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.
Macro Impact, And Will The Housing Slump Cause A Recession?
- Lenders’ Belt-Tightening Stifles Growth in Economy (NY Times, Nov. 29th): "Federal Reserve: The combined value of two leading sources of credit — outstanding commercial and industrial bank loans, and short-term loans known as commercial paper — peaked at about $3.3 trillion in August. By mid-November, such credit was down to $3T, a drop of nearly 9%. Not once in the years since the Fed began tracking such numbers in 1973 has this artery of finance constricted so rapidly. Smaller declines preceded three recessions going back to 1975... Wednesday, the Fed’s vice chairman, Donald L. Kohn, said that the latest market turbulence appeared to be reducing credit to businesses and consumers, hinting that the central bank, in response, was prepared to cut interest rates further."
- Commercial Credit Dropping at Fastest Rate Since 1973 (Naked Capitalism, Nov. 29th): "The [above NY Times] article [suggests] that the Fed may cut rates to address the [credit] problem. While that is accurate, it is unlikely that a rate cut, or even quite a few cuts, will change the psychology of lending officers. When defaults start to rise, banks tighten their lending criteria, and they tend not to loosen them again until the economy show signs of strengthening. Thus a rate reduction is unlikely to do much for the small businesses interviewed in this story."
- Area Lumber Companies Pinched By Housing Downturn (Chicago Daily Herald, Nov. 29th) Illinois: "The nation's second largest lumberyard chain, Stock Building Supply, laid off 5,000 workers in the last year... Local lumberyards report the 52% downturn in suburban Chicago new home sales is clamping down on them and forcing layoffs. And they are struggling as they face rising health and facilities insurance, slowing home starts and falling lumber prices... "The effect on the lumber industry may be exacerbated more than 52%," said Tracy Cross, owner of Tracy Cross & Associates, a real estate consulting and research firm. "Developers aren't building more homes, they are selling off inventory (homes built but not sold)."
- Beige Book Sees 'Depressed' Housing, No Turnaround Until Late Next Year (Wall St. Journal, Nov. 28th): "Fed Beige Book: The U.S. housing sector remains "quite depressed" with a turnaround not foreseen by builders until late 2008 at the earliest... Inflation remains under wraps when food and energy prices are stripped out, the Fed added, suggesting officials have the flexibility to lower rates when they meet next month -- an outcome that appears more likely following remarks earlier Wednesday by Fed Vice Chairman Donald Kohn. "Demand for residential real estate remained quite depressed, with only a few tentative and scattered signs of stabilization amidst the ongoing slowdown."
- When Housing Falls Can Autos Be Far Behind? (Trader Mark in Seeking Alpha, Nov. 27th): "Plans to purchase a new home fell to 2.5% of respondents, its lowest level since June 1994, only a tenth of a percentage point above the lowest level seen since 1983. (not good, but not a surprise - again in early innings of multi year contraction in housing) Plans to purchase a new car were even worse, with only 4.7% of respondents planning to buy a car, a tenth of a percentage point above a 40-year low. This reinforces the recent pattern in car sales, which have weak all year. (bad, and getting worse.)"
Tracking the Housing Market and Homebuilder Stocks
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.