Continue Reading December 15th, 2008
The Los Angeles Times today has a fascinating story about a housing development in Lancaster, a Mojave desert community north of Los Angeles, where the homes don’t have adequate water.
The developer, big New Jersey-based home builder K. Hovnanian, once planned hundreds of homes there, but stopped at 35. Now Hovnanian and the county are pointing fingers at who’s responsible for the lack of a basic necessity. Homeowners are suing, and defaulting.
Yet another sign of how crazy things got in the boom years.
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Continue Reading December 15th, 2008
The Justice Dept. announced today that Gary Ray the former head of human resources at KB Home has pleaded guilty to obstruction of justice for tyring to cover up an options backdating scandal at the big home builder.
KB’s former chairman and ceo Bruce Karatz agreed to pay $7 million in penalties in September for what the Securities and Exchange Commission said was scheme to award stock options retroactively based on the lowest price the stock had traded at.
According to today’s press release: “Ray has admitted that he and the CEO agreed that they would collaborate in causing KB’s general counsel to prepare and to submit a false and misleading report on KB’s historical option granting practices to KB’s Audit Committee and other KB managers, who relied on the false report in making disclosure decisions with respect to required SEC filings.”
Ray faces a maximum sentence of five years in prison.
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Continue Reading December 15th, 2008
Homebuilders’ confidence remained at an all-time low in December as worsening economic conditions weighed on the housing market, a trade group said Monday.
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Continue Reading December 15th, 2008
The real estate Web site Zillow.com reports today that American home values fell by $2 trillion in 2008.
“This year marked the acceleration of the market correction, and is likely to end with the eighth consecutive quarter of declines in home values,” said Dr. Stan Humphries, Zillow’s vice president of data and analytics. “In general, homeowners in most areas we cover are struggling with foreclosures pouring into the market, large amounts of negative equity and dropping home values. On the positive side, in the third quarter, some markets – particularly those hit hardest in the downturn – showed smaller year-over-year declines than in the prior quarter. Our optimism here, though, must be tempered by the knowledge that the larger economic problems that emerged in the fourth quarter will likely further challenge the real estate market.”
Only thirty of the 163 metropolitan statistical areas covered by Zillow showed gains over the first three quarters of the year. Jacksonville, N.C. led with year-over-year appreciation of 4.9%.
Other cities performing well included Winston-Salem, N.C. and Anderson, S.C. with increases of 4.1% and 3.5%.
The biggest loser: Stockton, Calif. with home values sliding 32% percent year-over-year. Merced, Calif. followed with values down 31%.
If you’re looking for a bottom Humphries says look for at least three consecutive quarters of improving year-over-year change in home values. Several markets, including the San Francisco, Atlanta and St. Louis regions, showed slight deceleration in declines from the second quarter to the third quarter.
Also look for
· Declining foreclosure rates.
· Increases in sales volume.
· And the amount for-sale inventory declining.
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Continue Reading December 15th, 2008
Capmark Finance Inc. arranged $60 million in floating-rate financing for dry and cold storage facilities located at the Port Carteret Industrial Complex in Carteret, N.J.
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