Housing Market Tracker - Homebuilder Review

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.

Quotes of the Day

“Don’t be surprised if in 2009 you start seeing Lennar buying a lot of land again.” -Jack McCabe, a real estate consultant based in Deerfield Beach, Florida, who sees homebuilders and developers "soon" buying up the lots they've been shedding in this downturn. (Florida News Press, Dec. 23rd)

"Shorting builders has become expensive, however, and we believe that the group remains susceptible to sharp positive sentiment swings." – Goldman Sachs homebuilder analyst Chris Hussey, after downgrading homebuilders Hovnanian, D.R. Horton and Toll Brothers. (Trading Markets, Dec. 25th)

Homebuilder Stocks

• Goldman Sachs Cuts Estimates For D.R. Horton, Hovnanian, Toll (Trading Markets, Dec. 25th): "Goldman Sachs lowered its estimates on D.R. Horton Inc. (DHI), Hovnanian Enterprises Inc. (HOV) and Toll Brothers Inc. (TOL) Monday, citing expectations for lower new-home orders, deliveries and gross margins than previously thought. Specifically, the firm widened its 2008 estimates for Horton to a loss of $1.10 from a loss of $0.02/share, cut its 2009 earnings estimates [and] 2010 profit forecast... The firm [predicted higher] Hovnanian losses of $4.80 from a loss of $1.50/share for 2008, [and] cut its 2009 estimates [and] 2010 profit forecast. For Toll, Goldman reduced its 2008 earnings forecasts to $0.01 from $0.94/share, 2009 earnings estimate... and 2010 earnings estimate... Goldman also lowered its six-month target price for Hovnanian to $6.50 from $11, and left its targets for Toll and D.R. Horton unchanged."

• Indexes Close Positively In Consecutive Days (Bradenton Herald, Dec. 24th): "Fortune magazine just came out with its Investor's Guide 2008 listing 44 stocks and mutual funds to consider for the coming year. Among the picks are Florida real estate company St. Joe (JOE), Dick's Sporting Goods (DKS) and video game maker Electronic Arts (ERTS)."

• Homebuilder, Others Give Experiences As Gifts (Washington Business Journal, Dec. 23rd): "Custom homebuilder Winchester Homes traditionally had given clients a crystal bowl and candlesticks after they moved into their new places. A welcoming gift it was, and a show of appreciation for their business. But... these days, Winchester is giving the gift of an experience to clients and brokers through Excitations Inc., a company that packages and sells gifts such as sky diving, a hot stone massages and an at-home cooking class with a private chef. While increasingly popular with consumers, experience gift giving is now moving into the corporate market -- not only during the holidays, but year-round, too."

• Smaller Builders Gobble Up Lots In Lee County (Florida News Press, Dec. 23rd): "In the past two months, Hovnanian Enterprises (HOV) sold 812 lots in Cape Coral to Deltona Corp. and is trying to sell its Lehigh Acres lots. Lennar Homes (LEN) sold its 700-acre Stoneybrook North project in North Fort Myers to Metro Development Group and its 362-acre Cypress Shadows to Cameratta Properties... The three buyers also are developers but smaller and without baggage of debt and excess land that plagues some of the big players... Beth Fisher, [head] of land inventory for the company, said Deltona has no plans for the property — they were just good deals that came on the market."

• Home Prices Reduced (Naples News, Dec. 23rd): "Ryland Homes (RYL) has cut home prices at Promenade at The Forum in Fort Myers and at Sandoval in Cape Coral. Joe Fontana, president of Ryland Homes in Southwest Florida and the Tampa Bay region: Homes are now priced from the $190s in the Castillo series, from the $240s in the Chateau series and from the $320s in the Palazzo series of homes. Fontana said the Castillo series offers 3-4BR designer homes... Ryland’s Chateau series features 3-4BR homes... The Palazzo series offers 4-5BR homes... prices are now from $204,990. New 3-4BR homes at Sandoval range from 1,697-sf of living space to 2,364-sf."

• Housing Slump May Be Golden Opportunity For Habitat For Humanity (Dallas Morning News, Dec. 23rd): "Former real estate executive and longtime visionary of Dallas Habitat for Humanity, Philip Wise: The housing industry slump provides an unprecedented opportunity for the nation's largest nonprofit builder to shelter more poor families. We can now acquire raw land, prepared lots and possibly finished homes from builders, investors and lenders cheaper than any time in the previous seven or eight years. We'd like to double Habitat production in the big cities in the next four years." To pull this off, Mr. Wise has just launched a fund to help Habitat's largest affiliates buy, finance and develop property at depressed prices."

• Pulte Still Planning Brookshire (Lake County News Sun, Dec. 22nd) Chicago: "Pulte Homes (PHM) told the Village Board this week they plan to follow through on the proposed 89-acre Brookshire Estates residential development... Pulte land acquisition manager Mark Mastrorocco requested informal permission from the board to revise proposed house elevations presented in 2003 in Pulte's original proposal. Trustees were supportive and referred the matter to the Jan. 15 meeting for formal action. The project calls for 138 houses priced from the low $400,000s to mid $550,000s. Most of the houses will be about 3,800 square feet and have three-car garages."

• Dominion President Resigns (Columbus Business First, Dec. 21st): "Dominion Homes Inc.'s president and COO Jeffrey Croft, 49, has resigned to "pursue other interests." He has been with the company since March 2006. Dominion (DHOM) Chairman and CEO Douglas Borror will take on the president's title, starting Dec. 31. William Cornely, executive VP of finance and CFO, will step in as COO. Croft... had previously worked 19 years for Pulte Homes Inc. (PHM). Dominion lost $34 million on nearly $257M in revenue last year amid a housing slump that has deeply cut demand for new houses in the region. In 2004, [Dominion's sales] totaled $542M [and] the company's profit totaled $41.7M."

• Dominion Homes Faces NASDAQ Delisting (Louisville Business First, Dec. 21st): "Dominion Homes Inc. told investors it received a letter from the NASDAQ Monday stating the company is out of compliance with NASDAQ rules because its stocks hasn't held a minimum market value of $5 million for the previous 30 trading days. Dominion has until March 17 to regain compliance by bringing its shares' market value to $5M or above for at least 10 consecutive days... Dominion (DHOM) builds single-family houses and condos in Central Ohio and Louisville and Lexington, Ky... Dominion shares closed Monday at $0.41."

• Hundreds Of New Homes Approved For Salisbury, Maryland (Delaware Online, Dec. 21st): "The phases adding the bulk of the more than 670 residential units to The Villages at Aydelotte Farm development in Salisbury were approved Thursday [by] the Salisbury-Wicomico County Planning and Zoning Commission, unanimously approving...177 lots and [an]other 287 lots, in a mix of single family homes, town houses and condominiums... The first phase of homes, starting at $179,000, will build 61 units, said Bryan Lloyd, the project co-developer, working with developer Kirk Kinnamon. "It's a tough market right now, obviously," Lloyd said. Ryan Homes Inc., a subsidiary of NVR Inc. (NVR), is the primary homebuilder."

• Davis Homes Shuts Some Sales Sites, Lays Off 15 (IndyStar, Dec. 21st): "Citing slowing home sales, Indianapolis builder Davis Homes has closed about half its sales offices. Officials said functions were consolidated into the company's remaining seven sales offices in the Indianapolis area. President Bradley C. Davis said the closings, done over the past several months, are part of cost-savings measures taken at a time of slowing sales of new homes. The company also has reduced the number of "base model" homes it offers in its subdivisions from 30 to about 18. But buyers are given choices to customize their homes. The company said the closings involved the layoffs of 15 workers."

Tracking the Housing Market and Homebuilder Stocks You can track developments in the housing market, homebuilder/housing stocks and review subprime news by bookmarking our Housing coverage or subscribing to our free email service. 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.