Quote of the Day
“As it turned out, the bidding was quite spirited.” - Auctioneer Max Spann on a luxury condo auction he conducted on behalf of Beazer Homes (NYSE:BZH). Beazer had reserved the right to take back 18 condos if the bidding didn't go well.
In These Times, Less Offers More. Texas: “In theory… new houses should get smaller, with more money devoted to energy efficiency rather than extra rooms. There should be… denser units on smaller city lots. So far, builders report no significant movement in that direction in North Texas… Many examples of denser development are evident here... But inventory levels for townhomes around the central cores are unusually high, indicating that we may already have too much high-dollar product. Real Estate research firm Residential Strategies: There's been a surprising increase in suburban townhomes… and they have much lower inventories… But no sign yet of what Fortune magazine describes as the downsizing of the American home.”
Auctions An Alluring Option. NJ: “Auctioneer Max Spann said Beazer Homes auctioned [26 of its North Wildwood condos] to jump-start cash flow and reduce its carrying costs. Beazer paid $14.2 million in October 2005 for [the land]. The first condo sold fetched $1.15M last August. But by March 2008, fewer than 15 of the 60 units had sold… Minimum starting bids were $175,000 for 13 condos originally priced from $529,000 and $869,000 and $275,000 for 13 homes initially offered between $899,000 and $1.249M. Beazer agreed to sell at least eight condos… to the highest bidders above the minimum… All 26 buyers purchased properties for personal use rather than investments.”
Ceos' Pay Dropped With South Florida Companies' Fortunes In 2007. South Florida: “The raises were slim and the bonuses few, but most CEOs of area public companies still took home total pay in 2007of more than 500K— with many pocketing tens of millions… Lennar Corp.'s (NYSE:LEN) Stuart Miller… voluntarily forfeited $9.95M in stock and option awards in 2007 because the homebuilder failed to meet financial goals in the troubled housing market... Miller's move was unusual… in comparison to competitor KB Homes' (NYSE:KBH) former CEO, Bruce Karatz, who had a multimillion-dollar windfall, despite leaving amid a stock option scandal… Miller had no bonus [but received] a $1M salary in 2007 and took home $130,397 in other perks and compensation.”
Communities Keep 'Em Down On The Ranch. “Sean Degen, national VP of architectural services at Pulte Homes (NYSE:PHM), which owns the Del Webb brand: “Ranches are now most often found in communities meant for older people… "About 99% of the homes we sell at our Del Webb projects are ranches.” The ranches of today are quite different than their predecessors. At Del Webb's original Sun City in Arizona, built in 1960, the ranches ranged from about 900-1,100-sf... Some Del Webb models currently are as large as 4,000-sf, though about 2,000-sf is more typical.”
Togetherness Runs In The Family. “U.S. Census Bureau: The number of households with three or more generations living together grew 38% from 1990 to 2000. That was nearly five times the growth rate of homes with two generations during that decade (8%), the most recent for which statistics are available. Gerard Lewis says his experience as a senior project manager for Toll Brothers (NYSE:TOL), which is building luxury homes in the Lehigh Valley and Poconos, confirms the numbers.”
Ryan Homes Offers New Closeout Prices At Independence Place In Barnegat. NJ: “New closeout pricing is being offered by Ryan Homes at Barnegat's Independence Place. But home buyers are urged to be swift, as the community is quickly selling out, with just 11 of the 48 single-family homes left… And there are further incentives to mark Ryan Homes' 60-year anniversary. Qualifying buyers who use NVR Mortgage (NYSE:NVR) (a Ryan subsidiary) can receive 60% off on options up to $60,000 or a special 2-1 buy-down financing rate of 3.99% the first year, 4.99% the second year and 5.99% the third year.”
Richmond American Provides Discounts. “June is National Homeownership Month, and Richmond American [M.D.C. Holdings] (NYSE:MDC) is celebrating with its "Richmond Ready, Right Now," offer, which provides discounted pricing on finished homes that contract by June 18 and close by June 30. Special financing may also be available through Richmond American's affiliate, HomeAmerican Mortgage Corp… "We have a great selection of finished homes, with prices starting as low as the $160,000s. Each home is different, but they all come complete with a variety of great design upgrades.”
New Homes To Get Green Certification. “A community of 69 energy-efficient homes planned for Peoria are slated for green certification under a national home-building program. Units at Pulte Homes' Cabrillo Point community near Bell Road and 73rd Avenue are expected to use 30% less energy than standard new homes. The units come with blown-in insulation, vinyl cased windows, Energy Star appliances and compact fluorescent lightbulbs, all of which are considered energy-saving devices. The homes also use dual-flush toilets and no-drip faucets to save water. Recycled materials and wood from sustainable forests are used to build the units.”
Del Webb Unveils Four Floor Plans At River Pointe In Manchester. “When it comes to buying a new home, many active adults are looking for an elegant residence they can move into without much hassle. And, according to developer Pulte Homes… Now, River Pointe is offering buyers four new floor plans: Madison at 1,269-sf, Jefferson at 1,399-sf, Copper Ridge at 1,596-sf and Copper Ridge Loft at 2,273-sf.”
Orleans Homebuilders, Inc. Declares Cash Dividend. “Orleans Homebuilders, Inc. (OHB) announced that it has declared a quarterly cash dividend of $0.02 per share on the Company's outstanding common stock. The cash dividend will be payable June 30, 2008 to shareholders of record at the close of business on June 16, 2008.”
Centex CEO Received $4.2 Million In Compensation. “SEC filing: The top executive of Centex Corp. (CTX) got compensation that the homebuilder valued at $4.2 million in its latest fiscal year, less than half what he received the year before, as the company lost $2.66 billion. Chairman and CEO Timothy R. Eller was paid a salary of $920,000 and an incentive-plan payment of $216,459. Eller also got stock grants and options valued at $1.5M, and other compensation of $1.6M, almost all of it a cash bonus related to the exercise of options granted in 1998… In the previous fiscal year, he got compensation that the company valued then at nearly $8.8M.”
Home Builders Blitz Nears Completion. “Teams of building professionals in Habitat for Humanity’s Home Builders Blitz 2008 are wrapping up construction of 263 new houses over the next few days. More than 1,000 building industry professionals are working with 110 Habitat affiliates to accomplish the feat… It has been a difficult task. John White, a Pulte Homes construction manager in Harford, Md., reported on Thursday that the site was under a tornado watch, and crews had to get creative to protect green concrete from a torrential rain.”
After 6 Years And $54 Million, O.C.'S Great Park Offers Little. California: “Feb. 16, 2005: The Navy's auction of El Toro ends, with Lennar Corp. buying the base for $649.5 million. July 12, 2005: Lennar presents the first check to the city of Irvine of the $201M in developer fees for construction of the Great Park. June 20, 2006: The Orange County grand jury releases a report on the Great Park titled "The Orange County Great Park: Whose Park Is It?" [which] says that the city has betrayed the public trust by assuming control of the Great Park and that the county should consider suing to regain some authority.”
Developers: With Slump And All, Just Writing To Say We’re OK. Nevada: “In a telling sign of the times, the developers of the biggest planned community in North Las Vegas has sent out a news release to announce they are still in business… Park Highlands is the future of North Las Vegas, the next step in growth in the nation’s fastest-growing city. The city of 230,000 residents is expected to more than double in size to 500,000-plus over the next 20 years. About 50,000 of those new residents will live in Park Highlands when the 16,000 planned homes are built over the next decade.”
Builders Work Out Blueprint For Future. “Tough times in the homebuilding industry have turned competitors into collaborators in central Ohio. Fischer Homes, which only recently began building in the area, has struck a deal with two local custom builders to expand its presence here. Bob Webb Builders and Truberry Group have joined forces with Fischer Homes of Cincinnati to build out 234 lots in six central Ohio locations that Bob Webb and Truberry already have established. The three builders also have agreed to co-develop home sites in the future.”
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