Homebuilders Pulling Out of More Markets - Housing Tracker

Homebuilder Stocks

St. Joe Stock Getting Ahead of Itself? “In order for The St. Joe company (JOE) shareholders to realize value, the company must ultimately convert its 700,000 acres… of land into cash... Recently, JOE has resorted to interesting… methods of doing so, offering 3000 acres in an online auction. Up for bid is land in three St. Joe properties-3,000 acres of recreational property in Gadsden County near Tallahassee, 56 acres in Port St. Joe, and 29.5 acres in Bay County near Panama City. We're not sure whether this represents desperation, or whether JOE is dipping its toe in the water of a new potential distribution channel.” (Clyde Milton in Seeking Alpha, Apr. 21st)

Rail Will Give Honolulu New Look. “Honolulu’s [proposed] elevated track raises concerns on blocking views… It’s expected to give commuters an alternative to highways while reducing urban sprawl. The 19 planned transit stations also are expected to foster the creation of live-work-play communities and opportunities for moderately priced, high-density housing. Those economic development opportunities have some guideway neighbors looking forward to the project. Those groups include General Growth Properties (GGP), which owns Ala Moana Center and the planned Ward Neighborhood project, and D.R. Horton (DHI), which is developing East Kapolei's massive Ho'opili planned community.” (Honolulu Advertiser, Apr. 20th)

Buyers Of Condo-Hotel Hybrids Who Lost Big Are Now Suing. “Those who [bought] condo-hotel units that are rented out as luxury hotel rooms complain that they aren't making the money they were promised… Resort at Singer Island, a 20-story condo-hotel that recently won AAA's coveted Four Diamond Award, now faces two possible class-action lawsuits from owners who claim they were duped into buying units that have become financial drains. The most closely watched lawsuit involves West Palm Beach attorney James Beasley's claims that the resort, owned by the financially troubled WCI Communities (WCI), violated federal law by selling the units as investments and not registering them with the SEC.” (Palm Beach Post, Apr. 20th)

Lennar Touts Special Pricing, Mortgage Rates. “Lennar's "Let's Get America Moving" campaign features a mortgage plan from Universal American Mortgage Co. with 2.88% interest rate the first year, a 3.88% interest rate the second year and a 4.88% fixed interest rate for the remainder of the mortgage, according to Jassy Friddle, marketing manager for the Lennar Tampa division… The special pricing being offered by Lennar (LEN), as well as UAMC mortgage terms, is available on a limited number of new homes priced from the $110,000s. Friddle: Lennar offers a variety of homes… throughout the Tampa Bay area with "superior and luxurious upgrades included in the price of the new home.” (Tampa Bay Online, Apr. 20th)

K Hovnanian Homes Takes Home Seven Awards At Sales And Marketing Convention. “The building industry honored K. Hovnanian Homes (HOV) with seven top awards Tuesday night, including Community of the Year for communities with fewer than 25 homes. The awards came during the annual Sales and Marketing Awards presentations at the Atlantic Builders Convention in Atlantic City. Given by the New Jersey Builders Association, they are considered the most prestigious home building or new residential construction awards in the state, according to a Hovnanian spokesman.” (APP.com, Apr. 20th)

Family Of Real Estate Agent Slain In Mckinney Suing D.R. Horton. Texas: The family of a real estate agent who was killed while showing a model home in McKinney is suing D.R. Horton. A lawsuit filed by Sarah Walker's parents in Tarrant County civil court Thursday says that security was "nonexistent or totally inadequate to protect" anyone who was working at the model home. Walker, 40, was stabbed 33 times and beaten in the face in July 2006 while showing a home in the 5700 block of Conch Trail Road.” (Star Telegram, Apr. 20th)

Slimmer Sofas, Chairs In Demand. “Jeffrey Mezger, CEO of builder KB Home (KBH), says new-home buyers started asking about smaller floor plans soon after the collapse in subprime lending last year. Its average floor plan has since shed about 200-sf. Still, he says, new houses today remain far bigger than a decade ago. Yet room sizes themselves may be shrinking. The high-ceilinged "great room," standard in many new houses for years, appears to be losing some ground to smaller rooms devoted to specific activities. Pulte Homes (PHM): Many buyers now want media rooms, home offices—even scrap-booking rooms in addition to a bigger all-purpose room.” (Chicago Tribune, Apr. 20th)

If You Walk Away, Expect To Pay. “Toll Brothers (TOL) saw 28% of buyers cancel in Q1’08… Centex Homes's (CTX) cancellation rate was 33% in Q3’07... NVR Homes (NVR) experienced a 37% cancellation rate in Q4... Harvey S. Jacobs, a Rockville real estate lawyer: Builders typically ask for 10% of the contract price as a deposit [and] frequently ask buyers to sign a promissory note for an equal amount of money… It's a liability that lies dormant but that serves to double the amount of cash the buyer has at stake if he pulls out of the deal… [Builders think] if buyers are willing to forfeit $50,000 to walk away from a $500,000 home sale, maybe being on the hook for $100,000 would keep them in the deal.” (Washington Post, Apr. 20th)

Homebuilders Join Growing Texas Trend Of Counteracting National Jitters With Public Information. “Worried that continued depressing news about the national economy is adversely affecting the real estate industry here, the Central Texas Homebuilders Association has named a committee with VP Terry Neiman as its chairman to make sure the public knows how and why the Fort Hood vicinity is different.” (Killeen Daily Herald, Apr. 20th)

Ryland Homes Leaving Area. Ryland Homes (RYL) is pulling out of the Greater Cincinnati and Northern Kentucky markets. Ryland, which built 183 homes last year in the region, said it will curb its local operations this year and close up shop by 2009. The move will halt home construction by Ryland throughout Greater Cincinnati, Northern Kentucky and the Dayton, Ohio, area… Ryland has 34 local employees, "most of whom will continue to work through 2008 and into 2009,” Ryland said… In February, Beazer Homes (BZH) announced it would begin shutting down local operations this year. [In] September Ryan Homes laid off local employees after deciding to cease construction in six communities.” (Cincinnati.com, Apr. 19th)

Many Upgrades Offered By Ryland. “Buy now and get more at Ryland Home communities throughout the Chicagoland suburbs. How much more? For a limited time, buyers receive a free gourmet kitchen, stainless-steel appliances, granite countertops, hardwood flooring, family room fireplace and master bedroom luxury bath.” (Chicago Daily Herald, Apr. 19th)

NVR Reports $43.5 Million in Net Income. “NVR Homes (NVR) reported net income of $43.5 million, or $7.42/share, for Q1’08. Compared to Q1’07, [that’s] a 49% drop in net income and a 43% decline in EPS. Overall, NVR generated $870M in home building revenue, a reduction of 19% versus 2007… NVR accepted 2,731 new orders, 30% fewer than last year. But closings only dropped 9%, with 2,465 settlements during Q1. The average price for these closed homes slid 11%, to $352,600. NVR: “The average new order price declined in all regions… 14% year-over-year, to $320,000… primarily due to an 18% decline in the Mid-Atlantic region.” NVR’s Q1 company-wide cancellation rate was 22%.” (Builder Online, Apr. 18th)

Centex Selling Clayton Township Development Project To Undisclosed Recipient. Michigan: “One of the township's largest developers, Centex Homes, owner of Cole Creek Estates, announced at the township board meeting that it has a tentative agreement to sell the project to another developer. The buyer has not been disclosed. The Township Board last week gave conceptual approval to reword a legal agreement that included having Centex pay to bring water and sewer to the site. Because there is an outstanding balance, Centex needed township approval to move forward with the sale of the property on Morrish Road near I-69. Centex rep Kenneth Bullis: Centex is financially backing the buyer.” (Michigan Live, Apr. 18th)

Leander Council Rejects KB Home Project. “A KB Home development that would have brought more than 700 homes and water and wastewater lines to parts of eastern Leander was rejected by City Council members late Thursday. Had it been approved, the proposed subdivision could have spurred development in the city's eastern side, which has been largely untouched by the rapid growth that's hit other parts of the city in recent years… Opposing members said they didn't like the layout of the proposed subdivision or the size of the lots in the project.” (Austin American Statesman, Apr. 18th)

Tracking Device Locates Stolen Air Conditioners. Texas: A Global Positioning System tracking device has located several air conditioners which have been stolen from construction sites in Lewisville, and the discovery of the units may soon lead police to the thief or thieves. Capt. Kevin Deaver of the Lewisville Police Department said representatives of Centex Homes contacted Lewisville police Thursday morning to report that their GPS tracking device had located two of their air conditioners which had been stolen from homes under construction in the 600 block of White Rock Drive.” (Courier Gazette, Apr. 18th)

Fitch Affirms First Chicago/Lennar Trust I 1997-CHL1. “Fitch Ratings has affirmed First Chicago/Lennar Trust I, series 1997-CHL1, commercial mortgage certificates (FC Lennar 1997-CHL1)… Despite realized and projected losses to the collateral, the current credit enhancement to the rated classes in relation to the credit quality of the remaining collateral warrants the affirmations… In reviewing CMBS Re-REMICs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral. The overall expected losses reflect the single sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches.” (Press Release, Apr. 18th)

Southwest Charlotte Development Plans Scrapped. “Centex Homes said it's too nervous about the economy to go ahead with its project for the corner of Tyvola Road and Tyvola Centre Drive [in southwest Charlotte.] It wanted to build up to two hundred town homes on more than thirty acres there… City councilman Warren Turner represents the Tyvola area. He said he's glad the project isn't moving forward because he feels the Charlotte housing market is already building more than it can handle.” (WSOC TV, Apr. 18th)

The Other Orange County. “Homebuilder Standard Pacific (SPF), based in Irvine, recently replaced its CEO and got 45 days of breathing room from its bankers as it negotiated new financing… Lennar recently suspended sales on two large projects, Central Park West in Irvine and A-Town in Anaheim, that were to involve some 4,000 homes. In March developer Urban West withdrew plans for 450 condominiums in Anaheim that had been opposed by neighboring Disneyland. Mark Boud, whose Irvine-based firm Real Estate Economics tracks residential construction in the county, estimates that the volume of new homes permitted for construction will fall to 4,700 this year from 8,000 in 2006.” (BusinessWeek, Apr. 18th)

Meritage Homes CEO Steven Hilton Took 56 Percent Cut In Compensation In 2007. “SEC filing: Meritage Homes Corp. CEO Steven Hilton's total compensation fell from $9.74 million in 2006 to $4.31M in 2007. The biggest year-to-year change came in non-equity incentives, which totaled more than $7M in 2006 but were nonexistent in the past year. Hilton's 2007 pay package included $1.02M in salary, stock awards valued at $205,233 and stock options valued at $2.88M. He also received $ 206,848 in other compensation covering items such as health insurance, 401(k) funds and travel benefits… Meritage Homes (MTH)… reported a loss of $289M last year, or $11.01/share.” (Phoenix Business Journal, Apr. 18th)

Pulte Donates $1.2 Million To Help School. “Pulte Homes will invest $1.2 million to support operations at Festival Foothills Elementary School [located in its master-planned Festival Foothills community] through the 2009-10 school year. Wickenburg Unified School District board approved the donation agreement to help alleviate the district's budget crunch… District Superintendent Brett Richards said other factors impacted the district's budget, such as the housing market slump… Pulte donated the 14-acre site and more than $2 million for construction and capital costs. Pulte donated about $350,000 to support the school's operations this school year and has committed about $850,000 in operational funds for the next two school years.” (Arizona Republic, Apr. 18th)

Beazer Launches New Building Program. Executives at Beazer Homes unveiled today a nationwide building program that sets a new environmental standard for the homes it builds. Under the new eSmart program, every Beazer new-home start will include a handful of environmentally conscious home products as standard items. The decision to launch the program arguably was a baby step toward true green building. However, it marked a crucial first step toward beginning to “raise the benchmark nationally” for green building, said Tony Callahan, SVP of national purchasing and design.” (Builder Magazine, Apr. 18th)

Meritage Homes Prices Public Offering Of 4M Shares. “Homebuilder Meritage Homes Corp. said Thursday that it priced a public offering of 4 million common shares at $20.50 apiece, about 2 percent below its closing price of $20.89. Meritage intends to use proceeds from the offering for working capital and general corporate purposes. Meritage said it granted offer underwriters an option to buy up to an additional 60,000 shares within a 30-day period to cover any allotments.” (Forbes, Apr. 17th)

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Comments

[special1person]

Realtors in Texas want to "make sure the public knows how and why the Fort Hood vicinity is different"?

Yes, it's true! The Laws of Physics don't apply to the Fort Hood area.

Since when can soldiers afford to buy a house?

Many soldiers families are on food stamps.

An E-1 new recruit makes $28,738/year, including bennies:
usmilitary.about.com/l...

Now how on earth is someone making that kind of money going to be able to afford to buy a home?

Texas Realtors are not good at math.