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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.

Quotes of the Day- "From the House's Mouth"

"You can't buy a used car for that… It's a gamble, and you have to wonder how low it's going to get." – Steve Izairi, 32, referring to a four-bedroom Detroit house which sold for $7,000. Izairi bought two rental properties in Detroit two years ago for $70,000. They are now selling for $35,000. (Yahoo! Finance, Mar. 19th)

"Everything's come down now, price-wise, but even the crack houses in Main South are $350,000."-- Harold Avery, individual real estate investor, on the Massachusetts market. (Worcester Business Journal, Mar. 19th)

Real Estate Sales and House Prices

  • Coastal Prices Leveling Off (The Register Guard, Mar. 21st) Eugene, Oregon: "After five years in which median sale prices for homes in the Florence area surged more than 100%, to $243,000, buyers have backed off. There were 320 homes sold in and around Florence in 2006, a steep drop from the 449 houses sold in 2005 and the 561 the year before that, said Tawfik Adhab, a Eugene appraiser... "Florence home sales fell by 29% from 2005 to 2006, nearly triple the county average."
  • Local Median Home Price Declines (Palm Beach Post, Mar. 21st): "Florida's Illustrated Properties RE: The median price of existing homes declined from January ($300,000), but remained unchanged from a year ago: $285,000… The inventory of unsold homes rose to a near-record high of 23,713, nearly [matching] September's peak of 23,886. Inventory stood at 17,842 in February 2006, making last month's tally of unsold homes a 33% increase y/o/y… February sales declined 44%, y/o/y, to 623 from 1,106 in February 2006. [Currently] inventory represents a 38-month supply of homes. Days on market declined from January (140 days) but rose sharply from a year ago (86 days), climbing to 135 days in February."
  • Houses Cheaper than Cars in Detroit (Yahoo! Finance, Mar. 19th): "Detroit has emerged as a boomtown in one area: foreclosed property… The city, which has lost more than half its population in the past 30 years and struggled with rising crime, failing schools and other social problems, largely missed out on the housing boom… At least 16 Detroit houses up for sale on Sunday sold for $30,000 or less. A boarded-up bungalow on the city's west side brought $1,300. A four-bedroom house near the original Motown recording studio sold for $7,000… Detroit, where unemployment runs near 14% and a third of the population lives in poverty, leads the nation in new foreclosure filings."
  • Trulia Trends Report Highlights How Consumers Search for Residential Real Estate Online (PR Newswire, Mar. 19th): " real estate search engine reports: February's hottest cities: Manhattan, Philadelphia, Brooklyn, Washington, DC, and Queens. Southern cities Virginia Beach, VA, Memphis, TN and Charleston, SC were three of the five biggest winners in month-over-month median list prices increases. Los Angeles experienced a 3.6% increase in median list price…Minneapolis experiencing a 50% month-over-month increase in search queries, while both Naperville, IL and Cincinnati, OH were part of the top five "biggest losers" in terms of search queries."

Real Estate Investing and Sentiment

  • New Home Starts - Nothing to Write Home About (Barry Ritholtz in Seeking Alpha, Mar. 21st): "Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,525,000. This is 9.0% (±10.2%)* above the revised January estimate of 1,399,000, but is 28.5% (±6.2%) below the February 2006 rate of 2,132,000. Single-family housing starts in February were at a rate of 1,220,000; this is 10.3% (±8.8%) above the January figure of 1,106,000. The February rate for units in buildings with five units or more was 266,000. Privately-owned housing starts… plus 9%, is less than the margin of error of ±10.2%, and according to Census Bureau, "is not statistically significant; that is, it is uncertain whether there was an increase or decrease."
  • Housing and Subprime: Enough Already - This Was No Surprise (Todd Sullivan in Seeking Alpha, Mar. 20th): "Even if we hit a 20% default rate among subprime ARM holders… that is only about 1% of the national mortgage market… We are in a housing trough now and probably will remain here until the new home inventory is worked offHousing Inventory chart… the NAHB/Wells Fargo Housing Market Index declined three points… to 36 in March… Pessimistic builders will refrain from new projects, further reducing inventory. Another reason the market may have bottomed? Famed "legendary stock picker" Bill Miller of the Legg Mason Value Trust (MUTF:LMVTX), recently bought homebuilder Centex (CTX): 597,000 shares (cost: $28.4 million); total position now 6.1m shares."
  • U.S. Economy: Housing Starts Rebound From 9-Year Low (Bloomberg, Mar. 20th): "Commerce Department: Housing starts rebounded in February from a nine-year low… to an annual rate of 1.525 million last month, up 9% from the prior month and more than economists forecast. Building permits fell 2.5%... Housing starts… in the West jumped 26% and 18%... in the South. Starts in the Northeast dropped 30% and those in the Midwest fell 14%, [where] snowstorms… thwarted builder's plans…The numbers eased speculation that climbing defaults on subprime mortgages would put additional homes on the market… The Standard & Poor's Supercomposite Homebuilding Index… rose 0.2% to 593.8 in New York."

Mortgates, Subprimes and Real Estate Lending

  • Morgan Stanley Quarterly Net Soars 70% on Trading (MarketWatch, Mar. 21st): "Morgan Stanley also originates and packages mortgages into securities in its fixed-income capital markets sector. Last year it bought subprime lender Saxon Capital for $706 million, and also has been expanding its mortgage lending in London and throughout Europe. In December it bought City Mortgage in Russia for an undisclosed price… Morgan Stanley said its fees from servicing and securitization fell 7% from last year to $556 million, although they were up 5% from Q4'06 ending November… Morgan Stanley's fiscal Q1 net income surged 70% as the big investment bank benefited from trading revenue that included strong results from residential mortgages."
  • California, Fannie Mae Sever Ties With New Century (Seeking Alpha, Mar. 21st): "Fannie Mae, the largest U.S. mortgage loan provider, yesterday informed New Century Financial Corp. that it will no longer buy or sell NEWC mortgage loans. Also, California yesterday joined a dozen other states in ordering NEWC to stop making new mortgage originations... FNM's move may be a death blow-- NEWC cannot provide mortgages without the partially government-backed Fannie Mae's business. While Accredited Home Lenders' received a $200 million lifeline from the Farralon Capital Management hedge fund, NEWC looks increasingly likely to join the privately-held People's Choice Home Loan Co., the latest of more than 20 bankrupted subprime lenders."
  • Who's to Blame for Subprime Woes? Not the Fed (Chad Brand in Seeking Alpha, Mar. 20th): " I have a problem with… the rationale that without record low interest rates for so long, the housing market would not have overheated: The subprime meltdown was not caused by low interest rates. Rather, it was caused by loose lending standards… [giving] loans to people who couldn't afford them. If you don't require prospective home buyers to verify their annual incomes or net worth, and you give them mortgages without a down payment and low teaser rates, you need to be responsible for the consequences of such actions."
  • Homeowners, Lenders Skirt Default (AZ Central, Mar. 21st): "Homeowners are finding their mortgage companies eager to accept a sale price that falls short of a property's loan balance -- a so-called mortgage short sale… as the number of U.S. loans entering foreclosure reached an all-time high in Q4… That's spawning a cottage industry of real estate investors who profit as lenders try to avoid adding properties to their portfolios. "Banks don't want to be real estate managers," said Doug Duncan, chief economist of the Mortgage Banker's Association. "The fact that delinquencies are rising means we're going to see more pre- foreclosure sales."
  • MBA Urges Regulatory Restraint as Delinquency and Foreclosures Rise (Mortgage News Daily, Mar. 19th): "The overall delinquency rate for 1-4 unit properties, seasonally adjusted, was up 28 basis points from Q3 to 4.95%; 25 points higher than Q4'05. 13.33% of all subprime loans are now delinquent, an increase of 77 basis points since Q3 and 13.46% of FHA loans were also not performing, an increase of 66 basis points. Delinquent prime loans increased from 2.44% to 2.57% and VA loans went from a delinquency rate of 6.58% to 6.82%... Historical[ly], overall delinquency should not be particularly alarming. In the last five years the rate for all loans has moved in a narrow range from a low of 4.31% during Q1'05 to a high of 5.27% in mid-2002."

Global Impact of the Housing Market

  • Asian Stocks Rise for Fifth Day; Rinker Gains on U.S. Growth (Bloomberg, Mar. 21st): "Rinker Group Ltd., the largest supplier of cement blocks in the U.S., led gains among exporters after the U.S. reported a bigger-than- expected increase in housing starts, easing concern a property slump will derail expansion in the world's largest economy… BHP Billiton and Rio Tinto Group paced gains among mining stocks after copper prices extended a rally to a three-month high after the housing report damped concern U.S. demand will flag… Copper prices in New York… added 0.4%... Copper Development Association: Builders are the biggest users of copper, putting about 400 pounds in to the average U.S. home."
  • Commercial Real Estate News Digest (Mercury News, Mar. 20th): "AMB Property, an industrial real estate investment trust based in San Francisco, leased 1 million square feet in a Shanghai distribution center to DHL, nearly filling its second property in China. The five-year lease with DHL, a unit of Deutsche Post, Europe's largest postal service, is in AMB's Fengxian distribution center, south of downtown Shanghai. Earlier this month AMB hired Thomas Marquis to oversee its real estate activity in China. AMB has a portfolio of 1.4 million square feet in China, including an office in Beijing.

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

  • Fed Rate Cut Could Prop Up Housing Market (Dan Carty in Seeking Alpha, Mar. 21st): "Subprime issues are hitting the marketplace. The dollar bulls are [scared] as those who cannot afford the rising rates are defaulting on their properties, creating more bond issues… The dollar could find support if the Fed were to cut rates… A cut… would support those who are having payment issues and… perhaps support CPI/inflation levels 6 months out… Fed cuts… [would stabilize] the lower end of the housing market, give growth a push and help the banks [keep]… from raising [currently low] loan loss provisions which in turn cuts into earnings."
  • The Economic Hit From Housing (, Mar. 19th): "Don't expect a full-blown crisis for either housing or the economy. The bulk of the mortgage market is solvent, and the increase in foreclosures is nowhere near enough to overwhelm housing demand. In fact… demand for mortgages, adjusted for seasonal variations, has gained about 10% since hitting a post-boom floor last August. This is a big plus for the busy spring home-selling season. Also helping demand is ongoing growth in the number of jobs in the economy. History shows that the worst housing slumps were closely linked to downturns in employment… Very slim odds for a recession this year."

Hedging Against Housing: Homebuilders And Housing Stocks

  • Accredited Home Lenders: Survival in the Quicksand of Subprime (Ant & Sons in Seeking Alpha, Mar. 21st): "Accredited Home Lenders (LEND) $200 million loan (five year term and a 13% annual interest rate) from hedge fund Farallon Capital Management… [is to] enhance liquidity… But with the company's improving liquidity and financial position, Accredited seems to be removing some doubts about its staying power… Yesterday analyst Edwin Groshans at Fox-Pitt, Kelton said Accredited will likely seek "a partnership with a buyer that possesses an alternative funding source." The analyst estimates that the lender would fetch between $14 and $16 apiece in a potential takeout. If you are in subprime, Accredited is the place to be."
  • Mortgage ETF's Weak Volume Start (Greg Newton in Seeking Alpha, Mar. 21st): "The iShares Lehman MBS (mortgage-backed securities) Fixed-Rate Bond Fund (NYSEARCA:MBB), which did all of 200 shares when it was launched Friday, did nothing Monday. So good luck to the adventurous gorilla who bought 100 shares, at $100.98, Tuesday, in the ETF’s only trade. The good news is that whoever bought those first 100 shares Friday is now up $13.00, before transaction costs, and before trying to sell into this deep, liquid investor pool."
  • Hovnanian: Housing Slump Buy (Dan Carty in Seeking Alpha, Mar. 21st): "The homebuilders I watch are at their most oversold point since 1990, using two measures of the RSI along with the R% model… Stability is starting to form… Homebuilder P/E multiples are high… Only Hovnanian (NYSE:HOV), is showing positive momentum… The NAHB was weak. Housing sales numbers will be weak. Earnings “suck” according to some [homebuilder] CEOs and builders are panicking… HOV is not a cheap stock. It's expected to earn nothing in 2007 and $1.41 in 2008. I think they can beat both as the environment is just not as bad as these earnings expectations illustrate."
  • S&P 500 Furthest Below 50-DMA: D.R. Horton, Centex Best Money Flows (Ticker Sense in Seeking Alpha, Mar. 21st): "Eight S&P 500 stocks trading furthest below their 50-day moving averages. S&P InvestmentThe blue lines in the charts represent the stocks' 50-day moving average spread (% difference between price and 50-day). The brown line represents money flows. Of the eight stocks below, D.R. Horton (NYSE:DHI) and Centex Corporation (CTX) currently have the best money flows."
  • Timberwest: How to Profit From Inflation (Jack Brynaur in Seeking Alpha, Mar. 20th): "Timberwest (OTC:TWTUF) is an [inflation hedge] investment in property, commodities, and foreign currencies. Timberwest owns 334,000 hectares of high yield prime timberland… located on highly desirable Vancouver Island. Significant tracts of it are near areas of rapid urban and suburban expansion… [providing] potential for windfall real estate profits, in addition to Timberwest's solid production revenue. Timberwest is a prime supplier to timber-hungry China… and the softening of U.S./Canadian relations over the timber trade… could lead to even more profits for Timberwest… Timberwest is committed to keeping its dividend steady at CDN $1.08."

Commercial Real Estate and REITs

  • SL Green, Mack-Cali Trade Properties (Globe St., Mar. 21st): "NJ-based Mack-Cali Realty Corp. has purchased SL Green Realty Corp.’s condominium interest at 125 Broad St. for $273 million. At the same time, Mack-Cali sold 500 W. Putnam Ave. in Greenwich, CT to SL Green for $56 million. The building at 125 Broad St. is almost 40% condominium units, with the majority of the 40-story space serving as office. SL Green purchased the condominium interest, which consists of floors two through 16, in 2002 for $90m or $172 per Sq.ft. Mack-Cali takes the condo interest for $520 per Sq.ft The financial district building is fully occupied."
  • Zoran Corp. To Adorn Burlington Office Building (Globe St., Mar. 19th) Boston: "Capping a torrid leasing blitz at the Burlington Office Park’s flagship property, Zoran Corp. is relocating to One Wall St., a well-appointed, six-story building overlooking Route 128… A technology firm focused on the digital imaging sector, Zoran Corp. will relocate from abutting Woburn into 55,000-sf of One Wall St.’s 193,000-Sq.ft… Other deals… in the past month at One Wall St. include Openwave Systems leasing 37,000 Sq.ft and Nuance committing to the penthouse floor, which has 29,000 Sq.ft."
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