Housing Bubble and Real Estate Market Tracker

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 |  Includes: BZH, C, CAT, CFC, FMCC, FRN, HD, HRB, IDMCQ, LZB, MTG, RSTO, THMR, WFC, WMIH
by: Judy Weil

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 have 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"

"If the pizza man delivers a pizza to you and you have $300,000 worth of equity in your home, but no cash, he is not going to give you your pizza. He wants cash, not equity. The same problem now faces many United States banks. – Brant McLaughlin, commenting on a series of essays on the current financial crisis, recently published by the liberal think tank Cato Institute.(The People's Media Company, Aug. 14th)

Real Estate Sales and House Prices

  • Rhode Island Home Sales and Prices Down After Second Quarter, June Sees 11 Percent Drop in Sales, According to The Warren Group (Business Wire, Aug. 14th): "Sales of single-family homes fell 6.7% during H1'07 from 4,734 in 2006 to 4,418 this year. In June, single-family home sales fell by 11.4% from 1,086 to 962. The median price of single-family homes in Rhode Island fell 3.4% after H1'07 from $269,000 last year to $260,000 this year. In June, the median price fell 5.2% from $279,500 to $265,000. Condominium sales fell slightly during the first half of the year, but historic data shows that condo sales have stayed relatively steady over the past 18 months, although the median price has fluctuated from month to month."
  • Home Sales Slow In Chicago Area, But Prices Up Slightly (Chicago Tribune, Aug. 14th): "Illinois Realtors Association: While home sales in Chicago dropped 19% from Q2'06, prices increased a modest 2.6% to a median average of $256,400. In the nine-county Chicago region, 29,061 single-family homes and condominiums were sold in Q2. Last year, 35,889 homes changes hands in Q2'06... Prices increased 2.6% in the period to a median of $256,400… Statewide, the median home sale price was $207,500, up 0.2% from $207,000 a year earlier… Total home sales, which include single-family homes and condominiums, totaled 43,080, down 16.1% from 51,332 home sales in Q2'06."
  • Tucson-Area Home Sales And Prices Continue To Slip (AZ Starnet, Aug. 14th): "Tucson Association of Realtors MLS: The number of homes sold in July fell 10.51 compared to the same month a year ago… The median price fell 2.78% to $218,750. The average price also dipped 1.73% to $268,983… In June, the average price rose by more than 9% while the median rose by 1.78% compared to the same month last year. The number of homes on the market also showed a slight decrease compared to the same month a year ago. Active listings were down to 8,692 from 8,955 in July 2006."
  • The Second Housing Bust (NJ.com, Aug. 13th): "Between 1998-2006… New Jersey's home prices jumped by 129.1%. While this rate of increase was somewhat less than that of 1980-1988 (141.2%), the 1998-2006 house price run took place on a much higher base, leading to much higher absolute price gains… In retrospect, these rates of increase were achieved only because of excess demand stimulated by aggressive and risky subprime lending practices… The future, if predicted by New Jersey's experience in [1980-88], is that home prices will slip in the region through 2009, and then begin to slowly recover. It could then take until 2016 to match the nominal (i.e., not inflation-adjusted) home price peak of 2006!"

Affordability Problems Persist

  • 25 Percent Affordable Sought (JH News & Guide, Aug. 15th) Jackson Hole, Wyoming: "Though the Housing Authority has created more than 500 units since inception, demand for affordable homes has continued to increase as home prices soar. A recent report showed the median price of a single-family home was nearing $1.2 million. Now, the agency has 819 units in its program: 361 ownership units and 458 rental and seasonal units. About 75 percent of those homes have been built since 2000, for a production of 125 units a year."

Real Estate Investing and Sentiment

  • The Real Real-Estate Market (Letters to the Editor, Wall St. Journal, Aug. 14th): "Richard A. Smith Vice Chairman and President, Realogy Corp.: Christie's Great Estates… manages a loose affiliation of brokers and isn't a franchisor or an owner of real-estate brokerage offices. In contrast, Sotheby's International Realty is both an owner/operator and a franchisor of luxury real-estate brokerages with affiliates in 26 countries. By design, our network is based on long-term business relationships, typically 10 or more years in duration. From 2004 to 2006, Sotheby's International Realty experienced 590% growth in transaction sides, while sales volume rose to $26 billion from $5 billion."

Mortgates and Real Estate Lending

  • Fewer Loans, More Hiring For Countrywide (NJ.com, Aug. 15th): "Countrywide Financial Services' (CFC)… said expected foreclosures as a percentage of unpaid principal rose to 1.04%, from 0.46% a year earlier and 0.96% in June. Delinquencies rose to 5.10%, from 4.11% last July and June's 4.98%. July's totals are the highest… since at least March 2002. Overall, July mortgage loan volume was $39.06 billion, down from June's $45.26b, but up 6% from July 2006. Nonprime loans, including subprime, totaled $1.8b, down 3% from June and 46% from a year earlier… Countrywide said it added 1,159 jobs in July, ending with 61,586 workers… as many smaller rivals curtailed lending or folded. It employed 54,655 people at year's end."
  • Loan Standards Tighten (Christian Science Monitor, Aug. 15th): "Banks are tightening standards. On Monday, the Federal Reserve reported that the majority of the 49 banks it periodically surveys had tightened standards on subprime mortgages... Nearly [50%] also said they had toughened standards for nontraditional mortgages – for individuals [without] complete documentation of their income or who want interest-only mortgages. [Some] 10% of the banks even said they had made lending more difficult for people with good credit standing. Mortgage broker Bob Moulton, president of Americana Mortgage Group: To qualify for nonjumbo mortgages, the minimum credit score has jumped from 620 to 680 (out of a top score of 900)."
  • MGIC Mortgage Insurance Now Available Through Loan Producer (CNN Money, Aug. 14th): "Mortgage Guaranty Insurance Corporation (NYSE:MTG) now offers a fully integrated mortgage insurance [MI] application interface to mortgage lenders that are using Loan Producer from Financial Industry Computer Systems, Inc. The new interface makes it possible to send MI applications directly from the Loan Producer system to MGIC. MGIC will automatically process the request and update the Loan Producer system as the status of the mortgage-insurance request changes… Loan Producer is designed to save time and money in loan origination, processing, underwriting, closing and secondary marketing."
  • Regulators Propose Mortgage Forms (Forbes, Aug. 14th): "Federal bank regulators on Tuesday published a new disclosure forms designed to give borrowers a better understanding of mortgages that can adjust to dramatically higher monthly payments… Lenders are not required to use the new forms and are free to alter or design them as they see fit. However, banking institutions generally follow the regulators guidelines, which only apply to federally supervised institutions, not state-regulated ones. If they do not use the baking regulators' forms, lenders would have to ensure that their own disclosures and marketing materials provide "clear and balanced" information."

Subprime Fallout

  • Credit Crisis Hits Small Lenders (Wall St. Journal, Aug. 15th): "The mortgage credit crunch is tightening its grip on thousands of small to midsize lenders and brokers, allowing giant lenders to grab a bigger share of the market… Countrywide Financial (CFC), the nation's largest home lender in terms of loan volume, and IndyMac Bancorp (IMB), another big lender, both said they are recruiting loan officers let go by American Home Mortgage… GMAC's Residential Funding Co. said that as of today it won't provide so-called warehouse funding for subprime loans and mortgages for borrowers who don't verify their income or assets. It also ruled out mortgages for investment properties and home-equity loans to borrowers with credit scores lower than 720… Washington Mutual (NYSE:WM) [said] it was reducing the [broker fee] yield-spread premium -- to 2% of the loan balance from 2.5% on certain mortgages. Wells Fargo & Co. (NYSE:WFC) recently stopped accepting subprime loans from brokers."
  • The Mortgage Crunch Bites Even The Rich (San Francisco Chronicle, Aug. 15th): "Starting last week, Wall Street started to spurn jumbo mortgages -- those above $417,000 -- even for borrowers with sterling financial profiles. Those loans have become scarcer, harder to qualify for and more expensive… The one bright spot for Bay Area real estate in the past year has been upper-end sales… Sales of homes [for] less than $600,000 -- eroded significantly because many entry-level home buyers were knocked out of the market by tighter lending standards several months ago."
  • How Rating Firms' Calls Fueled Subprime Mess (Wall St. Journal, Aug. 15th): "Rating's companies [collaboration] with the underwriters that were putting those securities together... helped spur the boom. Underwriters… work with ratings companies while designing a mortgage bond or other security, making sure it gets high-enough ratings to be marketable. The result of the rating firms' collaboration and generally benign ratings of securities based on subprime mortgages was that more got marketed. And that meant additional leeway for lenient lenders making these loans to offer more of them… Edward Grebeck, CEO of debt-strategy firm Tempus Advisors: "A lot of institutional investors bought these securities substantially based on [credit] ratings, in part because this market has become so complex."
  • Thank Goodness All the Issues Are Now Behind Us – Not (Seeking Alpha, Aug. 14th): "Unfortunately most media accounts focus on the wrong thing… The default rate will remain low, this is good for consumers. But the market risk is to the pools of capital that invest in the mortgages. There is less investment demand-- another round of potential liquidations with fewer buyers is coming soon and a widening of spreads which all hurt the holders of this paper… Whatever this will turn out to be, I doubt it is unprecedented in terms of fundamental impact and market impact. It take some amount of time, the market will endure some magnitude and then move on."
  • Cerberus' Subprime Woes (Reuters, Aug. 14th): "Add Cerberus Capital Management to the list of firms hit by the subrime mortgage meltdown. Its portfolio company Aegis Mortgage Corp. filed for bankruptcy on Monday. And Aegis isn’t Cerberus’ only bet on the mortgage industry… H&R Block (NYSE:HRB) said in April it will sell its subprime lender Option One Mortgage Corp. to Cerberus for what analysts estimated would be around $700m-$800 million. On Aug. 9, H&R Block said it might not complete the deal until the end of December [and] that its subprime mortgage unit planned to cut more jobs this year than the 615 announced in May."
  • Thornburg Mortgage Delays Dividend (MarketWatch, Aug. 14th): "Thornburg Mortgage Asset Corp. said late Tuesday that… the payment of the company's Q2 dividend of $0.68/share has been rescheduled to Sept. 17 [from] Aug. 15… Thornburg's (TMA) board of directors said it delayed the dividend because of "significant" turmoil in the mortgage market, which triggered a sudden and "unprecedented" drop in the market prices of the company's AAA-rated mortgage securities… So far, the company said it has met all of its commercial paper obligations… Thornburg is a leading mortgage lender that focuses on jumbo, adjustable-rate home loans [that are] too big to conform to the standards of… Fannie Mae (FNM) and Freddie Mac (FRE)."
  • Citigroup May Lose Profit on Debt Rout, Analyst Says (Bloomberg, Aug. 14th): "Sanford C. Bernstein & Co. analysts: Citigroup Inc. (NYSE:C), the biggest U.S. bank by assets, may forfeit as much as $1 billion of Q3 profit because of the credit crunch in mortgages and high-yield debt. The "worst-case scenario'' for Citigroup is that the [it] marks down leveraged-loan commitments by $1.5b, takes a $500m-$1b markdown for credit lines to mortgage lenders and posts a trading loss of $700m on so-called structured products… The analysts maintain[ed] their "outperform" rating and $65 price target on the stock. Citigroup, which currently trades at about $46/share, is expected to report Q3 profits of $5.72b."

Foreclosure Impact

  • Stockton, Detroit, Las Vegas Post Top Metro Foreclosure Rates According to RealtyTrac(NYSE:R) 2007 Midyear MSA Report (PR Newswire, Aug. 14th): "RealtyTrac's 2007 Midyear Metropolitan Foreclosure Market Report(NYSE:TM)… shows Stockton, Calif., Detroit and Las Vegas documenting the three highest foreclosure rates among the nation's 100 largest metropolitan areas during H1'07… James J. Saccacio, CEO of RealtyTrac. "While foreclosure activity has skyrocketed over the past year in many cities, particularly in California, Ohio and the Northeast, foreclosure activity seems to be subsiding in parts of Texas, South Carolina and other states. Still, the overall trend is toward escalating foreclosure rates, with 82 of the top 100 metro areas reporting y/y foreclosure increases."
  • What's the Problem with Real Estate Short Sales? (Stockerblog, Aug. 14th): "The advantage [of short sales]: Homeowners… get to live in the house tax-free, [and make no mortgage payments while it's listed] and a foreclosure doesn't show up on their credit report. The banks… don't have to foreclose, they don't have to maintain the house, and they don't have to get into the business of reselling the home. They also don't get stuck with an illiquid asset... But… all homeowners who sell their property under a short sale are subject to paying tax on the amount forgiven. Escrow companies will send out 1099 forms, so the IRS will be fully aware of the homeowner's tax obligation. Sorry, the Homeowners Exemption on Gains doesn't apply… If the IRS issues a lot of liens, the short sellers won't be buying any houses, cars, or any other confiscatable assets."
  • Dayton Among Tops In Nation For Foreclosures (Dayton Business Journal, Aug. 14th): "RealtyTrac: Dayton [Ohio] is 16th among the top metropolitan areas in the US for home foreclosure rates… Dayton, Cincinnati, Columbus, Cleveland, Akron and Toledo are among the 35 U.S. cities with the greatest home foreclosure rates for the first half of 2007… Ohio Treasurer Richard Cordray: With the adjustable rate mortgages held by Ohio homeowners, experts expect that the numbers of foreclosure filings will rise even further as those rates continue to reset to higher levels over the next year and a half."
  • Foreclosure Woes Increase (Fauquier Times Democrat, Aug. 14th) Virginia: "Valerie Frank, president of Preservation Mortgage: There were just seven foreclosures [in Fauquier] in H2'06. In H1'07, 48 other properties were sold on the courthouse steps… The average price of a house sold in Fauquier County declined 25% from July 2006 to July 2007. That figure likely is skewed, as no two houses are exactly alike and average sales don't compare like to like. Probably the more reliable figure is the 7% decline in the median price of a house, a decline that is mirrored Prince William County."
  • Rising Foreclosures Chill an Already Cooled Home-Buying Market (San Diego Business Journal, Aug. 13th): "California Association of Realtors and DataQuick Information Systems: Single-family detached home sales in the state decreased 24.7% in June vs. June 2006. Sales decreased 1.4% in June from a month earlier. San Diego County… showed a 17.5% decrease in the number of sales in June compared to June 2006…. The Riverside and San Bernardino regions saw a 49.9% decrease and Orange County a 21.7% decrease for the same period… Lenders filed 4,400 notices of default in San Diego during Q2. That was a 147% increase from the 1,800 filed notices of default for Q2'06."
  • Hawaii Sees Mounting Subprime Loan Failures (Honolulu Advertiser, Aug. 12th): "Center for Responsible Lending estimated that 20.6% of the 8,300 subprime loans made in Hawai'i last year could result in foreclosures... That's more than double the 7.9% default rate for subprime loans in Hawai'i during the 1998-2001 period [and] more than the projected national failure rate of 19.5% for [2006-issued] subprime loans… Shares of Bank of Hawaii and the parents of Central Pacific Bank and American Savings Bank fell to 52-week lows last week due in part to investor [subprime] fears... Local lenders: The subprime sector represents a small part of Hawaii's $33.8 billion-a-year mortgage industry-- about 19% of the 43,000 single-family mortgages issued in Hawaii last year."

Global Impact and Alternatives To The Housing Slump

  • James Hardie, Boral Expect U.S. Slump to Curb Profit (Bloomberg, Aug. 15th): "James Hardie Industries NV and Boral Ltd., Australia's biggest building materials makers, forecast U.S. earnings will fall because of the worst housing slump in 16 years. James Hardie's profit may slide as much as 16% in the 12 months ending March 30… The company gets more than four-fifths of sales in the U.S. Boral… expects declining American sales of bricks and roof tiles to lower profit in its second-largest market… Boral CEO Rod Pearse: "Clearly subprime, easy credit without much conditionality… contributed to overbuild. We think it will take about three years for that overbuild to work through and we're probably about a year and a half into that process.''
  • Basis Capital Fund Faces 80% Loss (Sydney Morning Herald, Aug. 15th): "Basis Capital Fund Management - the first Australian company to get caught up in the subprime mortgage rout - today said losses on its funds may exceed 80%... The deteriorating subprime mortgage market has prompted some of its creditors to force the sale of some assets which is causing the worst-then-expected losses… Basis has been unable to "accurately estimate" the net asset value of units in its Yield Fund because of "further deterioration of market conditions," Basis said today in a letter sent to investors and obtained by Bloomberg."
  • Bank Of China Denies Report On Subprime Loss (Malaysia Star, Aug. 15th): "Bank of China Ltd, the country's largest foreign exchange lender, denied a report that it may have a 3.85 billion yuan (US$508mil) loss this year from investments in US subprime loans... The bank would disclose information on subprime-related holdings in its H1 earnings report on Aug 23. Bank of China said this month its subprime losses for H1 would be “insignificant'', without giving details. Six Chinese banks with shares traded in Hong Kong may lose a combined 4.9 billion yuan on subprime investments this year, Capital Week reported on Aug 12. That includes the Bank of China figure as well as an estimated loss of 103 million yuan for China Merchants Bank Co."
  • Mitsubishi UFJ Leads Banks Lower on Subprime Concerns (Bloomberg, Aug. 15th): "Mitsubishi UFJ Financial Group, Japan's largest bank reported losses… of about ¥5 billion ($42.6 million) on U.S. subprime loan-related investments as of the end of July. Smaller Sumitomo Mitsui Financial Group Inc. said it recorded "several billion yen'' of losses in Q2, after selling about ¥350b in U.S. mortgage-backed securities, including some backed by subprime loans… Keisuke Moriyama, analyst at Nomura Holdings: "It's a small share of [Mitsubishi's] trading revenue.'' Mitsubishi UFJ [said it] had a balance of ¥280b in subprime- backed securities, 97% of which had the highest AAA credit rating... Sumitomo Mitsui had an outstanding balance of ¥100b in securities backed by mortgage loans at the end of June, it said."
  • Yen Benefits From Spread Of Subprime Credit Problems (Int'l Herald Tribune, Aug. 14th): "The yen rose against the euro Monday as concern that losses in U.S. subprime mortgages might spread to credit markets and weaken growth spurred investors to reduce riskier assets financed by loans in Japan, known as the carry trade. Exchange rate fluctuations prompted traders to reduce the carry trades, lifting the yen against the pound. The yen erased its gains versus the dollar after a U.S. report showed American retail sales increased more than forecast last month and global stocks advanced, easing concern regarding credit risks."
  • Deutsche Postbank Gains Despite Subprime Troubles (International Herald Tribune, Aug. 14th): "Shares of Deutsche Postbank, the German bank with the most clients, fell sharply Monday before rebounding after the bank said it had about €800 million worth of investments linked to U.S. residential mortgages, including subprime loans… Postbank said Sunday that it had moved €600m, or $810m, in investments, including €200m in subprime-related securities, onto its balance sheet last week. The €600m stem from liquidity lines to two special-purpose vehicles run by Rhineland Funding Capital, whose subprime woes led to a government-sponsored bailout of IKB Deutsche Industriebank. Postbank spokesman: Postbank remains "convinced of the quality of these papers," all of which are rated AAA and AA.".

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

  • Housing Slowdown Spreads to Secondary Industries (The Trumpet, Aug. 15th): "The USG Corporation, the nation’s largest drywall maker, employing around 14,000 workers. Though still profitable, USGs net income plunged 68% from $176 million last year to $56m, due primarily to falling drywall prices. Over the past year, USG cut approximately 1,100 jobs… Small building supply companies are also feeling the pinch. BlueLinx, [a] building supplies distributor, reported that Q2 revenues tumbled 21.5%. Heavy equipment manufacturer Caterpillar (NYSE:CAT) said Q2 profit fell by a whopping 21%, largely due to a slowdown in the construction sector… In California, in June a meager 400 jobs were created statewide… For a state with a population exceeding 35 million, those are extremely weak employment numbers."
  • Fort Warned of Sub-Prime Crisis Early (11Alive, Aug. 15th): "State Sen. Vincent Fort (D-Atlanta) "[Subprime fallout is] going into other parts of the economy: construction, housing supplies, appliances, that kind of thing… Nearly 1,000 people lost their jobs after Metro Atlanta's HomeBanc went into bankruptcy, another casualty of the mortgage industry collapse despite the fact that they were not sub-prime lenders. "Interestingly enough HomeBanc was one of the most active in opposing a strong predatory lending bill so it's just ironic that this company that didn't want any changes to the law to protect consumers is now in bankruptcy."

Homebuilders And Housing Stocks

  • Home Depot Q2 Net Down 15%, But Beats Estimates, Reiterates Guidance (Steven Towns in Seeking Alpha, Aug. 14th): "Home Depot (NYSE:HD) reported Q2 earnings declined 15% to $1.59 billion, or $0.81/share, with adjusted EPS totaling $0.77, vs. analysts' average estimate of $0.72/share. Sales fell 1.8% to $22.18b, but still topped expectations of $22.02b. Q2 Same-store-sales were down 5.2%, in its first profit and revenue decline in four years… EPS were helped by a 5% reduction in the number of shares outstanding to 1.97B. Home Depot [reiterated that] the $10.325B sale price of its HD Supply unit to private equity could be reduced, which could impact its $22.5B share buyback recapitalization strategy. Home Depot reiterated full-year guidance for a 15% - 18% drop in EPS, not including the impact of the HD Supply sale and recapitalization."
  • Home Depot: Poor Earnings Puts Supply Division and Buyback Deal At Risk (Todd Sullivan in Seeking Alpha, Aug. 14th): "Home Depot (HD) released its earnings Tuesday, and it was just ugly. It also will lead to the death of the Supply division, and a drastic reduction of the massive buyback that was announced because without one, the other cannot happen. Even if I am wrong, and it does manage to sell Supply, it will be for such a reduced price that the buyback will still be reduced even father than already announced."
  • La-Z-Boy Posts Loss Amid Widespread Housing Woes (Reuters, Aug. 14th): "U.S. furniture retailer La-Z-Boy Inc (NYSE:LZB) reported an unexpected quarterly net loss on Tuesday amid an industrywide slump affecting companies from Home Depot (HD) to Restoration Hardware (RSTO). Furniture makers, as well as home furnishing retailers and others, have been struggling amid a shaky housing market, uneven consumer spending, credit worries and a recent history of high gasoline prices. Shoppers are foregoing purchases of big-ticket items like furniture, while slow housing sales mean fewer new homes to be furnished or renovated… La-Z-Boy, which reiterated a previously issued yearly sales and earnings outlook, said a first-quarter net loss came to $8.7 million, or $0.17/share, compared with a net profit of $2.3 million, or $0.4/share, a year earlier.
  • Fitch Downgrades Beazer Homes (Chron.com, Aug. 13th): "Fitch Ratings lowered credit ratings of Beazer Homes USA Inc. (NYSE:BZH) and placed its ratings on Rating Watch Negative Monday after the homebuilder said it would delay its Q3 financial report due to accounting irregularities. Fitch lowered Beazer's issuer-default rating, unsecured revolving credit facility and convertible senior notes to "BB" from "BB+", and its junior subordinated debt to "B+" from "BB-." The agency cited "challenging housing conditions" as well as "negative trends" in Beazer's operating margins, and a credit squeeze that could affect entry-level buyers. Fitch said the lowered ratings were prompted by Beazer's delayed reporting, which may necessitate waivers from bond holders."
  • Storm Clouds For Builders (San Francisco Chronicle, Aug. 12th): "California: "Homebuilding executives: [Builders] price cuts, ranging from $10,000 to more than $150,000 on $1 million-plus homes, have yet to [attract] buyers… California Builders Ass'n: Home construction has increased in San Francisco, on the Peninsula and in Silicon Valley.... Comparing H1'07 with H1'06, home starts in the San Jose-Santa Clara-Sunnyvale region were up 1.9% to 1,192 from 1,170… In the San Francisco-San Mateo-Redwood City market, 408 permits were issued during H1'07 compared with 347 last year, a 17.6% increase… The biggest median decline in the Bay Area came in the Vallejo-Fairfield area, where prices fell from $511,990 to $466,999 from May 2006 to April 2007, down 8.8%."

Housing ETFs

  • The Bear Market for Financials (Right Side Advisors, Aug. 14th): "It appears that my indices that track Community Banks, Homebuilders, Regional Banks and REITs are headed for a retest of the lows set on August 6: ACBQ set a new “life of index” low of 224.72, which was a sign that domino banks have fallen. America\'s Community Bankers Index
    PHLX Residential Housing Sector IndexPHLX KBW Banking IndexSPDR Homebuilders InvestmentHGX traded below its May 2004 to 168.37, as a sign that the bubble in homebuilder stocks had completed [sic] burst. BKX reached a 52-week low at 101.51. RWR reached a 52-week low of 72.54."

Commercial Real Estate and REITs

  • Alabama REIT Buys Three Hospitals (Charlotte Business Journal, Aug. 14th): "Medical Properties Trust Inc. has bought the real estate assets of three acute-care hospitals that are operated by Hospital Partners of America Inc.. The properties bought are Twelve Oaks Medical Center, which has two campuses in Houston, and Shasta Regional Medical Center in Redding, Calif… The acquisitions are valued at $100 million. The deal makes Hospital Partners, a privately held company that develops and operates hospitals in partnership with physicians, the third-largest tenant of Medical Properties Trust (NYSE:MPW)… Medical Properties Trust is a REIT that acquires and develops health-care facilities."
  • Spaces And Places: Valley Commercial Deals Likely To Rebound Soon (San Jose Mercury News, Aug. 14th): "Carl Berg announced Sunday that the deal to sell his almost 7 million-sf Mission West Properties portfolio for $1.8 billion fell apart after a bank pulled the loan from the buyer, believed to be Starwood Capital Group… Real Capital Analytics [RE tracking firm]: Dan Fasulo, managing director for Real Capital: "We've had record sales volume for most of the markets on the US coasts, San Jose specifically being one of the standouts for the strong activity." But Fasulo said the figures also reflect the high number of trades in the market. Many properties are being bought, sold and then sold again, some trading as much as four times in a year."
  • Lexington Sells 58 Properties for $940M (Forbes, Aug. 13th): "REIT Lexington Realty Trust said Monday it's selling 53 properties to a joint venture between the REIT's limited partnership and another real estate investment company for $940 million. The Lexington Master Limited Partnership and an undisclosed co-investor will buy the mostly single-tenant net leased properties located in 28 states from the REIT and its subsidiaries. Lexington Master and its co-investor plan to invest an additional $22.5m and $127.5m, respectively, to acquire more single-tenant net leased assets. Assuming financing of 70% of acquisition cost, the joint venture will buy up to $1.4 billion in assets, the REIT said."
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