Quote of the Day
"My wife and I would love to move. We can't sell our house. I don't know if we could give it away." – Jim Martin, about the Florida sub-division that he lives in. Martin bought his home from Lennar in 2004 and says the development is mostly owned by burned investors and the subdivision is now poorly-maintained and crime ridden, according to Martin.
Get Real On Housing Developments. California: "By 2030, the Bay Area [will have] an additional 1.5 million people who will need somewhere to live. In San Francisco, housing developer Lennar (LEN)... plans to develop 10,000 units... (25% of which will be below market rate) on the old Hunters Point Naval Shipyard; Civic leaders [sh]ould heap praise on such a project. Here in the Bay Area, opponents are collecting signatures for a ballot measure demanding that... at least 50% of the units sell at below market rate. This will effectively kill what is the single most important infill, sustainable, affordable and transit-oriented housing proposal in California."
Neighbors Criticize Deldot Road Deal. "Residents in several Mill Creek neighborhoods are crying foul over plans by the Delaware Department of Transportation to allow a developer to pay for improvements to a problematic intersection along Newport Gap Pike. The neighbors are criticizing the agency for abandoning them to serve the interests of Toll Brothers (TOL), which intends to build 160 homes off Hercules Road. Toll has agreed to pay the roughly $5 million needed to widen the intersection... DelDOT contends the intersection was already slated for improvements before the Toll project came along."
Investors File 54 Global Warming-Related Shareholder Resolutions. "U.S. investors have filed 54 global warming shareholder resolutions with U.S. companies, nearly doubling the number filed two years ago. Companies targeted in the 2008 proxy season include... Standard Pacific (SPF) in the building sector... Fourteen of the 54 resolutions were withdrawn by investors after the companies agreed to disclose potential impacts from emerging climate regulations and strategies for reducing greenhouse gas emissions... Resolutions have also been withdrawn from... Harley Davidson (HOG), KB Home (KBH), Lowes (LOW)... and Parkway Properties (PKY)."
D.R. Horton Holds Home Sales Event. "D.R. Horton's (DHI) sales event called "Find the Bottom -- Negotiation Sale," allows prospective home buyers to negotiate a deal on 300 completed houses. The event began Saturday and is being held in all 40 of D.R. Horton's neighborhoods valley-wide... Jeff Ward, director of marketing: "A new home purchase often accompanies a 'new home wait,' which typically... forces buyers to gamble on interest rates." Horton has more than 300 homes ready for occupancy... This week only, DHI will negotiate down payment assistance on more than 150 move-in homes [and] has lowered the price of the 2350 floor plan to less than $130/sf in some valley locations."
Lennar Shrinks From Pasco Market. "Lennar still owns hundreds of acres near U.S. 41 and State Road 52 in the northwest corner of the Connerton development in central Pasco. It also owns dozens of vacant, ready-to-build lots... in townhouse communities near Zephyrhills... But like Pulte Home Corp. (PHM), which backed out as primary developer at Wiregrass Ranch, Lennar is getting out of the cash-intensive business of turning virgin land into ready-to-build home sites. It pulled out of a three-way deal with the developers of Bexley Ranch and Sunlake Plaza, a shopping center fronting on State Road 54."
Builder Announces New Prices. Florida: "Beazer Homes (BZH) has lowered prices for homes in Victoria Park in DeLand. New three-, four- and five-bedroom single-family homes range in size from 1,400-4,000-sf of living space and are priced from $184,990. Beazer Homes acquired 183 home sites in Victoria Park off Orange Camp Road from the St. Joe Co."
Condo Complex Being Sold To An Apartment Developer WHY THE SWITCH? Virginia: "Sluggish sales at the Cobblestone Square condominium complex... have led the developers of that project to sell what's left to be built to an apartment developer. The partners involved in Cobblestone, which include K. Hovnanian Homes (HOV) and Garrett Development Corp., are under contract to sell the rest of the development to JLB Partners... In 2002, [the project] was pitched as an apartment community, so the switch does not require zoning changes. In 2004, after seeing condominium developments sell out quickly... the project switched to condos... Some of the... condo owners are worried [that] rental units... might hurt their property values."
Neighbors Ramp Up Criticism Of Developer. Texas: "Where [homeowners understood a boat-ramp would be built], a sign went up announcing the space was available for a home site... D.R. Horton, the company that developed the neighborhood... told [one resident] that the U.S. Army Corps of Engineers denied the permit for the ramp. But Corps spokeswoman Martie Cenkci said she didn’t have any record of D.R. Horton filing for a permit. Although residents say they’re certain the company intended to build the ramp, documents filed at city hall don’t reflect that. The rear lot was always platted as a home site on subdivision plans."
KB Home To Quit Building In Some Markets. "Homebuilder KB Home said Friday that it would stop building in Chicago, the mid-Atlantic region and Albuquerque, N.M., after finishing houses under construction in those regions. KB Home has five communities under development in Albuquerque, four in the Chicago area and five in the mid-Atlantic, which encompasses Virginia and Maryland, spokeswoman Lindsay Stephenson said. "All three of those areas are smaller operations," Stephenson said. "We don't anticipate that we will be able to grow our business near term sufficiently or properly in those areas."
CEO Pay Rise Shenanigans. "Despite being hard hit by the housing and mortgage slump, some companies — including Washington Mutual (WM) and Toll Brothers Inc. — have made surprising changes in benchmarks for executive bonuses going forward. What they are doing is moving the goal posts in a way that all but guarantees executives will score big paydays. That's the result when you take out the bad stuff that could drag down compensation and include things that will likely prop it up.It makes you wonder what boards of directors are thinking in the midst of a housing and mortgage crisis."
Hovnanian CEO's Pay Called Too High. "Proxy adviser Proxy Governance: Hovnanian Enterprises Inc. board members should protest against "excessive" executive compensation at the New Jersey-based homebuilder by voting not to re-elect the board of directors. The average three-year compensation for CEO Ara Hovnanian is almost 10 times that of CEOs of comparable companies... Other executives at Hovnanian are paid 74% more than their peers. "The company's overall executive compensation is excessive under our pay-for-performance model," the report said. Ara Hovnanian's total compensation in 2007 was $8.5 million, according to company regulatory filings. That included salary of $1.1M and option awards totaling $7.1M."
Centex, Pulte Dump Land In Rancho. California: "Two of Sacramento's top builders have unloaded 250 acres approved for new homes in Rancho Cordova for 16 cents on the dollar... Ron Alvarado and Charles Somers, land developers themselves... bought the property last month from Pulte Homes and Centex Homes (CTX) at a steeply discounted price of $8 million, according to multiple real estate sources... The builders paid $50M during the housing boom in 2004, then pumped millions more -- possibly as much as $30M-- in site improvements into the venture, those sources said. The ranch land... has approvals for 879 homes."
Fear Of Buying Spurs Walkaways. "Dramatically falling condominium prices are good for vulture funds, but encourage retail buyers to forfeit their deposits and walk away from projects ready for closing. It's a growing problem affecting public and private condominium developers. Bonita Springs-based WCI Communities (WCI) said in its third quarter statement that there was a significant increase in cancellations, defaults, rescission claims and lawsuits in the first nine months of 2007."
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