Headline News

Headline Story Highlights

“Going Mondo Condo” Washington Post. October 8. (Kirstin Downey)
“More than 47,000 new condominiums, in 322 separate projects, are coming onto the market in the next three years, according to real estate information firm Delta Associates. Many of those buildings promise to create new kinds of neighborhoods in areas that were not previously known as residential communities. At the end of September, there were 18,872 new condominium units for sale in the region, many that introduce new choices to long-established places, up from only 3,083 in the same month two years earlier.”
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“Slowing Is Seen in Housing Prices in Hot Markets.” NY Times. October 4. (David Leonhardt, Motoko Rich)
“A real estate slowdown that began in a handful of cities this summer has spread to almost every hot housing market in the country, including New York. More sellers are putting their homes on the market, houses are selling less quickly and prices are no longer increasing as rapidly as they were in the spring, according to local data and interviews with brokers.”

“Builder Confidence Returns To Pre-Katrina Level In October” N AHB. October 18.
“The HMI rose two points to 67 in October, returning to the same level it hit in August but still off the year’s cyclical high of 72, set this June. The gain marks an end to a three-month trend of downward movements.”
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“Empty Houses, Falling Prices: A Boom Dies” MSN Money October 3. (Bill Fleckenstein)
You can see how the housing bubble is bursting in places lik e Columbus, Ohio, where builders and lenders threw common sense away and enticed people to buy homes they couldn't afford.
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National, Regional and Local News

“A Big Competitor’s Entrance – National Builder KB Home is Battling with Local Firms for Projects Large and Small” Washington Post. October 17. (Michael S. Rosenwald)
“…when Los Angeles-based KB Home swooped in on the 180-acre propert y this summer as lead builder in a $137 million, 2,000-house deal, the region's home builders did not need to be told the ground underneath them had shifted. The nation's fifth- largest builder, with $7 billion in revenue last year, jolted the country's fastest-growing home-building market, setting the stage for even sharper battles between regional and national builders for a limited amount of land.”
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“Fed’s Lacker Say Does Not See U.S. Housing Bubble” Reuters. October 20.
"I discount the notion that there's a bubble in the housing market," Lacker said in answer to a question after speaking at Winthrop University. "It's pretty clear that the most rapid price increases are associated with larger metropolitan areas and it's the larger metropolitan areas in which it is most difficult ... to add to the supply of housing."

“Housing Market Slowed in Sept” Baltimore Sun. October 12. (June Arney)
“More homes [in the Baltimore area] are piling up on the market, outpacing sales, and prices are moderating, according to data from the Metropolitan Regional Information Systems Inc., a Rockville firm that tracks sales. While September normally sees some falloff, experts and Realtors say that fewer buyers in the market and more homes for sale are signs that the market is cooling, though they caution that it will take several more months for a trend to be clear.” 4,038 homes sold in September, which is the lowest level since April and down 15% from August. Sales increas ed 10% versus last year, with prices up 20%, but listings increased 29% from a year ago.

“Suburban housing falls short in Maryland” Baltimore Sun. October 12. (Jamie Smith Hopkins)
“Suburban Maryland has the smallest new-home supply of any major growth market in the country, a key reason prices are rising, a real estate analyst told business leaders yesterday… . Lot inventories in suburban Maryland are even tighter by historical standards. The area had a 6.5-month supply in the first quarter, and 16 to 18 months is typical nationally, he said. Only Southern California and Las Vegas had lower supplies of lots.”
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“Housing Market’s Madness Gets Dose of Reality” Orlando Sentinel. October 20. (Jack Snyder)
“Existing-home sales continued to sizzle in the Orlando area last month, but the median price dipped for the first time in a year, indicating that the buy-at-any-cost market may be over, local Realtors said Wednesday. The inventory of homes available for purchase in the Orlando area at the end of September was 6,786 -- the most since October 2003, when 7,308 properties were on the books. Properties are still selling quick ly, just not as quickly as before. The Realtors' latest report showed that the average time on the market for a home sold in September was 29 days, up from 27 days in August.”

“Housing Market Cools” Bakersfield Californian. October 17. (Misty Williams)
“Here's another sign that Bakersfield's housing market is cooling down and returning to more normal levels. R oughly 180 sellers have reduced the asking prices of their homes in the past seven days, according to a report released Monday. Six months ago there were few, if any, price reductions, said local appraiser Gary Crabtree, who compiled the numbers. People were receiving above and beyond their asking prices.”

Prices in County Not Likely to Sag, Industry Experts Say” San Diego Union Tribune. October 18. (Emmet Pierce and Roger M. Showley)
“Although the pace of sales [in the San Diego market] has slowed, there are no clear indications that overall prices are going to decline, real estate analysts say. Citing a shortage of dwellings, industry representatives continue to dismiss the notion of a bursting real estate price bubble. Bob Cummings, president of K. Hovnanian Homes San Diego, says the slowdown is seasonal and in k eeping with historical trends before the recent spike in prices.
"I fully expect things to pick up the first part of the year," he said. "People are reading too much into the San D iego slowdown."
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“Housing Bubble Unlikely in Texas” RIS Media & Houston Business Journal. October 11.
Citing factors such as employment gains, population growth and rising home prices, the Texas Association of Realtors has characterized the Texas real estate market as stable. "Based on demand and economic factors, there is virtually no risk of a housing bubble in Texas," says Lance Lacy, the group's chairman. "These market extremes we're hearing about in the media tend to occur on the East and West Coasts.”
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“Housing Market Continued to Cool in September” Sacramento Business Journal. October 19.
“Sacramento's housing market cooled some more in September, and the median price for resold homes dropped for the first time since August 2004, according to figures from the Sacramento Association of Realtors. September marked the fifth consecutive month of slowing sales, with new escrows down 19.8 percent from August and down 15.5 percent for the year through September, compared to the first nine months of 2004.”
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“More Sellers of High-End Homes Find They Must Cut Asking Prices” LA Times. October 20.
Data from a cross-section of more-affordable neighborhoods within Los Angeles and Orange counties — from Aliso Viejo to Valencia to Compton to Santa Ana — show that homes priced $500,000 and below were usually snapped up at full list price or more in the second quarter, according to a review of property listing data compiled for The Times by Brea-based research firm Real Data Strategies. On the other hand, sellers in many pricier neighborhoods in the two counties have dropped original list prices by an average of about 5% since the spring, the data showed.
Of the 165 houses currently on the mark et in Yorba Linda, for example, nearly 40% have had their prices reduced since hitting the listing service.

“Lenders Reduce Risky Mortgages that Drew Fed’s Ire” Baltimore Sun. October 16.
“Federal Reserve Chairman Alan Greenspan is turning up the volume on his warnings about the potential perils of certain risk y mortgages if the high-flying housing market loses significant altitude. There are signs some companies are getting the message. A few have begun sc aling back some types of those mortgages or making them less appealing by raising costs.”

“Gas and Oil Heating Costs to Soar This Winter – Increases Forecast as High as 48%” Washington Post. October 13. (Justin Blum)
Some of the most common types of fuel used for heating will cost households 32 to 48 percent more this winter than last year, according to the latest government forecast, released yesterday.
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“NAR’s Home Sales Forecast Looking Stronger” National Association of Realtors. October 12.
“Post-Katrina, our sales projections for this year have moved even higher,” Lereah said. “Short-term momentum is very strong, and our Pending Home Sales Index just set a record. In addition to the housing needs of hurricane victims, we may be seeing some ‘fence jumping’ from home buyers who are getting into the market before interests rates move higher.”
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“Housing Boom Raises Fraud Concerns” MSNBC October 11. (Associated Press) Banks, lenders and GSE’s such as Freddie Mac, have voiced concerns over the growing incidence of fraud in the residential mortgage business. “There is concern that a large number of mortgage scams that end up in defaults could be a rot in market for credit and mortgage-backed securities.”
“A wave of bad loans could increase borrowing costs for consumers, because investors will demand a higher yield from mortgage-backed securities in exchange for taking on the risk and banks would pass on the cost in the form of higher mortgage rates. New loan products that allow borrowers to get mortgages with less documentation about income and savings, so-called lo-doc or no-doc loans, inadvertently aid fraud.”
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“Big Land Buys Rising” Arizona Daily Star. October 11. (Joseph Barrios)
“Experts say the amount and frequency of multimillion dollar land buys is going up as home builders try to keep their long-term costs low and their business stable in the shadow of talk that housing markets could suddenly fall flat. The last time anybody saw such large buys was during the years before the S & L collapse in the late 1980s. But these buys are intended to be a hedge against rough financial times. The booming housing market has helped make it happen.”

“FDIC Head Warns of Mortgage Credit Losses Ahead” Reuters. October 18.
Donald Powell, chairman of the Federal Deposit Insurance Corp., warned residential mortgage lenders to “be prepared for an increase in credit losses as interest rates rise and pull the reins on a years-long boom in the U.S. housing market. ‘Credit losses are very low now, but mortgage lenders need to be prepared for higher losses,’ Powell said in comments prepared for the conference. Powell said bank regulators are evaluating the risk to lenders, and would issue guidance where appropriate.”

“Boom or Bubble.” Bergen Record. October 16. (Prashant Gopal)
“How long can the boom last.” This article discusses many factors that have driven the soaring real estate prices across the nation, and what is at stake for homeowners and the overall economy.
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“Report Asks: What Trouble, Housing Bubble.” Las Vegas R eview Journal. October 11. (Hubble Smith)
“A report released last month by Fabian and Josh Lewis, first vice president at Santa Ana, Calif.-based Stearns Lending, shows that people with risky mortgages, no equit y, big debt and no savings may be at risk of losing their homes if and when a housing mark et correction becomes reality.” This article discusses a number of risk factors including flippers, interest only, negative amortization, and ARM mortgage products, and declining affordability.
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“Home Builders' Stock Sales: Diversifying or Bailing Out.” NY Times. October 4. (Julie Creswell)
“Executives and directors at many of the nation's largest development companies sold stock at a record pace this summer. Home builders say the stock sales are not a signal that they believe the property boom is waning. Instead, most executives said that they were selling because they needed to diversify their personal wealth. Some outsiders are not so sure.”
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“Federal Mortgage Tax Cap Could Slam Florida Homeowners” Ft Lauderdale Sun Sentinel. October 13. (Harriet Johnson Brackey)

This article summarizes the impact that a proposed cap on mortgage interest tax deductions would have on South Florida homeowners and how the deduction slash may affect the housing market.

“Lennar Florida Market Not So Sunny” TheStreet.com. October 13. (Nicholas Yulico)
“In red-hot housing markets around the country, most homebuilders have enacted strict anti-flipping clauses to deter speculators from buying in their new communities. Now, Lennar, one of the country's largest builders, has quietly taken the unusual move of dropping the restrictions at several of its South Florida developments. Local brokers say the decision shows just how much Lennar needs the flippers to keep order numbers up at certain communities.”
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“Stewart, KB Home Unite on Housing Project” Washington Post. October 13. (Anne D'Innocenzio)
“Martha Stewart Living Omnimedia, Inc. and KB Home, one of the nation's largest home builders, announced Wednesday that they are teaming up to build a line of new houses that are inspired by the domestic queen's three homes in New York and Maine. The first jointly designed community, to be named KB H ome Twin Lakes: Homes Created with Martha Stewart, will feature about 650 homes in Cary, N.C., the biggest suburb of Raleigh, the companies said in a news release. Model homes, which will come in eight different variations, are scheduled to be completed in early 2006.

“Builders Think Outside Boundary” Miami Herald. October 13. (Matthew Haggman)
“Emboldened developers are now flocking in increasing numbers to the far reaches of Miami-Dade with new confidence that they can persuade county leaders to allow development outside the [development] boundary, or UDB, despite a host of environmental and other concerns about the march of sprawl.”

“EEOC Seeks $4 mil for ex-Lennar Workers in Age-Bias Case” Arizona Republic. October 6. (C raig Harris)
“A federal judge has given the U.S. Equal Employment Opportunity Commission the green light to pursue an age-discrimination suit against Lennar Homes of Arizona, a prominent Valley home builder. The EEOC is seeking $4 million in back pay and damages for five sales consultants, all 55 or older, who said they were laid off or dismissed because of their ages.”

“Bay Area's Builders, Remodelers Struggle with Higher Material Prices” San Mateo County Times. October 10. (Eve Mitchell)
This article discusses the rising costs of raw materials and the effect it is having on Bay Area builders. Alan Nevin, chief economist for the California Building Industry Association, does not believe that most builders will be able to “pass on those costs to consumers at a time when California's red-hot housing market is starting to cool off.”

“Pulte to Develop Red Rock” Arizona Daily Star. October 1. (Joseph Barrios)
Pulte Homes closed a deal to purchase more than 1,000 acres in southern Pinal Count y, AZ and build up to 3,964 homes there.
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“Builders Vow to Save Home Loan Tax Break” USA Today. October 12. (Sue Kirchhoff and Kathy Chu)
“Home builders vowed to fight any attempt to eliminate tax preferences for homeownership. But several economists said a federal commission's plan to trim mortgage interest deductibility was needed to address broad market distortions.”

“Luxury Lofts Rising in Westside” Los Angeles Times. October 18. (Martha Groves)
“In a gritt y area of L.A. next to Marina del Rey, 800 upscale residential units are planned. It's part of a trend toward higher-density living. Residential developers say this transformation represents a desirable neighborhood's natural progression, given the strong demand for Westside housing. The 800 units — being built by John Laing Homes, Standard Pacific Homes, Kahan's California Landmark Development and others — will range in price from the $400,000s to about $1 million.
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“New Homebuilder Expands to New Mexico” New Mexico Business Weekly. October 19. “Beazer Homes has landed in New Mexico with its first community, Los Antepasados, underway at Corregidor and Sunset Gardens on the Westside with 42 lots. Its next community will be Tesoro at Rancho Grande, located at Gibson and Unser boulevards with 177 lots. Kurt Stark, formerly with the company in Indiana, has been named New Mexico division president. Beazer expanded to N ew Mexico for several reasons, say company officials. These include the area's unique culture, a perfect climate and its growth potential. Beazer plans to open several communities throughout New Mexico within the next year.”
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“Mortgage Industry Profits Drop, MBA Cost Study Says” Mortgage Bankers Association. October 12.
“Mortgage banking production profits fell to $657 per loan in 2004 from $1,272 per loan in 2003 according to the Mortgage Bankers Association’s (MBA) annual cost study. As volume declined in 2004, per-loan operational costs increased and were only partially offset by increases in secondary marketing income, including servicing values.”

“Get Set For More Land Auctions” Newszap.com. October 12.
“Two Desert Ridge properties located between 56th and 64th streets will be auctioned off in the next two months: 502-acre superblock 1S north of Deer Valley Drive and 288- acre superblock 2 north of Loop 101.”

“Builders Don’t Fear Glut in Lee” news-press.com. October 12.
“Developers of high-rise condominiums elsewhere in Lee County say they aren't worried about a possible glut in high-rise development.”

“Price of Vacant Land Skyrockets – Average Cost of One Acre in Southern Nevada Exceeds $600,000” In Business – Las Vegas. October 01.
“Vacant land cost an average of $601,600 an acre during the second quarter -- an 88 percent increase when compared with the second quarter of 2004, Applied Analysis reported.” This article highlights several of the notable land transactions and overviews the reason for such price appreciations.

“Bloggers Attaining Celebrity for Housing Bubble Punditry” San Diego.com. September 29. (Mike Freeman).
“For Rich Toscano, the most surreal moment in his tenure as housing-bubble blogger came when a Money magazine reporter called to discuss the San Diego market. "He said, 'I just got off the phone with (Nobel Prize-winning economist) Milton Friedman. He wasn't too helpful. Now I'm calling you,' " Toscano recalled.

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