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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.

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

''We are looking at over 22,000 notices of foreclosure already filed. There are many more in the pipeline to follow. Are we simply going to stand by while these homeowners lose their homes?”- Secretary of State William Galvin yesterday, calling on the Massachusetts legislature to pass tougher state laws on predatory and subprime lending. (Cape Cod Times, Mar. 28th)

Real Estate Sales and House Prices

  • S&P: Home Prices Worst Since '94 (Times News, Mar. 28th): "Prices of single-family homes across the nation depreciated in January compared to a year ago… The S&P/Case-Shiller composite index showed a drop of 0.7% from 2006 in the price of a single-family home based on existing homes tracked over time in 10 metropolitan markets. In January 1994 the index dropped by 0.9% compared to January 1993… For its 20-city composite index, prices fell 0.2%... The downward trend is reflected in data across the nation while certain cities such as San Diego, Detroit, Boston, Phoenix and Tampa, Fla., have done worse. Seattle and Portland, Ore., meanwhile, show some resistance to the downturn."
  • Home Prices, Sales Gain Around Area (, Mar. 27th): "Houston's housing market has dodged the downturn some cities are experiencing, posting gains in price and sales activity in February. The median price of a single-family home reached $146,000 in February, a 2.5% increase over February 2006, the Houston Association of Realtors reported. A total of 4,868 single-family homes were sold in the month, a 3.8% jump over February 2006… The median price in the townhouse/condo market increased to $124,500, up 3.8% over February 2006… The first [drop in sales] since 2005, with 516 units being sold last month compared with 550 a year earlier."
  • Housing Drop May Deepen (Poughkeepsie Journal, Mar. 27th): "Dutchess County: In February-January, the average sales price for Dutchess County single-family homes fell by 11.2% versus Jan.-Feb. 2006. Volume of sales was flat while inventory… was running 20% above year-ago levels. Jerome Levy Forecasting Center report: "The biggest imbalance is in price, not inventories of unsold homes… Prices will fall 30-50%… [because] affordability is so low… Home prices [went] high [because] of speculator buying… Another key factor was the recent tightening of lender standards... That means marginal buyers will be pushed out of the market, and having fewer buyers tends to depress prices."

Mortgates and Real Estate Lending

  • FDIC Chief Backs Predatory Lending Crackdown on Mortgage Lenders (USA Today, Mar. 27th): "A top federal regulator Tuesday endorsed congressional efforts to pass legislation cracking down on predatory lending. "We believe that the time has come for national anti-predatory-lending standards applicable to all mortgage lenders," Federal Deposit Insurance Corp. Chairman Sheila Bair told a House Financial Services subcommittee… Bair and other regulators also said they would support efforts by the Federal Reserve to use its authority to write regulations cracking down on unfair and deceptive lending practices."
  • 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

  • Subprime Mortgage Collapse Eviscerates California Headquarters (Bloomberg, Mar. 28th): "In Irvine, where just nine months ago office vacancies approached a three-year low, home prices were at an all-time high, and unemployment was less than the national average, at just 3.6%, the unraveling subprime mortgage market is ruining the recent prosperity. Hometown lenders including New Century and Ameriquest Mortgage Co. already have fired more than 3,000 people, house and condominium prices are down 17% since June and office vacancy rates are poised to double this year, said John McDermott, regional manager for Orange County at commercial real estate broker Sperry Van Ness."
  • Irvine, California: No Longer the Silicon Valley of Subprime (Paul Kedrosky in Seeking Alpha, Mar. 28th): "Half of the 20 biggest U.S. subprime lenders are in California, including three in Irvine, and about 13% of the nation's subprime loans are in the state, according to the Mortgage Bankers Association and industry newsletter Inside Mortgage Finance. More than two dozen mortgage lenders have closed or sought buyers since the beginning of the year. Irvine-based People's Choice Home Loan filed for bankruptcy protection last week. H&R Block (NYSE:HRB) is trying to sell its Irvine-based Option One Mortgage Corp. unit. Accredited Home Lenders (LEND), based in San Diego, has offices in Irvine, and Ameriquest is based in Orange, just north of Irvine."
  • Pennsylvania Ranked 32nd in Foreclosures (Pittsburgh Business Times, Mar. 27th): "Pennsylvania ranked 32nd in a survey of foreclosure rates among the 50 states, according to the February U.S. Foreclosure Market Report, a monthly survey conducted by RealtyTrac. The commonwealth recorded 1,976 foreclosures last month, or one foreclosure for every 2,657 households… nearly 55% less than what Pennsylvania recorded in February 2006."
  • Report: Foreclosure Filings Hit Record High in Massachusetts for Second Consecutive Month (BusinessWire, Mar. 28th): " 2,227 foreclosures were initiated statewide during February 2007, 85% more than… in February 2006. Over the past 12 months, lenders initiated foreclosure proceedings against 21,644 homeowners, representing an 82% increase over the same period a year earlier… On average, there were 111 foreclosure filings every business day in February…. Foreclosure increases [due] to a “perfect storm” of factors… Rising interest rates… an increase in sub-prime… loans, the effect of adjustable rate mortgages, rising home heating costs, substantially increased gasoline prices, and the slumping Massachusetts housing market, leaves homeowners trapped in houses they cannot afford."
  • More Fall Victim to Subprime Mortgages (Bennington Banner, Mar. 28th) Vermont: "Mortgage foreclosures are on the rise nationally — and in Bennington as well — because of recent trends in the mortgage industry. "We're really not seeing a ton of variation from region to region, so a lot of the stories that we're hearing and a lot of the things that we're seeing is fairly consistent," said David Deziel, communications director for the Consumer Credit Counseling Service of Vermont and New Hampshire, based in Concord, N.H. "What's happening in Bennington is not dramatically different."
  • Behind Foreclosures, Ruined Credit and Hopes (NY Times, Mar. 28th): "Broad swaths of Newark are groaning under the weight of mortgage debt, much of it accumulated in the building boom of recent years that has transformed some parts of the city with gleaming redevelopment. But in many of these neighborhoods, a heavy mortgage debt has led thousands of residents — many of them first-time homebuyers — close to financial ruin, experts and local officials say. According to recent census figures, more than 40% of Newark homeowners spend more than half their income on housing, one of the highest percentages in the New York metropolitan region and among the highest in the country."
  • State Foreclosures Drop, Bucking U.S. Trend (, Mar. 28th): "Realty Trac: Nationally, foreclosures rose 42% last year, but fell 12% in Maryland. However… the Mortgage Bankers Association found that the percentage of mortgage loans entering foreclosure proceedings in Maryland increased during the past year, though more slowly than nationally... A record 0.54% of American homeowners with a mortgage faced foreclosure proceedings during Q4'06. In Maryland, however, the rate for the quarter was only 0.31%, up from 0.21 in Q1'06… Maryland Association of Realtors: The median sales price of a home in Maryland rose 5% in January from a year ago to $303,842."
  • Set Up For a Fall (New York Daily News, Mar. 28th): "A soon-to-be released study by the nonprofit Neighborhood Economic Development Advocacy Project: More than 9,000 New York City home owners faced foreclosure last year – [a] 50% increase over 2005 … Mortgage lenders have filed 3,116 new motions to foreclose against delinquent homeowners since Jan. 1… NY is going… to surpass 15,000 filings this year, more than double 2005... Hardest [hit were the] minority neighborhoods of South Jamaica and Cambria Heights in Queens, Bedford-Stuyvesant and East New York in Brooklyn and Williamsbridge in the north Bronx… NYC has [not] been spared the impact of the [subprime] crisis because of our strong housing market."
  • Fulton Financial: Subprime Problems Trickling Up To Midprime (Herb Greenberg in Seeking Alpha, Mar. 27th): "Fulton Financial's Resource Bank subsidiary is being forced to buy back first and second loans that were sold into the secondary market because the borrowers were defaulting early in the payment cycle. These early payment defaults are a common snafu in the subprime slime, but… For Fulton these 80/20 loans, otherwise known as mortgages with zero down payment, appear to be Alt-A, with credit scores above 620… While the total number of loans isn't significant, with Fulton taking a pre-tax loss of $5.5 million against its total assets of $15 billion, the trickle-up effect seems to be underway."
  • The Private Equity Party Might Be Over (Richard Shaw in Seeking Alpha, Mar. 26th): "Private equity depends on low cost financing. Low cost debt and equity has abounded in recent years, but may not be as available going forward… The current sub-prime mortgage bust could eventually impact credit availability and borrowing rate generally… Contrarian approaches that [go] moderately against popular opinion creates value over time by scaling out of appreciated assets and committing new money to assets that are not in the limelight. Private equity has appreciated and is in the limelight. We are scaling out and deferring new commitments. We suggest caution toward public private equity vehicles at this time in the market."

Global Alternatives To The Housing Slump

  • UK House Prices Slow in March as Rate Hikes Bite (, Mar. 28th): "British house price inflation slowed this month, suggesting three interest rate rises since August are taking their toll on the property market, mortgage lender Nationwide said on Wednesday. Nationwide said house prices rose 0.4% in March compared with 0.6% in February. That took the annual rate of house price inflation down to 9.3% in March from 10.2%. The average house price stood at 177,083 pounds. BoE Governor Mervyn King said on Tuesday there were signs the housing market was starting to slow… The British Bankers Association showed approvals for home loans… were 5% lower in February than a year ago."
  • Australian Property Funds Switched to Europe From U.S. in 2006 (Bloomberg, Mar. 27th): "Realtors Jones Lang LaSalle: Australian real estate funds more than tripled their investment in Europe last year as they switched the focus of their international investments away from the U.S.…The funds spent $6.3 billion buying commercial property in Europe in 2006, lead by Germany and the U.K., as spending in the U.S. tumbled by 67% to $2.7b… Australian funds spent $3.5b in Germany last year, almost five times the $700 million they spent in 2005. Investment in the U.K. rose a similar amount to $1.5b from $300m… Investment in the Asia-Pacific region rose 10% to $3b."

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

  • Housing Problems Persist, Raising Odds of a Fed Rate Cut By Year-End (Vahan Janjigian in Seeking Alpha, Mar. 27th): "Only an estimated 848,000 new homes were sold in February. That's down 3.9% from the revised January estimate, which is itself down 5.9% from the initial January estimate... While home builders may be reducing inventories, they are also selling fewer homes, which means supply is actually rising… February's median price of $250,000 was up 2.8% from January. But… home builders are making all kinds of concessions and [upgrades] to move houses…I think the Fed will worry more about slowing growth than rising inflation… raising the odds of a Fed rate cut by year-end."
  • Housing and Subprime: No Documents? No Problem - Until Now (Todd Sullivan in Seeking Alpha, Mar. 27th): "[What's happening now] is a slow decent to normalcy… Not a crash, not a recession, not a depression, just normal housing conditions with realistic lending guidelines… The overall economy is performing so well, it will resist [recession with] record profits, record corporate cash levels, full employment and moderate sustainable growth. This may end up actually benefiting stocks as all the money that chased real estate the past four to five years will now look to stocks for superior returns, since it will not be in real estate for a while. There are trillions out there looking for a home to grow in."

Homebuilders And Housing Stocks

  • David Fry's Market Outlook for Wednesday (David Fry in Seeking Alpha, Mar. 28th): "Homebuilders having some problems? And here I thought they were "value plays" according to some prominent Wall Street analysts… No one seemed to take seriously any of the warnings, not to mention insider selling, issued by CEOs of all these firms… Perhaps [it] just reflects the high levels of cash rationalizing investments… I see that bond market Big Daddy Bill Gross of PIMCO stated that the Fed will have to either cut interest rates low enough so that mortgages would be at 5% or… home prices will have to fall 20%. He says the Fed's hands are tied."
  • Beazer Homes Shares Plunge 17 Percent (, Mar. 27th): "Beazer Homes USA… is the subject of an investigation by the FBI and the U.S. attorney's office in Charlotte, N.C., along with the Internal Revenue Service and the U.S. Department of Housing and Urban Development, FBI agent Ken Lucas said Tuesday. Beazer shares dropped $5.38 to $26.03 in electronic trading after closing down $0.91, or 2.8%, at $31.41. Lucas, a spokesman for the FBI's Charlotte field office, said the inquiry began last week and involves "fraud in general" and more specifically is related to corporate, mortgage and investment issues."
  • Lennar's Profit Takes a 73% Hit; Shares Lower (Seeking Alpha, Mar. 27th): "Homebuilder Lennar's EPS came in at just $0.43 ($68.6 million) versus a year-ago EPS figure of $1.58 ($258.1 million).CEO Stuart Miller said "We do not expect to achieve our previously stated 2007 profit goal," adding "We are not comfortable providing a new earnings goal at this time." Lennar said on Jan. 17 that FY2007 earnings would at least match 2006's profit of $593.9m, or $3.69 a share. Overall revenue dropped to $2.79 billion from $3.24b; revenue from home sales fell 10% to $2.62b. Thomson Financial analysts were expecting EPS of $0.43 on revenue of just $2.49b."
  • Is It Time to Buy the Homebuilders? 13 Stocks to Consider (Toro in Seeking Alpha, Mar. 27th): "If you assume that buying stocks at 1x book value is a good strategy. The homebuilders group is at 1.24x. Homebuilders Current ValuationsHomebuilders Loss ChartHomebuilders Loss ChartIf you exclude NVR, the average homebuilder PB is 1.06x… But in1999 or 2000, the stocks bottomed at the following valuations… So, in fact, if you bought the stocks at 1x book value before the bottom in 1999/2000, you lost 25% of your investment. And remember, the housing market was healthy and about to get a whole lot healthier. If the stocks were to revisit their lows of the turn of the decade, how much would you lose if you bought them now?"
  • Housing, Oil, Soft Dollar Boost Metals ETFs (Tom Lydon in Seeking Alpha, Mar. 27th): "When oil prices are higher, gold looks more attractive as a hedge against inflation. Gold futures rose on Monday as tension with Iran over the capture of British soldiers pushed oil prices higher. MarketWatch reported the unexpected decline in new U.S. home sales along with the rise in oil prices and a softer dollar contributed to the precious metals advance."

Commercial Real Estate and REITs

  • Filing Shows Blackstone Real Estate Returns (Mercury News, Mar. 27th): "Blackstone Group, the leveraged buyout firm that spent about $160 billion on acquisitions during the past two decades, earns higher returns from investing in real estate than from its takeover funds… Real estate has been Blackstone's best-performing investment since the New York company started buying property 16 years ago, with net returns averaging 29% a year, according to documents for its IPO… Blackstone managed $17.7b of real estate funds as of March 1, out of a total of $78.7b. Its real estate funds had $902.7 million of pretax income last year, or 39% of the firm's total $2.3b."
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