Housing Market Tracker - Housing Sales/Prices 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.

Quote of the Day

"It's like the Energizer bunny. It just keeps going and going and going." - Pam Liebman, CEO of Corcoran Group, about ever-rising Manhattan home prices. (CNN Money, Jan. 3rd)

Website of the Day

The Real Estate Group of New York distributes a monthly report on rental prices and trends in Manhattan. They've just released their first year-end report. Hey, it's nice to see housing prices are going up somewhere...

Real Estate Sales and House Prices

• Builders Alliance Is Upbeat About '08 (Sign on San Diego, Jan. 4th): "California Building Industry Association chief economist Alan Nevin: "San Diego county single-family production has been cascading downward since 2002 as the county's lot supply dwindles. In 2002, single-family production totaled 9,749 units and in 2007 did not reach 4,000 units. In 2008, we project single-family permits to be in the 4,000-5,000 range, largely because of the replacement of the 1,500 homes destroyed in recent fires. In 2008, we do anticipate more than 4,000 multifamily units to be constructed, largely the result of apartment developers acquiring sites once destined for condominium development."

• How Far Might Housing Prices Fall? (Barry Ritholtz in Seeking Alpha, Jan. 4th): "WSJ: "Federal Reserve Economists study: U.S. house prices "likely would have to fall considerably" to return to a normal relationship with rents... Prices would have to fall 15% over five years, assuming rents rose 4% a year. House prices would have to fall further if the adjustment took place more quickly... That means the rent/price ratio is about a third below its long-term average. To return to normal would require some combination of falling prices and rising rents. The paper suggests house prices would need to fall about 3% a year, if rents grew in line with their 4% average annual growth this decade." That's a pretty hefty pull back over time, especially on an inflation adjusted drop."

• Manhattan Home Prices: Still Crazy (CNN Money, Jan. 3rd): "New York home prices soared during Q4'07... Broker Corcoran Group: The median (midpoint) price for a condo or co-op apartment rose 15% to $915,000. Surveys by two other brokerages, Brown Harris Stevens and Halstead, showed 14% growth, to $828,000. A survey by Prudential Douglas Elliman showed lower growth, at 6.4%, but a median price of $850,000... [On] Central Park West... a two-bedroom, 2,750-sf condo in a new, luxury building recently sold for $12.5M... a two-bedroom, 2,000-sf condo in Central Harlem for nearly $1.8M. Harlem prices rose a whopping 56% this year, to a median of $610,000, Halstead said."

• How Fast is Down? (Slatin Report, Jan. 2nd): "Radar Logic's RPX Monthly Housing Market Report: In Las Vegas, condo prices have come down a stomach-churning 17.9% year-over-year... While Florida cities Miami and Tampa are at the bottom of the barrel, the Florida market in general has lagged California in both its timing and rate of descent. Prices on the West Coast... started falling 18 months ago, while those in Florida only began to come down in mid-2007. However, the rate of descent in Miami may be picking up speed: prices there have fallen 7.4% over the 90 days and 3.5% over the 30 days ended Oct. 31. The accelerating drop follows a 144.2% leap over the five years preceding the price peak reached on May 15, 2006. The market then took a year to fall just 3.2%."

• What's Next for Housing? (Markos Kaminis in Seeking Alpha, Jan. 2nd): "New home sales data is taken upon the signing of sales contract, while existing data is taken on the closing of the sale, which usually lags by 1-2 months. So, if new home sales is the leading indicator, then we should see this existing sales data deteriorate for at least 1-2 months more. The spring is the most important selling season for housing, so a lot is weighing on what happens after February. Inventory declined, which is a very positive piece of news, but the level remains inflated... too high to support prices... We think it will be another 6-12 months before prices stabilize."

• Building Is Down 32% For 2007 (Pahrump Valley Times, Jan. 2nd) Nevada: "Charles Abbott and Associates issued 1,167 building permits in 2007, with only two working days left in the year -- a 32% drop from the 1,817 issued in 2006. Permits issued for construction of single-family residences dropped 42%, from 717 permits to 416... Building activity was about as busy as normal in H1, until it slacked off in H2 as the foreclosure crisis caused by the escalation of sub-prime mortgages led to a drop in the real estate market nationwide. Total valuations of new construction sank 22% from $101.8 million in 2006 to $79.5M for almost all of 2007."

• Local Home Construction Plunged 20% In 2007 (Austin Business Journal, Jan. 2nd): "Residential Strategies Q4 report: Texas: "New home construction slowed nearly 20% in 2007 compared with the previous year as sales of new homes declined 9% year-over-year. Homebuilders started 13,478 new homes in 2007, down from 16,794 starts in 2006... builders closed on 14,629 new homes in 2007, a 9.1% decline from the 16,085 homes they closed on in 2006. In Q4 alone, sales fell 14.1%... At year-end builders were under construction on 3,930 homes, down 24% from year-end 2006."

• Another Dose of Housing Hogwash (Motley Fool, Jan. 2nd): "[One reporter wrote about] the NARs newly released existing-home-sales report... which cited that November new-home sales had declined by 9%: "The new-home numbers are thought to give a more current account of the health of the housing market because they are recorded when a contract is signed. The existing home figures lag behind because they are based on contract closings, many of which reflect deals negotiated months earlier... But with Beazer (BZH), for instance, experiencing a cancellation rate of about two-thirds of its initial contracts, and with other builders such as Centex (CTX), Lennar (LEN), Pulte (PHM), and Toll Brothers (TOL) all watching greater-than-usual numbers of customers walk away from deals, the reporter's contention becomes totally fallacious."

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.

Comments

[User 124892]

One thing about over paid under performing bankers on Wall Street is that they always come up with new ways to lose money. The greatest banker was J.P. Morgan. You would think the silk zoot suited bankers of today would have learned something about banking.