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.

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

"The consumer has to feel very good about her prospects for the future, about employment, about income, about interest rates ... because we definitely have a product that is postpone-able." - Kurt Darrow, CEO of La-Z-Boy (LZB) on the slowdown in the furniture industry. (Reuters, Mar. 26th)

Real Estate Sales and House Prices

• New Home Sales Drop for Second Month Straight (Seeking Alpha, Mar. 27th): "Commerce Dept.: Sales of new homes declined for the second consecutive month in February by 3.9% to 848,000 units annualized, their lowest pace since June 2000, and from 882,000 in January… Analysts had been expecting a rise to just under one million. The inventory clearance rate of 8.1 months -- its highest in sixteen years -- is probably even worse than it appears, since it does not include homes put on the market after buyer cancellations… U.S. government bond prices rose and the dollar fell on speculation the report would prompt the Fed to cut interest rates, and shares of streetTRACKS SPDR Homebuilders ETF (XHB) fell 1.53% to $34.17 in yesterday's trading."

• Home Sales Plunge is a Puzzle (Chicago Herald Tribune, Mar. 26th): "Chicago-area home sales in Jan-Feb. declined 12.1% from 2006, confounding analysts who were looking for the first small signs of a spring bounce but instead saw a market continuing to struggle… Illinois Association of Realtors: The median price for both single-family homes and condominiums in the Chicago area in February was $240,000, up just slightly less than 1% from one year ago. David Stiff, of Fiserv CSW, a housing-market analyst: "I think of Illinois as a bellwether for other markets that didn't get caught up in the bubble. We have been forecasting about 4% price appreciation, y/o/y, in the Chicago area."

• O.C. House Prices Down Again (O.C. Register, Mar. 25th): "California Association of Realtors: Median existing single-family home in Orange County was down last month, making February the sixth of the past seven months to see y/o/y price declines. The median price was $692,820… up slightly from January's median, but down 3.9% from February 2006. Existing single-family home sales, have been down every month since August except for a 0.5% rise in November… Single family home sales were up in February, 4.6% from February 2006 and 10% from January. Statewide, and throughout most of Southern California, single-family home prices were up from year-ago levels."

• "For Sale” Signs Reach New Highs in February (CBS4, Mar. 24th) Miami: "Florida Association of Realtors: "At the current sales pace, it would take nearly three years to sell all the condominiums on the market. For single-family houses, it would take almost two years. February marked Miami-Dade's lowest number of sales in the past year. In Broward, sales were near the year's lows, but up compared with January. The number of unsold homes in Miami-Dade and Broward counties is up to 69,734. A year ago, it was 37,495. But prices were mixed, depending on the market sector: Broward condos were down 10% y/o/y, for example, while Miami-Dade house prices rose 3% y/o/y."

• Area Home Sales, Prices Tumble; is a Rebound Near? (TC Palm, Mar. 24th): "Home sales in the Fort Pierce-Port St. Lucie market were off 37% in February from the same month in 2006, while median sales price dropped 9%, according to numbers released Friday by the Florida Association of Realtors… Yet Scott Wingfield, president-elect of the Realtors Association of St. Lucie, said the market could be stabilizing… Wingfield said he's coming off some of his office's strongest weeks of showings since mid-2006… Martin County… existing single-family home sales and median home prices both dropped about 19% last month compared with February 2006."

Real Estate Investing and Sentiment

• Realtor Reality Check (Star Ledger, Mar. 27th): "Joanna Parker-Lentz, a broker at Re/Max Village Square in Short Hills, persuaded her gynecologist to buy a new house when she was in the throes of labor… It's that kind of obsession with selling real estate that appealed to the folks at Home and Garden Television when they were looking to cast agents to star in a reality TV show called "Bought and Sold," which will be distributed to more than 85 million households. The series, which airs at 10 p.m. April 29, gives viewers a "fly- on-the-wall" look at real estate agents as they help home buyers and sellers navigate the biggest financial transaction of their lives."

• Bloggers: Alternative Voices on Housing Risks (LA Times, Mar. 24th): "In years past, real estate agents were often the only sources people could turn to for information on the state of the market. But increasingly, bloggers are filling that role, touting themselves as independent sources in a field crowded with vested interests. Some of these scribes have earned the respect of mainstream industry observers who credit them with being ahead of the curve. "Some of the best reporting in the past year has been from the blogs," said Bradley Inman of Inman News, a real estate trade publication. "The bloggers were unabashed critics. They were unconstrained about what they said."

Mortgates and Real Estate Lending

• Reports: Subprime Loans are Taking Homeowners by Surprise (Daily Breeze, Mar. 27th): "Bankrate.com poll: 34% of home- owners didn't know what kind of mortgage they had… The poll, which surveyed homeowners and renters, also found that 36% of owners who now have an adjustable mortgage plan to refinance to a fixed-rate loan; 57% of owners have a fixed-rate mortgage; 40% of renters consider affordability the biggest obstacle in buying a house; Just less than 12% of renters are concerned their credit rating is not high enough to purchase a home; 38% of renters would avoid taking out an ARM when they are ready to buy a home."

• Here Come the Mortgage Regulators (Motley Fool, Mar. 26th): "As with the Sarbanes-Oxley hoops through which corporate America must jump routinely, along with the counterproductive rules now governing much of securities analysis -- the regulators will almost certainly overcorrect as they seek to deal with the lenders' real or perceived transgressions… The only apparent winners in all this, at least for the time being, have been those seeking prime mortgages. With funds exiting the subprime and intermediate, or Alt-A, credit levels, a greater percentage of available funds have been targeted to prime borrowers, making for some attractive packages for that most creditworthy tier of borrowers."

Subprime Fallout and Foreclosures

• New Century Financial on Brink of Bankruptcy (Seeking Alpha, Mar. 27th): "Barclays and Morgan Stanley are repossessing New Century loans. NEWC will hand over the loans it made with Barclays credit lines; in exchange, it will be forgiven the obligation to buy back $900 million of those loans. Morgan Stanley will auction off $2.48 billion of New Century subprime mortgages collateralized against NEWC's $2.5 billion credit line from the investment bank... NEWC has received default notices from Barclays, Bank of America, Citigroup, Credit Suisse, Goldman Sachs and Morgan Stanley, among others. If all its lenders demand mortgage repurchases simultaneously, New Century could owe $8.4 billion, forcing its liquidation."

• Report Shows Ohio Foreclosures Rising (Western Star, Mar. 27th): "Foreclosure filings jumped by almost a quarter in Ohio last year, the largest increase in recent history, a new report has found. The number of filings in 2006 — 79,000 — represented an almost five-fold increase over 1995, according to the report by the non-profit Policy Matters Ohio… Ohio's weak economy has played a part in the foreclosure surge… but loans made to borrowers who can't afford them was a bigger factor."

• Florida leads U.S. in Foreclosures (Palm Beach Post, Mar. 27th): "RealtyTrac: In Florida, 19,144 homes entered foreclosure in February, the most of any state… Florida topped California's 16,273 foreclosures, and Texas' 12,386. Florida accounted for nearly 15% of the nation's 130,786 foreclosures in February… Florida's foreclosure rate of one filing for every 278 households trailed only Colorado's and Nevada's. In Palm Beach County, 1,317 homes went into foreclosure, nearly double January's 680 foreclosures and well above the 765 foreclosures in February 2006.The 228 foreclosures in St. Lucie County were down slightly from January but triple the February 2006 number. Martin County had 62 foreclosures, up slightly from January and from February 2006."

• The Forecast for Foreclosures (BusinessWeek, Mar. 26th): "RealtyTrac: A total of 130,786 foreclosure filings nationwide in February, down 4% from January's level. February's decline, however, may prove fleeting. A 4% decrease, for all intents and purposes, is flat… Foreclosures were still up 12% y/o/y, and February's total marked the first time there have ever been two back-to-back months with U.S. foreclosure numbers over 130,000… January's total foreclosure figure—136,113—was the highest monthly number ever recorded by RealtyTrac. February's drop in filings could have something to do with the 3.9% rise in existing-home sales for the month reported by the National Association of Realtors."

• 2006 Subprime Loan Performance Will be Worst in a Decade (Inman News, Mar. 26th): "Analysts at Standard & Poor's RatingsDirect say that even if home prices stabilize and the U.S. economy remains strong, the performance of subprime loans originated and resold on the secondary market in 2006 will be the worst in 10 years. Losses on the 2006 "vintage" of subprime loans securitized on Wall Street are expected to be between 5.25% and 7.75%, but could be higher if home prices fall dramatically or the country experiences a recession, Standard & Poor's analysts Michael Stock and Scott Mason said in a March 22 report."

• Foreclosures Rising in County (Hillsdale Net, Mar. 26th) Michigan: "Hillsdale County: At last count, at least six homes a week go to the sheriff’s sale at the courthouse at 10 a.m. each Friday morning. Michigan is being hit hard overall, but the foreclosure rate is rising fastest in five other states: California, Texas, Colorado, Florida and Nevada."

• Mortgage Foreclosures Drop in February but Remain Higher than 2006 (Kentucky.com, Mar. 26th): "Mortgage foreclosures dropped sharply in Kentucky last month, but they remained well above 2006 levels… RealtyTrac found that in February, one household in every 2,788 in Kentucky was in some stage of foreclosure, compared with the national average of one household in every 884… In Kentucky, foreclosures dropped 33.8% from January to February and were 34.8% higher than in February 2006."Based on our numbers for the first two months of 2007, foreclosure activity is running at a rate that would project to a 33% increase over 2006."

• Foreclosures in Tennessee Down in February, Still Ranks High Nationally (Nashville Business Journal, Mar. 26th): "Foreclosures in Tennessee dropped more than 17% in February compared to last year, but the state still ranks in the top 10 when it comes to foreclosure rates, according to a report by RealtyTrac. Tennessee 3,836 homes enter some stage of the foreclosure process, down less than a percentage point from January. The state rank's sixth in the nation in foreclosure rates with one foreclosure for every 639 households during the month."

• Georgia Fourth in February Foreclosures (Atlanta Business Chronicle, Mar. 26th): "Realty Trac: Georgia ranked No. 4 among the states, with one foreclosure filing for every 424 households in February 2007. The state had 7,294 households in some state of foreclosure last month, down 22.6% from February 2006 and down 12.4% from January 2007… Georgia had the second most foreclosures in 2006, and had been ranked No. 3 for several consecutive months."

• Lenders Tightening Rules for 'Subprime' Borrowers (Kentucky.com, Mar. 24th): "Eddie Carmona of Homewood Mortgage in Texas: Down payment requirements [for subprime loans] are the biggest change… [And] previously, borrowers with a FICO credit score as low as 570 (out of 850) could qualify for a single loan financing 100% of their home purchase... Now… it's jumped up to a 600 FICO score for an 80/20 loan, in which a second loan has to be taken out to finance the remaining 20% of the home value… Subprime mortgage rates have risen about 1% since September… [And] borrowers [must] have at least three months of reserves in their account."

Global Alternatives To The Housing Slump

• Dubai Firm Eyes European, U.S. Real Estate Foray (Reuters, Mar. 27th): "Dubai-based Damac Properties said on Monday it was considering expansion into Europe and the United States as part of plans to develop a global luxury property brand… Damac, which has 60 projects in the Middle East worth about 100 billion dirhams ($27.2 billion), wants to acquire existing real estate firms and develop land it buys on the east coast of the United States and in Europe, Chairman Hussain Sajwani said."We're looking very aggressively at these markets," he added.

• AMB Property Corporation(R) Enters South Korea With Development at Seoul's Incheon International Airport (Earthtimes, Mar. 27th): "AMB Property Corporation(R) , a leading global developer and owner of industrial real estate, today announced it has entered South Korea with a 363,000 square foot development project in the Incheon Free Economic Zone, immediately adjacent to the cargo terminal area of Incheon International Airport."

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

• S&P: Subprime Meltdown Could Affect Car Loans (Seeking Alpha, Mar. 27th): "The surge in delinquencies and foreclosures in the subprime mortgage market may be seeping into low-end car loans, Standard & Poor's reports… A slight uptick in delinquencies among subprime car loans suggests that subprime mortgage holders, unable to make their house payments as their adjustable-rate mortgages are reset upward, are also having trouble making their car payments. Still, the impact of the subprime mortgage crisis on car loans will likely be contained, since most subprime auto borrowers are renters, not homeowners. High-quality car loans, like their housing equivalents, continue to do well."

• U.K. Stocks Including Wolseley, Barclays Decline; Next Climbs (Bloomberg, Mar. 27th): "Morgan Stanley cut its price estimate on the world's biggest distributor of plumbing equipment… The UK's Wolseley Plc slid 3.5% to 1205 pence. Lennar said earnings plummeted in the first-quarter [from] the worst U.S. housing slump in more than a decade... Wolseley makes more than half of its sales in North America. Separately, Morgan Stanley cut its price estimate on Wolseley's stock by 5% to 1330 pence a share."

• Foreclosure Wave Bears Down on Immigrants (AZ Central, Mar. 26th): "Immigrants are emerging as among the first victims of a growing wave of home foreclosures… Latino affairs for the Center for Responsible Lending: Nationally, 375,000 high-interest-rate loans were made to Hispanics in 2005, and nearly 73,000 of them are likely to go into foreclosure. About 1.1 million homes in the U.S. are expected to go into foreclosure in the next six years, and many native-born Americans are likely to be stuck with burdensome loans. But immigrants are getting hit first in part because their incomes tend to be lower and many have lost construction jobs."

• Ethan Allen Sees Profit Below Analysts' Views (Reuters, Mar. 26th) - Furniture maker and retailer Ethan Allen Interiors (ETH) forecast [lower] quarterly earnings on Monday, citing a challenging economic environment for home furnishings retail. ETH expects earnings of $0.53-$056/share for Q1, compared with $0.59 cents in the prior-year quarter. Analysts, on average, expect $0.59/share… Furniture makers have pared profit forecasts, cut jobs and announced plant closures as slowing home sales and higher y/o/y borrowing costs led consumers to pull back from big-ticket purchases over the past year. Earlier this month, Furniture Brands International (FBN) cut its outlook for Q1, saying sales could fall nearly 15%... La-Z-Boy said this month it would cut 500 jobs… In December, Stanley Furniture Co. (STLY) said it would cut 200 of 450 jobs at its plant in North Carolina."

Homebuilders And Housing Stocks

• Lennar's Profit Falls 73% as U.S. Home Demand Wanes (Bloomberg, Mar. 27th): "Lennar Corp., the largest U.S. homebuilder by revenue, said earnings plummeted 73% in the fiscal Q1 as demand waned. Net income for the three months ended Feb. 28 declined to $68.6 million, or $0.43/share, from $258.1 million, or $1.58, a year earlier… Lennar said it will likely miss its 2007 profit forecast as the normally stronger spring selling season had not materialized. CEO Stuart Miller: "Given the state of the market, we do not expect to achieve our previously stated 2007 profit goal. We are not comfortable providing a new earnings goal at this time.''

• Wimpey and Woodrow Agree to Merge (BBC News, Mar. 26th): "Construction companies George Wimpey and Taylor Woodrow [will] merge… creating the UK's biggest homebuilder, worth about £5bn… The new company's [US subsidiary] would be a bigger player in a market where at present the two firms were successful, but smaller, than many of their rivals. The housing market in the US is experiencing a slowdown…Many predict a UK slowdown from rising interest rates… However, Taylor Woodrow said that the underlying market in both the UK and US was stable and there was a steady demand for new houses."

Commercial Real Estate and REITs

• Monmouth Real Estate, Monmouth Capital to Combine (Reuters, Mar. 26th): "Monmouth Real Estate Investment Corp. (MNRTA) said on Monday it would acquire Monmouth Capital Corp. (MONM) in a transaction valued at $90.2 million. Monmouth Capital will merge with a subsidiary of Monmouth Real Estate. Each share of Monmouth Capital's common stock will receive 0.655 shares of Monmouth REIT's common stock. Following the closing of the deal, Monmouth REIT said its stockholders will own about 84.5% of the company, with Monmouth Capital's stockholders owning the rest."

• A Theater Package for Extell on West 45th (Curbed, Mar. 26th): "Gary Barnett… [and] his Extell gang have bought up scads of those precious Theater District transferable air rights for what is reported to be a new 50-story Condo-slash-Hotel to go up right off Times Square at 131 - 139 West 45th Street. It seems three old Broadway theaters all the way across the Square have found an angel in Mr. B."

• Edge Selling Harmon Corridor Land for $600M+ (Globe St., Mar. 26th): "Edge Group is [close to] an agreement to sell the 50 acres it owns immediately west of the Hard Rock Hotel & Casino to a NY real estate developer… The sale price will be in excess of $600 million or $16 million per acre… double last year’s value and a record for near-Strip land… The assemblage includes the 25-acre Ramblas property and the adjoining 25 acres on which it has been preparing to develop W Las Vegas in partnership with Starwood Hotels & Resorts Worldwide. The two properties are slated for a combined 6,600 hotel and condominium units plus a casino, restaurants and shopping."

• $20 Million Development in the Works (Wichita Eagle, Mar. 27th) Kansas: "Plans are in place for a $20 million development on the northwest corner of Tyler and Kellogg. Holland Place, a 200,000 Sq.ft retail and restaurant project, is being developed by George Holland of Holland Paving and marketed by Saville, president of Landmark Commercial Real Estate… Saville… is pursuing a major grocery chain to build a 100,000-square-foot store [to anchor the development]. Surveys estimate almost 50,000 people with a median income of about $60,000 will live within three miles of the development by 2008."

• Lipstick Building on the Block (The Real Deal, Mar. 26th): "Tishman Speyer is selling the Lipstick Building at 885 Third Avenue. The building, designed by Philip Johnson and John Burgee, is expected to fetch around $600 million. Tishman purchased the commercial property in 2004 for $235 million."

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