property purchased by out-of-state firms in 2001, according to Paul Turner, president of Turner Commercial Research."
- CNL Closes Deal On Loon And Resorts At Lake Tahoe (Union Leader, Jan. 23rd): "CNL Income Properties announced in December it had committed $170 million to buy ski resorts Loon Mountain, the Northstar Resort and Sierra at Tahoe in California and the Summit-at-Snowqualmie outside of Seattle... Bretton Woods ski resort and the Mount Washington Hotel properties were acquired by CNL in a similar lease-back arrangement in June 2006 from MWH Preservation for $45 million with an additional $40 million to another company for the golf course and development rights. CNL has pledged another $17.5 million to improve Bretton Woods over the next three years."
- USAA Real Estate Affiliate Buys Louisville Area Distribution Center (San Antonio Business Journal, Jan. 23rd): "A real estate investment trust owned by USAA Real Estate Co. and institutional investors has purchased an industrial property in Shepherdsville, Ky., from Lauth Property Group. USAA Real Estate CEO Pat Duncan: The property is strategically located in a key industrial submarket of Louisville with access to major interstate highways. This transaction makes a good addition to US Industrial REIT II's growing portfolio. USAA Real Estate is a subsidiary of financial services giant USAA. The company has more than $3 billion in assets under management and provides co-investment, acquisition, build-to-suit and development services for corporate and institutional investors."
- California Real Estate Developer Sells Memphis Buildings (Memphis Business Journal, Jan. 22nd): "AMB Property Corp. has sold off its Memphis portfolio for more than $43 million to HSA Commercial Acquisitions. The Memphis portfolio includes 860,000 square feet in several industrial buildings, which AMB purchased in 1998. AMB announced Tuesday that it sold 60 operating buildings for $275.9 million, a total approximately 5.5 million square feet in its portfolio, for $275.9 million. "With these sales, the company disposed of assets that no longer fit its strategy and exited the three non-core markets of Charlotte, Cincinnati and Memphis."
Web Site of the Day
Once upon a time, to get any sort of information about foreclosed properties, or any information about a particular property, foreclosure investors would scour the newspapers daily for foreclosure notices, then head for city hall to fight bureaucracy for snippets of information on it.
Times have changed and now Propertyshark.com offers you all the information you are looking for on any property: A map offers you a selection of real estate information on cities around the country--the east coast, Florida, Seattle-- new cities are added all the time.
In the NY section, the site can tell you property ownership identity, what permit requests have been filed and approved, such as whether a building will be turned into condos or not. There's information on foreclosures, sale listings, maps, zoning issues, prices—you can even comparison shop to see similar properties that have been sold recently and for how much. Interesting perks like pictures of every single property in New York City, round out this site for excellence. A premium subscription will even give you foreclosure information about a specific property and even how to contact the owner.
Though some things are free, like the "Free foreclosure of the week", it's definitely a downside that Propertyshark is subscription based. Still, the hours of time you'll save are probably worth it.
Tracking the Housing Market and Homebuilder Stocks
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.