"None of these foreclosed houses is going to disappear. After a foreclosure, one family moves out, and another moves in. We see the sad faces of the people moving out, but we don't as often see the happy faces of the new homeowners moving in. Nevertheless, those happy faces are out there, and we should not discount them." (Slate, Mar. 3rd)
Foreclosure Data
U.S. Mortgage Foreclosures Rise as Owners 'Give Up'. "Mortgage Bankers Association: U.S. mortgage foreclosures rose to an all-time high at the end of 2007 as borrowers with adjustable-rate loans walked away from properties before their payments increased. New foreclosures jumped to 0.83% of all home loans in Q4'07 from 0.54% a year earlier. Late payments rose to a 23-year high. Jay Brinkmann, MBA VP of research and economics: About 40% of all foreclosures are homeowners with prime or subprime loans who couldn't make their payments before the reset. Another 23% are borrowers who received some form of loan modification, typically a freezing or reduction of their rate, and then default." (Bloomberg, Mar. 6th
Report: Minorities Hit by Foreclosures. "Report released Thursday by an alliance of policy, research and advocacy organizations: Subprime lenders that went out of business with the industry's collapse targeted minority neighborhoods, leaving them to struggle disproportionately with foreclosures and crumbling home values. These companies' high-risk loans made up 20% of all loans in predominantly minority communities, compared with 4% of total loans in mostly white areas... The study analyzed the geographic operating patterns of 35 high-risk lenders that... went bankrupt, were closed or sold in 2007 [and] focused on lending to minority urban markets in New York, Los Angeles, Chicago, Boston, Cleveland, Charlotte, N.C., and Rochester, N.Y." (AP via Chron.com, Mar. 6th)
Big Foreclosures Close Quietly. California: "A $74 million loan to Irvine-based developer SunCal Cos. for a major housing project in Shafter was foreclosed on Wednesday morning at a public auction... Opening bids for the site started at $10 million. No one made an offer, so the property went back to Lennar (LEN). Two other would-be residential development sites were also foreclosed on at Wednesday’s auction. A pair of Wasco properties... went back to lender Investment Grade Loans Inc. after no one answered the opening bid call at $100,000 apiece. About 77 acres at Gromer and Magnolia avenues and 75 acres near Palm and Filburn avenues carried about $4.2M in debt." (Bakersfield Californian, Mar. 5th)
Bob Toll: Issue is Confidence. Toll Brothers CEO Robert Toll: "Federal officials may be overconfident that the level of foreclosures is manageable. He said officials have told him privately that of the $1.5 trillion in mortgages that have gone bad, only $300 billion will ultimately foreclosure. "They tell me that $300 billion is a manageable number, but my opinion is that if we don't have some serious intervention on the part of the Treasury, Federal Reserve, and Congress, the risk could be greater than we recognize," Toll concluded." (Builder Online, Mar .5th)
Bernanke Call for Mortgage Forgiveness Puts Pressure on Paulson. "Treasury Secretary Henry Paulson may need to revise his strategy for stemming record U.S. home foreclosures after Federal Reserve Chairman Ben S. Bernanke urged lenders to forgive portions of some loans. Bernanke's call, in a speech yesterday to bankers in Orlando, Florida, went beyond a Paulson-backed plan that focuses on renegotiating interest rates. With his remarks, the Fed chief joined the heads of the Office of Thrift Supervision and Federal Deposit Insurance Corp. and congressional Democrats in proposing stronger actions than Paulson to alleviate the worst housing recession in a quarter century." (Bloomberg, Mar. 5th)
Foreclosure-Proof Homeowners. Florida: "There is currently an 8-10 month wait to get a court date to have a foreclosure filing heard in Dade and Broward counties. Bankers have non-performing loans on their books to the best heeled borrowers in multi-million dollar amounts with no immediate means for recovery; with a non-secured second mortgage in place, there is no possibility for a "short sale" that will satisfy all of the borrower's debt... Banks do not want to spend the $50,000 required to... foreclosure and clear the title -- only to put the house back on the market for a deeper loss afterwards...These [homeowners] are... living cost free!" (Barry Ritholtz in Seeking Alpha, Mar. 5th)
Bernanke Urges Banks to Forgive Portion of Mortgages. "Federal Reserve Chairman Ben S. Bernanke, battling the worst housing recession in a quarter century, urged lenders to forgive portions of mortgages held by homeowners at risk of defaulting. "Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done,'' Bernanke said Tuesday. Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure.'' (Bloomberg, Mar. 4th)
NYC Foreclosures On The Rise. "Manhattan Real Estate has been rock solid throughout the entire Housing mess. But I was a little surprised to see how much pressure the rest of the city has been under. Chart: Foreclosures, 5 Boroughs NYC." (Barry Ritholtz in Seeking Alpha, Mar. 4th)
Foreclosure Storm Forces Court To Extend Hours In St. Lucie County. The civil division of the St. Lucie County Circuit Court is adding a night shift to handle a huge backlog of home foreclosure filings... Clerk of Courts Edwin M. Fry Jr.: "The case load has become just horrendous... Going back to 2005, we typically would have 40 to 45 foreclosures filed in a month. This January, we had 715 foreclosure cases filed. It's just killing us." Fry said staffers in the circuit court's civil division have been working Saturdays for the past four months to try to get on top of the case load, "but we can't keep up." (TC Palm, Mar. 3rd)
Get Seeking Alpha's housing market coverage by email -- it's free and takes only seconds to sign up.
Monday, March 10, 2008
Friday, March 7, 2008
When will the Homebuilding and Housing Industry Turnaround?
From the Chicago tribune today:
The housing industry could see a turnaround before the end of this year, but only if Congress takes action beyond the current economic stimulus plan, and the credit markets stabilize, the head of the National Association of Home Builders said here Friday.Overhaul of federal agencies responsible for the housing industry has been on hold for five years, and action is needed quickly, said Jerry Howard, CEO of the builders' group."There has been a lot of finger-pointing, but action has been too slow," he said. "Current regulation has been dysfunctional and has been too slow to help the industry."Action is needed on an overhaul of the Federal Housing Authority and on regulation of Fannie Mae and Freddie Mac, the two private, government-backed firms that provide a lion's share of mortgage financing, according to Howard.He said a much-needed element for turning around the housing industry would be a tax credit of perhaps $10,000 for buyers of a new home. This could be aimed at first-time buyers, or it could be more broadly based, Howard said. In some cases, the tax credit could be as much as $15,000.A similar step taken in 1975-1976, during the administration of President Gerald Ford, helped the country out of a recession at that time, he said. That tax credit was for $1,000. Howard spoke with members of the Tribune's editorial board, telling them that the housing industry is in a recession that is affecting all parts of the economy."Home building traditionally is the first sector to go into a recession, but it is also the first to come out," he said.The housing industry could recover before the end of 2008, provided that the rest of the economy doesn't tumble into a recession, Howard said. Currently, builders are faced with about 10 months worth of unsold homes."The housing downturn is affecting lumber mills and a wide range of manufacturers, and the situation for builders is dire," Howard said. Part of the problem, admittedly, was caused by overbuilding, he added.But additional blame should go to poor regulation of mortgage lenders, some of whom made predatory loans that have tumbled into foreclosure, Howard said. Additional blame should go to appraisers who overvalued properties, and mortgage brokers, who encouraged consumers to take inappopriate loans. As part of the current government stimulus plan, conforming loan limits for mortgages were raised above $417,000 for houses in California, Florida and other high-price areas. But the limit was unchanged for the Chicago area. That is hurting buyers who are looking at homes priced in a range of $500,000 or more, analysts said.Locally, sales of new homes have fallen by about two-thirds, "but by summer we will be through the worst of the situation here," said Peter Schwartz, chief executive officer of the Home Builders Association of Greater Chicago, who also attended the session.A harsh winter and late spring have hurt sales, he said, but builders are poised for a rebound.
The housing industry could see a turnaround before the end of this year, but only if Congress takes action beyond the current economic stimulus plan, and the credit markets stabilize, the head of the National Association of Home Builders said here Friday.Overhaul of federal agencies responsible for the housing industry has been on hold for five years, and action is needed quickly, said Jerry Howard, CEO of the builders' group."There has been a lot of finger-pointing, but action has been too slow," he said. "Current regulation has been dysfunctional and has been too slow to help the industry."Action is needed on an overhaul of the Federal Housing Authority and on regulation of Fannie Mae and Freddie Mac, the two private, government-backed firms that provide a lion's share of mortgage financing, according to Howard.He said a much-needed element for turning around the housing industry would be a tax credit of perhaps $10,000 for buyers of a new home. This could be aimed at first-time buyers, or it could be more broadly based, Howard said. In some cases, the tax credit could be as much as $15,000.A similar step taken in 1975-1976, during the administration of President Gerald Ford, helped the country out of a recession at that time, he said. That tax credit was for $1,000. Howard spoke with members of the Tribune's editorial board, telling them that the housing industry is in a recession that is affecting all parts of the economy."Home building traditionally is the first sector to go into a recession, but it is also the first to come out," he said.The housing industry could recover before the end of 2008, provided that the rest of the economy doesn't tumble into a recession, Howard said. Currently, builders are faced with about 10 months worth of unsold homes."The housing downturn is affecting lumber mills and a wide range of manufacturers, and the situation for builders is dire," Howard said. Part of the problem, admittedly, was caused by overbuilding, he added.But additional blame should go to poor regulation of mortgage lenders, some of whom made predatory loans that have tumbled into foreclosure, Howard said. Additional blame should go to appraisers who overvalued properties, and mortgage brokers, who encouraged consumers to take inappopriate loans. As part of the current government stimulus plan, conforming loan limits for mortgages were raised above $417,000 for houses in California, Florida and other high-price areas. But the limit was unchanged for the Chicago area. That is hurting buyers who are looking at homes priced in a range of $500,000 or more, analysts said.Locally, sales of new homes have fallen by about two-thirds, "but by summer we will be through the worst of the situation here," said Peter Schwartz, chief executive officer of the Home Builders Association of Greater Chicago, who also attended the session.A harsh winter and late spring have hurt sales, he said, but builders are poised for a rebound.
Wednesday, February 27, 2008
Orlando Housing Continues to Decline
Just saw an article in the Orlando Sentinel...ouch...
In more bad news for the beleaguered housing industry, sales of new homes fell in January for a third straight month, pushing activity down to the slowest pace in nearly 13 years. The median price of a new home dropped to the lowest level in more than three years.The Commerce Department reported Wednesday that new home sales fell by 2.8 percent last month to a seasonally adjusted annual rate of 588,000 units, the slowest pace since February 1995.The median price of a new home dropped to $216,000 in January, down 4.3 percent from the December median sales price, the point where half the homes sold for more and half for less. That was the lowest median price since September 2004 and underscored that the steep slide in housing is still under way.Analysts believe that housing activity has further to fall as a tidal wave of mortgage foreclosures is dumping more unsold homes on an already glutted market. For January, the inventory of unsold homes dropped but since the pace of sales activity slowed as well, the number of months it would take to exhaust the current inventory rose to 9.9 months, the longest period in more than 26 years.Until this inventory backlog is worked down further, economists are predicting more declines in prices in the months ahead.The 2.8 percent drop in new home sales in January followed even bigger declines of 4 percent in December and 13.1 in November and represented weakness in every part of the country except the West, which saw sales increase by 2.2 percent.Sales fell by 10.3 percent in the Northeast and dropped by 7.6 percent in the Midwest and 2.4 percent in the South.Earlier this week, a real estate trade group reported that sales of existing homes had fallen by 0.4 percent in January, pushing existing home sales down to a seasonally adjusted annual rate of 4.89 million units, the weakest showing on records going back to 1999.Median prices for existing homes dropped to $201,100, down 4.6 percent from a year ago, while the inventory of unsold existing homes rose to 10.3 months' supply, just below the two-decade high of 10.5 months hit in October.Analysts forecast further price declines until the inventory levels are worked down further. However, a rising tide of mortgage foreclosures is pushing even more unsold homes onto the glutted market and financial institutions have tightened lending standards since a credit crisis hit with full force last August, making it harder for prospective buyers to qualify for loans.The weakness in housing has spread to the rest of the economy, raising the prospects the country could fall into a full-blown recession. The country is being battered by the prolonged slump in housing, a serious credit squeeze and soaring energy prices.In another sign of trouble, the Commerce Department reported Wednesday that orders to U.S. factories for big-ticket manufactured goods plunged in January by the largest amount in five months, an indication that manufacturers are being caught in the weakness engulfing the rest of the economy.The 5.3 percent drop in new orders last month reflected declines across a wide swath of industry from commercial aircraft and autos to heavy machinery and computers.A growing number of analysts believe the economy will slip into a recession this quarter although they expect the downturn to be short and mild, thanks to aggressive interest rate cuts from the Federal Reserve and a $168 billion economic stimulus package passed by Congress earlier this month. Millions of households will begin seeing rebate checks in May that should give the economy a boost starting this summer.The overall economy skidded to a barely discernible growth rate of 0.6 percent in the final three months of last year and many analysts believe that the gross domestic product may turn negative in the current quarter and the second quarter this year, meeting the classic definition of a recession as consumers, whose confidence levels have plunged to the lowest levels in five years, cut back on spending.The 5.3 percent decline in durable goods for January was the first setback since October and was the biggest decline since a similar 5.3 percent drop last August.The weakness was led by a 13.4 percent decrease in orders for transportation equipment, which reflected a 30.5 percent plunge in demand for commercial aircraft, a very volatile category, and a 0.8 percent fall in demand for motor vehicles and parts. It was the second straight drop in autos and underscored the problems facing domestic automakers as they struggle with weak demand in the face of surging gasoline prices and plunging consumer confidence.The new durable goods report showed that a key indicator of business investment dropped in January by the largest amount in three months. Orders for non-defense capital goods excluding aircraft, considered a good proxy for business investment, fell by 1.4 percent last month.
In more bad news for the beleaguered housing industry, sales of new homes fell in January for a third straight month, pushing activity down to the slowest pace in nearly 13 years. The median price of a new home dropped to the lowest level in more than three years.The Commerce Department reported Wednesday that new home sales fell by 2.8 percent last month to a seasonally adjusted annual rate of 588,000 units, the slowest pace since February 1995.The median price of a new home dropped to $216,000 in January, down 4.3 percent from the December median sales price, the point where half the homes sold for more and half for less. That was the lowest median price since September 2004 and underscored that the steep slide in housing is still under way.Analysts believe that housing activity has further to fall as a tidal wave of mortgage foreclosures is dumping more unsold homes on an already glutted market. For January, the inventory of unsold homes dropped but since the pace of sales activity slowed as well, the number of months it would take to exhaust the current inventory rose to 9.9 months, the longest period in more than 26 years.Until this inventory backlog is worked down further, economists are predicting more declines in prices in the months ahead.The 2.8 percent drop in new home sales in January followed even bigger declines of 4 percent in December and 13.1 in November and represented weakness in every part of the country except the West, which saw sales increase by 2.2 percent.Sales fell by 10.3 percent in the Northeast and dropped by 7.6 percent in the Midwest and 2.4 percent in the South.Earlier this week, a real estate trade group reported that sales of existing homes had fallen by 0.4 percent in January, pushing existing home sales down to a seasonally adjusted annual rate of 4.89 million units, the weakest showing on records going back to 1999.Median prices for existing homes dropped to $201,100, down 4.6 percent from a year ago, while the inventory of unsold existing homes rose to 10.3 months' supply, just below the two-decade high of 10.5 months hit in October.Analysts forecast further price declines until the inventory levels are worked down further. However, a rising tide of mortgage foreclosures is pushing even more unsold homes onto the glutted market and financial institutions have tightened lending standards since a credit crisis hit with full force last August, making it harder for prospective buyers to qualify for loans.The weakness in housing has spread to the rest of the economy, raising the prospects the country could fall into a full-blown recession. The country is being battered by the prolonged slump in housing, a serious credit squeeze and soaring energy prices.In another sign of trouble, the Commerce Department reported Wednesday that orders to U.S. factories for big-ticket manufactured goods plunged in January by the largest amount in five months, an indication that manufacturers are being caught in the weakness engulfing the rest of the economy.The 5.3 percent drop in new orders last month reflected declines across a wide swath of industry from commercial aircraft and autos to heavy machinery and computers.A growing number of analysts believe the economy will slip into a recession this quarter although they expect the downturn to be short and mild, thanks to aggressive interest rate cuts from the Federal Reserve and a $168 billion economic stimulus package passed by Congress earlier this month. Millions of households will begin seeing rebate checks in May that should give the economy a boost starting this summer.The overall economy skidded to a barely discernible growth rate of 0.6 percent in the final three months of last year and many analysts believe that the gross domestic product may turn negative in the current quarter and the second quarter this year, meeting the classic definition of a recession as consumers, whose confidence levels have plunged to the lowest levels in five years, cut back on spending.The 5.3 percent decline in durable goods for January was the first setback since October and was the biggest decline since a similar 5.3 percent drop last August.The weakness was led by a 13.4 percent decrease in orders for transportation equipment, which reflected a 30.5 percent plunge in demand for commercial aircraft, a very volatile category, and a 0.8 percent fall in demand for motor vehicles and parts. It was the second straight drop in autos and underscored the problems facing domestic automakers as they struggle with weak demand in the face of surging gasoline prices and plunging consumer confidence.The new durable goods report showed that a key indicator of business investment dropped in January by the largest amount in three months. Orders for non-defense capital goods excluding aircraft, considered a good proxy for business investment, fell by 1.4 percent last month.
Thursday, January 31, 2008
Beazer Homes Leaving Charlotte Market?
Beazer has built hundreds of homes around Charlotte, but now the Atlanta based builder may be closing all of its operations here.
Beazer was the target of a federal lawsuit claiming sales agents falsified documents to help buyers get homes. Homes that some buyers couldn't afford.
Many of those homes ended up in foreclosure.
WBTV's Melissa Hankins has been following the Mortgage Meltdownand brings us this report.
Press "PLAY" for the complete story.
You may also remember Beazer homes from the dozens of stories we did about its relationship with the Coffee Cup restaurant.
Beazer owned the land where the historic restaurant was located. On Clarkson Street, just outside of Center City.
After years of fighting to remove the Coffee Cup so Beazer could build, the restaurant finally moved on its own. Now, it looks like the big progress the Coffee Cup was fighting may be stopped completely.
Beazer pulls out of charlotte, beazer homes charlotte, beezer, beezer charlotte, beazer closing down Charlotte Coffee Cup Restaurant
Beazer was the target of a federal lawsuit claiming sales agents falsified documents to help buyers get homes. Homes that some buyers couldn't afford.
Many of those homes ended up in foreclosure.
WBTV's Melissa Hankins has been following the Mortgage Meltdownand brings us this report.
Press "PLAY" for the complete story.
You may also remember Beazer homes from the dozens of stories we did about its relationship with the Coffee Cup restaurant.
Beazer owned the land where the historic restaurant was located. On Clarkson Street, just outside of Center City.
After years of fighting to remove the Coffee Cup so Beazer could build, the restaurant finally moved on its own. Now, it looks like the big progress the Coffee Cup was fighting may be stopped completely.
Beazer pulls out of charlotte, beazer homes charlotte, beezer, beezer charlotte, beazer closing down Charlotte Coffee Cup Restaurant
Tuesday, January 22, 2008
Mercedes Homes (Melbourne, Florida) Layoffs and Implosion Continues - Headquarters for Sale
Anyone want to but an office building? Mercedes Homes' brand new shiny headquarters is for sale. The remaining troops moved into the top two floors of a building they mistakenly built just a year ago and now don't fill half of.
Tuesday, January 8, 2008
Homebuilders Stocks Tumble further - KB, WCI, Centex, Pulte Report Losses
Homebuilder stocks tumbled Tuesday after KB Home reported a $773 million quarterly loss and new data showed pending home sales fell more than expected in November.
KB Home's fourth-quarter loss resulted from ongoing weak demand and plummeting margins, as land impairment charges and tax expenses came in higher than analysts projected.
KB Home shares were down 8.6% to $16.89 in midday trading, hitting a 52-week low Other builders tumbled on the reports as well, with Meritage Homesdropping 11.9% to $10.11 -- also a 52-week low -- and WCI Communities falling 8.8% to $3.34.
KB Home's quarterly loss amounted to $9.99 a share, compared with a loss of $49.6 million, or 64 cents a share, a year earlier. Analysts expected a loss of $1.08 a share.
The Los Angeles-based builder said revenue fell 31% to $2 billion, reflecting the ongoing difficulties of getting buyers to close on their new home purchases. KB Home also said 2008 will be "another tough year" for the homebuilding industry.
Also on Tuesday, the National Association of Realtors said its pending home sales index fell 2.6% in November from October -- worse than the 0.5% decline that economists expected, according to Reuters estimates. The index measures contracts of existing home sales.
"The disappointing data show that record levels of home inventories will take a while to burn off, which means that homebuilders may have to cut prices even further to sell homes.
We expect further modest declines in pending sales in the coming months as buyers continue to wait for home prices to bottom, although further price cuts should begin to lure some buyers off the sidelines," Bank of America analyst Daniel Oppenheim said in a research note.
KB Home's bottom line was slammed by $403 million of land impairment charges. The company also recorded a $373.7 million income tax expense, even though the company lost money on a generally accepted accounting principles basis.
This charge mostly relates to a reserve allowance against KB Home's deferred tax assets -- meaning the company must create an accounting entry to allow for the chance that it cannot carry unused tax deductions into the future.
"The inventory impairment charges we incurred during the housing downturn have produced substantial deferred tax assets," KB Home CEO Jeffrey Mezger said. "To the extent that we generate sufficient taxable income in the future to utilize the tax benefits of the related deferred tax assets, we expect to see a reduction in our effective tax rate as the valuation allowance is reversed."
The company's new orders in the quarter fell 32% to 2,574 units. The cancellation rate on previous orders measured 58% -- the same level as a year ago, but up from 50% in the third quarter.
KB Home's fourth-quarter loss resulted from ongoing weak demand and plummeting margins, as land impairment charges and tax expenses came in higher than analysts projected.
KB Home shares were down 8.6% to $16.89 in midday trading, hitting a 52-week low Other builders tumbled on the reports as well, with Meritage Homesdropping 11.9% to $10.11 -- also a 52-week low -- and WCI Communities falling 8.8% to $3.34.
KB Home's quarterly loss amounted to $9.99 a share, compared with a loss of $49.6 million, or 64 cents a share, a year earlier. Analysts expected a loss of $1.08 a share.
The Los Angeles-based builder said revenue fell 31% to $2 billion, reflecting the ongoing difficulties of getting buyers to close on their new home purchases. KB Home also said 2008 will be "another tough year" for the homebuilding industry.
Also on Tuesday, the National Association of Realtors said its pending home sales index fell 2.6% in November from October -- worse than the 0.5% decline that economists expected, according to Reuters estimates. The index measures contracts of existing home sales.
"The disappointing data show that record levels of home inventories will take a while to burn off, which means that homebuilders may have to cut prices even further to sell homes.
We expect further modest declines in pending sales in the coming months as buyers continue to wait for home prices to bottom, although further price cuts should begin to lure some buyers off the sidelines," Bank of America analyst Daniel Oppenheim said in a research note.
KB Home's bottom line was slammed by $403 million of land impairment charges. The company also recorded a $373.7 million income tax expense, even though the company lost money on a generally accepted accounting principles basis.
This charge mostly relates to a reserve allowance against KB Home's deferred tax assets -- meaning the company must create an accounting entry to allow for the chance that it cannot carry unused tax deductions into the future.
"The inventory impairment charges we incurred during the housing downturn have produced substantial deferred tax assets," KB Home CEO Jeffrey Mezger said. "To the extent that we generate sufficient taxable income in the future to utilize the tax benefits of the related deferred tax assets, we expect to see a reduction in our effective tax rate as the valuation allowance is reversed."
The company's new orders in the quarter fell 32% to 2,574 units. The cancellation rate on previous orders measured 58% -- the same level as a year ago, but up from 50% in the third quarter.
Sunday, December 16, 2007
More Homebuilder Layoffs in Las Vegas - Toll Brothers and more
As Las Vegas homebuilders continue to slash prices and cut back on construction because of soft demand, companies are continuing to trim staff levels.
In the past four to six weeks, several builders have pared their staff once again in the latest round of layoffs that started about 14 months ago.
Beazer Homes cut its staff nationally by 25 percent and that reduction was felt in its Las Vegas offices. Pageantry Homes and Woodside Homes also made cuts, said Dennis Smith, president of Home Builders Research. Richmond American Homes, Astoria, Centex, KB Home, Pulte Homes, Celebrate, Rhodes, Ryland, Distinctive, Engle, Meritage and Lennar have also recently cut staff.
Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association, said she has heard of more layoffs in recent weeks.
"We are still coming down from the boom, and the numbers are slow," Caruso said. "It's just a function of the lack of sales activity."
The number of home closings are down 44 percent for the year. Permits are down 25 percent.
Builders have been tight-lipped about the details of cutbacks in their offices.
Smith said some area developers, title companies and lenders have made cuts as well.
"I had someone tell me ... they were referring to today (Nov. 30) as Black Friday," Smith says of First American Title.
What gets overlooked, Smith said, is the job losses in related industries, such as concrete, associated with homebuilding. The one industry not affected is appraisers. They are swamped, Smith said.
Staffing cuts at Toll Bros.: A November issue of Big Builder magazine that was placed on inside billboards at a housing conference last week in Las Vegas featured Gary Mayo, the group president in Nevada for Toll Bros. He says that since January, his staff has dropped from 348 to 174, a 50 percent reduction in three rounds of layoffs.
The layoffs are in line with the company's home closings in 2007, which are down about 50 percent from the 368 closed in 2006. The company indicates 2008 may even be bleaker.
"We won't cut back on the sticks and bricks, and the land cost is what it is, so the only area I can look at is doing it with few but better people," Mayo said.
Unlike most companies, Mayo said that rather than trim mid- or upper-level managers with heftier compensation, he's kept people who have been with him for 10 to 12 years. That method saves less money, but the managers have to juggle more responsibility with the cutbacks, he said.
"Land acquisition is almost nonexistent, but we have shifted their focus into production housing to preserve them," Mayo said. "I have vice presidents all the way up to division managers who are out in the field again — now running one, two or three communities as well as maintaining what their day job was before. It breeds loyalty with these guys. They know that as long as they are willing to take a step back, we're willing to continue to hold on to them."
Mayo said Toll Bros. is in a different position than most public builders. It uses incentives but won't sell homes at any cost.
"I do need to generate enough cash flow to pay the bills, but I don't need to do it at a loss. So you're going to see us with much less market share than we have had over the last 12 months ? and we are ready for that. When things pick up, I will just need to hire some construction managers, and I'll be ready to go again."
In other news:
LaPour Corporate Center has received the Leadership in Energy and Environmental Design silver core and shell precertification from the U.S. Green Building Council. The $19 million, three-story 70,000-square-foot office building was precertified based on its submission.
TWC Construction has started work on a project for Blackstone Capital Group. The Durango Centennial Retail Center is valued at $6.5 million for site improvements and the shell. It consists of four one-story buildings totaling 72,000 square feet and has underground parking at the corner of Durango Drive and Centennial Parkway. The project is slated to be finished in the third quarter of 2008. The Blackstone Retail Center on Fort Apache Road is scheduled to open in July.
Smith reports 51 apartment conversions closed escrow in October. That brings the year's total to 1,569, which is a year-to-year decrease of 3,410 units or 69 percent. Closings of conversion units have declined steadily in 2007 because of tightening mortgage credit, Smith said.
Title One Las Vegas, a title and escrow company, has made organization changes and additions designed to combat the slow residential market and service the commercial sector, it said. The company has named a new president, Norma Spaeth, and created private-client services, a new business unit under newly appointed Vice President Angelina Galindo. Guyon Long has also been appointed senior vice president/assistant county manager. Spaeth has previously worked as executive vice president for Equity Title of Nevada. Galindo previously served as vice president of special projects and a senior escrow officer with Chicago Title.
R/S Development has signed up to participate in the Green Building Partnership program of the Southern Nevada Home Builders Association. R/S is building green homes in its Kingswood Crown Series in Summerlin at Interstate 215 and Charleston Boulevard and at the Alpian Meadows at Mountain's Edge. The company plans to build 182 homes. For more information, go to www.rsdev.com. Model homes built by Pulte Homes in the Timbercreek subdivision in northwest Las Vegas are the first homes to achieve certification as green-built homes under the program. The model homes meet the program's requirements for resource, energy and water efficiency and indoor environmental air quality.
An 11-building multitenant office complex in Las Vegas has been purchased for $24.8 million by Koll/PER, a limited liability company owned by the Koll Co. of Newport Beach, Calif., and the Public Employee Retirement System of Idaho. Koll Canyon Plaza, formerly called Trident Business Park, consists of 103,345 square feet of office and retail space on eight acres on the south side of Sahara Avenue, west of North Buffalo Drive. The seven-year-old office park was purchased from Trident Development, which was represented by Grubb & Ellis. Koll represented itself. It's the fourth Las Vegas area acquisition by the group in the last two years.
Gavin Maloof, co-owner of the Sacramento Kings and brother of Palms owner George Maloof, sold his 5,499-square-foot home on Innisbrook Avenue for $2.2 million. The buyer was the Douglas Unger Trust.
Arte Nathan, the retired human resources boss with Wynn Resorts, sold his 5,304-square-foot home on Grouse Street for $1.3 million. The buyer was Paragon Relocation Resources.
In the past four to six weeks, several builders have pared their staff once again in the latest round of layoffs that started about 14 months ago.
Beazer Homes cut its staff nationally by 25 percent and that reduction was felt in its Las Vegas offices. Pageantry Homes and Woodside Homes also made cuts, said Dennis Smith, president of Home Builders Research. Richmond American Homes, Astoria, Centex, KB Home, Pulte Homes, Celebrate, Rhodes, Ryland, Distinctive, Engle, Meritage and Lennar have also recently cut staff.
Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association, said she has heard of more layoffs in recent weeks.
"We are still coming down from the boom, and the numbers are slow," Caruso said. "It's just a function of the lack of sales activity."
The number of home closings are down 44 percent for the year. Permits are down 25 percent.
Builders have been tight-lipped about the details of cutbacks in their offices.
Smith said some area developers, title companies and lenders have made cuts as well.
"I had someone tell me ... they were referring to today (Nov. 30) as Black Friday," Smith says of First American Title.
What gets overlooked, Smith said, is the job losses in related industries, such as concrete, associated with homebuilding. The one industry not affected is appraisers. They are swamped, Smith said.
Staffing cuts at Toll Bros.: A November issue of Big Builder magazine that was placed on inside billboards at a housing conference last week in Las Vegas featured Gary Mayo, the group president in Nevada for Toll Bros. He says that since January, his staff has dropped from 348 to 174, a 50 percent reduction in three rounds of layoffs.
The layoffs are in line with the company's home closings in 2007, which are down about 50 percent from the 368 closed in 2006. The company indicates 2008 may even be bleaker.
"We won't cut back on the sticks and bricks, and the land cost is what it is, so the only area I can look at is doing it with few but better people," Mayo said.
Unlike most companies, Mayo said that rather than trim mid- or upper-level managers with heftier compensation, he's kept people who have been with him for 10 to 12 years. That method saves less money, but the managers have to juggle more responsibility with the cutbacks, he said.
"Land acquisition is almost nonexistent, but we have shifted their focus into production housing to preserve them," Mayo said. "I have vice presidents all the way up to division managers who are out in the field again — now running one, two or three communities as well as maintaining what their day job was before. It breeds loyalty with these guys. They know that as long as they are willing to take a step back, we're willing to continue to hold on to them."
Mayo said Toll Bros. is in a different position than most public builders. It uses incentives but won't sell homes at any cost.
"I do need to generate enough cash flow to pay the bills, but I don't need to do it at a loss. So you're going to see us with much less market share than we have had over the last 12 months ? and we are ready for that. When things pick up, I will just need to hire some construction managers, and I'll be ready to go again."
In other news:
LaPour Corporate Center has received the Leadership in Energy and Environmental Design silver core and shell precertification from the U.S. Green Building Council. The $19 million, three-story 70,000-square-foot office building was precertified based on its submission.
TWC Construction has started work on a project for Blackstone Capital Group. The Durango Centennial Retail Center is valued at $6.5 million for site improvements and the shell. It consists of four one-story buildings totaling 72,000 square feet and has underground parking at the corner of Durango Drive and Centennial Parkway. The project is slated to be finished in the third quarter of 2008. The Blackstone Retail Center on Fort Apache Road is scheduled to open in July.
Smith reports 51 apartment conversions closed escrow in October. That brings the year's total to 1,569, which is a year-to-year decrease of 3,410 units or 69 percent. Closings of conversion units have declined steadily in 2007 because of tightening mortgage credit, Smith said.
Title One Las Vegas, a title and escrow company, has made organization changes and additions designed to combat the slow residential market and service the commercial sector, it said. The company has named a new president, Norma Spaeth, and created private-client services, a new business unit under newly appointed Vice President Angelina Galindo. Guyon Long has also been appointed senior vice president/assistant county manager. Spaeth has previously worked as executive vice president for Equity Title of Nevada. Galindo previously served as vice president of special projects and a senior escrow officer with Chicago Title.
R/S Development has signed up to participate in the Green Building Partnership program of the Southern Nevada Home Builders Association. R/S is building green homes in its Kingswood Crown Series in Summerlin at Interstate 215 and Charleston Boulevard and at the Alpian Meadows at Mountain's Edge. The company plans to build 182 homes. For more information, go to www.rsdev.com. Model homes built by Pulte Homes in the Timbercreek subdivision in northwest Las Vegas are the first homes to achieve certification as green-built homes under the program. The model homes meet the program's requirements for resource, energy and water efficiency and indoor environmental air quality.
An 11-building multitenant office complex in Las Vegas has been purchased for $24.8 million by Koll/PER, a limited liability company owned by the Koll Co. of Newport Beach, Calif., and the Public Employee Retirement System of Idaho. Koll Canyon Plaza, formerly called Trident Business Park, consists of 103,345 square feet of office and retail space on eight acres on the south side of Sahara Avenue, west of North Buffalo Drive. The seven-year-old office park was purchased from Trident Development, which was represented by Grubb & Ellis. Koll represented itself. It's the fourth Las Vegas area acquisition by the group in the last two years.
Gavin Maloof, co-owner of the Sacramento Kings and brother of Palms owner George Maloof, sold his 5,499-square-foot home on Innisbrook Avenue for $2.2 million. The buyer was the Douglas Unger Trust.
Arte Nathan, the retired human resources boss with Wynn Resorts, sold his 5,304-square-foot home on Grouse Street for $1.3 million. The buyer was Paragon Relocation Resources.
Wednesday, December 12, 2007
Lennar Dumps Thousands of Lots in FLorida - 8,300 To be Exact
Lennar has sold nearly 8,300 home sites in Pasco, Hillsborough, Polk, Sarasota, Lee, DeSoto and Brevard counties to Metro Development Group.
The purchase - which was completed on Friday for undisclosed terms - was part of "long-range acquisition strategies developed" by the company, said Rob Ahrens, spokesman for Tampa-based Metro Development. The deal increases Metro's land inventory by nearly 40 percent, and brings the company's total land holdings to 30,000 home sites.
"We have tremendous confidence in Florida and the resiliency of the state's residential real estate market," Ahrens said in a release. "We know that current concerns about homebuilding will be resolved in the coming months, and when they are, we plan to be a major player in providing finished home sites to builders who will need them."
The purchases include 3,905 home sites covering 1,700 acres at Epperson Ranch in Pasco County, 530 home sites on 140 acres at Waterleaf in Hillsborough County, 393 home sites on 94 acres at Leomas Landing in Polk County, and 98 home sites on 41 acres in Sarasota County.
Lennar (NYSE: LEN) was looking to convert many of its land holdings to cash in the midst of the slowdown in the housing market, Ahrens said.
Also Friday, Lennar partnered with Morgan Stanley Real Estate Fund II LP, an affiliate of Morgan Stanley & Co. (NYSE: MS), to form a new corporation, MSR Holding Co., according to documents filed by Lennar with the Securities and Exchange Commission. Lennar then sold more than 11,000 home sites from 32 communities located throughout the country to MSR for $525 million, half of the reported net book value of $1.3 billion.
MSR was designed to "acquire, develop, manage and sell residential real estate," according to documents filed with the SEC.
It was unclear if the 8,300 home sites sold to Metro Development the same day MSR was announced were related.
"The combined expertise and resources provided by the Lennar/Morgan Stanley team will allow us to maximize the value of this portfolio and provide a footprint to capitalize on inefficiencies in today's residential real estate market," said Stuart Miller, president and chief executive officer of Miami-based Lennar Corp., in the filing. "This transaction provides us with increased liquidity and flexibility at an opportune time."
Lennar had a homebuilding operating loss of $787.7 million in the third quarter, which resulted in an overall loss of $513.9 million, or $3.25 a share, on revenue of $2.3 billion, according to documents filed with the SEC. That was down from the $206.7 million, or $1.30 a share, the company earned on revenue of $3.9 billion for the same period in 2006.
Metro Development has offices in Orlando and Jacksonville, and last year generated sales of $200 million.
Lennar shares closed up 44 cents to $16.25. The 52-week high was $56.54 on Feb. 2. The 52-week low was $14 on Nov. 27.
The purchase - which was completed on Friday for undisclosed terms - was part of "long-range acquisition strategies developed" by the company, said Rob Ahrens, spokesman for Tampa-based Metro Development. The deal increases Metro's land inventory by nearly 40 percent, and brings the company's total land holdings to 30,000 home sites.
"We have tremendous confidence in Florida and the resiliency of the state's residential real estate market," Ahrens said in a release. "We know that current concerns about homebuilding will be resolved in the coming months, and when they are, we plan to be a major player in providing finished home sites to builders who will need them."
The purchases include 3,905 home sites covering 1,700 acres at Epperson Ranch in Pasco County, 530 home sites on 140 acres at Waterleaf in Hillsborough County, 393 home sites on 94 acres at Leomas Landing in Polk County, and 98 home sites on 41 acres in Sarasota County.
Lennar (NYSE: LEN) was looking to convert many of its land holdings to cash in the midst of the slowdown in the housing market, Ahrens said.
Also Friday, Lennar partnered with Morgan Stanley Real Estate Fund II LP, an affiliate of Morgan Stanley & Co. (NYSE: MS), to form a new corporation, MSR Holding Co., according to documents filed by Lennar with the Securities and Exchange Commission. Lennar then sold more than 11,000 home sites from 32 communities located throughout the country to MSR for $525 million, half of the reported net book value of $1.3 billion.
MSR was designed to "acquire, develop, manage and sell residential real estate," according to documents filed with the SEC.
It was unclear if the 8,300 home sites sold to Metro Development the same day MSR was announced were related.
"The combined expertise and resources provided by the Lennar/Morgan Stanley team will allow us to maximize the value of this portfolio and provide a footprint to capitalize on inefficiencies in today's residential real estate market," said Stuart Miller, president and chief executive officer of Miami-based Lennar Corp., in the filing. "This transaction provides us with increased liquidity and flexibility at an opportune time."
Lennar had a homebuilding operating loss of $787.7 million in the third quarter, which resulted in an overall loss of $513.9 million, or $3.25 a share, on revenue of $2.3 billion, according to documents filed with the SEC. That was down from the $206.7 million, or $1.30 a share, the company earned on revenue of $3.9 billion for the same period in 2006.
Metro Development has offices in Orlando and Jacksonville, and last year generated sales of $200 million.
Lennar shares closed up 44 cents to $16.25. The 52-week high was $56.54 on Feb. 2. The 52-week low was $14 on Nov. 27.
Monday, December 10, 2007
Homebuilder Decline Continues - New Home Prices Falling - Record Foreclosures - Housing Slump Gets Worse
From Dan Dorfman NY Sun - Today
Sad to say, it's becoming increasingly clear that the national housing picture has turned much more gory than anyone might have imagined; likewise, repeated Wall Street forecasts that a meaningful housing rebound will kick off by mid-2008 appear to have little or no legitimacy.
Some housing industry experts suggest the implications are ominous, that the worsening housing slump will accelerate the likelihood of a recession despite a rise in the number of working Americans, and will play havoc with the stock market.
Taking note of the growing number of negative housing stories appearing on TV and in newspapers, a veteran real estate developer, Robert Sheridan, tells me: "The press, unlike Wall Street, is finally getting the message. Housing is not in a slump, but in a deepening recession that has at least another two to four years to run; it's also in the midst of a serious readjustment of prices."
He figures that the readjustment will eventually see prices of single-family homes plummet 10% to 20% and condominiums tumble 20% to 40%. "The picture is getting darker and darker by the day," he says. "Turning around housing will be like turning around a battleship."
Further, the CEO of Chicago-based Robert Sheridan & Partners, who has been developing homes around the country since 1975, says he believes it will take another year or two before the mortgage market stabilizes. He also sees at least 2 million foreclosures over the next two years.
Ridiculing repeated Wall Street forecasts of a second-half turnaround in 2008, Mr. Sheridan argues: "They're dead wrong; the forecasters must be smoking something."
The latest worrisome housing trends and figures strongly indicate the Street may indeed be way too euphoric about an impending recovery. In brief:
• Amid slowing housing demand, a near record 4.45 million existing homes are on the market, versus roughly 2.5 million in the late 1990s.
• Foreclosure filings are ballooning. There were 224,451 forclosures in October, up 94% from October 2006.
• New home prices last month fell 13% from year-earlier levels, the biggest drop since 1970, while the median price of existing homes dropped 5.1%, the single largest monthly decline ever.
• A recent Federal Reserve study shows a record 40.8% of lenders have tightened their lending standards on prime mortgages, which should further depress housing sales.
• At the end of September, about 6% of mortgage borrowers were behind in their payments, according to the Mortgage Bankers Association. That's up from 4.6% a year earlier, and it's the worst reading since 1986.
• Record Foreclosures - A record 0.78% of all American mortgages entered foreclosure in the September quarter, and the overall foreclosure rate jumped to 1.69%, the highest since 1982.
• Estimates are making the rounds that over the next year new home prices will drop 13%, while existing home prices will fall 15%.
Reflecting these developments, investment adviser Michael Larson, a dogged housing industry tracker, concludes that the housing downturn has at least another year to go and could easily spill over into 2009. As a result, he sees further sales weakness and at least another 5% to 10% decline in home prices. "I think the sellers are finally getting the message and cutting prices," he says.
He takes a dim view of the government's plan to ease the crisis by freezing rates on subprime mortgages. "That's no panacea, certainly not a cure-all," Mr. Larson, associate editor of the Safe Money Report, a monthly newsletter in Jupiter, Fla., says. "It's difficult to see how you're going to get everyone on the same page," he observes, referring to such participants as the developer, banker, investor, and those who service the mortgage. "You have to get a lot of parties to agree to a freeze; it won't be easy." He further notes that 40% to 60% of homeowners whose loans are modified eventually still default.
Some smaller homebuilders have already filed for bankruptcy, and Mr. Larsen looks for more of the same from the larger publicly owned ranks. In particular, he points to Standard Pacific and Beazer Homes. His newsletter has already expressed similar sentiments about troubled Countrywide Financial, the country's largest mortgage lender.
Making matters worse, the mortgage and housing crises, Mr. Larson says, could cost investors and banks some $400 billion from write-downs and losses on mortgage-related securities. He further cites estimated total losses to household wealth of between $2 trillion and $4 trillion.
It all sounds pretty ugly, but our two housing bears see an even uglier tone, with both telling me "the worst is yet to come."
Sad to say, it's becoming increasingly clear that the national housing picture has turned much more gory than anyone might have imagined; likewise, repeated Wall Street forecasts that a meaningful housing rebound will kick off by mid-2008 appear to have little or no legitimacy.
Some housing industry experts suggest the implications are ominous, that the worsening housing slump will accelerate the likelihood of a recession despite a rise in the number of working Americans, and will play havoc with the stock market.
Taking note of the growing number of negative housing stories appearing on TV and in newspapers, a veteran real estate developer, Robert Sheridan, tells me: "The press, unlike Wall Street, is finally getting the message. Housing is not in a slump, but in a deepening recession that has at least another two to four years to run; it's also in the midst of a serious readjustment of prices."
He figures that the readjustment will eventually see prices of single-family homes plummet 10% to 20% and condominiums tumble 20% to 40%. "The picture is getting darker and darker by the day," he says. "Turning around housing will be like turning around a battleship."
Further, the CEO of Chicago-based Robert Sheridan & Partners, who has been developing homes around the country since 1975, says he believes it will take another year or two before the mortgage market stabilizes. He also sees at least 2 million foreclosures over the next two years.
Ridiculing repeated Wall Street forecasts of a second-half turnaround in 2008, Mr. Sheridan argues: "They're dead wrong; the forecasters must be smoking something."
The latest worrisome housing trends and figures strongly indicate the Street may indeed be way too euphoric about an impending recovery. In brief:
• Amid slowing housing demand, a near record 4.45 million existing homes are on the market, versus roughly 2.5 million in the late 1990s.
• Foreclosure filings are ballooning. There were 224,451 forclosures in October, up 94% from October 2006.
• New home prices last month fell 13% from year-earlier levels, the biggest drop since 1970, while the median price of existing homes dropped 5.1%, the single largest monthly decline ever.
• A recent Federal Reserve study shows a record 40.8% of lenders have tightened their lending standards on prime mortgages, which should further depress housing sales.
• At the end of September, about 6% of mortgage borrowers were behind in their payments, according to the Mortgage Bankers Association. That's up from 4.6% a year earlier, and it's the worst reading since 1986.
• Record Foreclosures - A record 0.78% of all American mortgages entered foreclosure in the September quarter, and the overall foreclosure rate jumped to 1.69%, the highest since 1982.
• Estimates are making the rounds that over the next year new home prices will drop 13%, while existing home prices will fall 15%.
Reflecting these developments, investment adviser Michael Larson, a dogged housing industry tracker, concludes that the housing downturn has at least another year to go and could easily spill over into 2009. As a result, he sees further sales weakness and at least another 5% to 10% decline in home prices. "I think the sellers are finally getting the message and cutting prices," he says.
He takes a dim view of the government's plan to ease the crisis by freezing rates on subprime mortgages. "That's no panacea, certainly not a cure-all," Mr. Larson, associate editor of the Safe Money Report, a monthly newsletter in Jupiter, Fla., says. "It's difficult to see how you're going to get everyone on the same page," he observes, referring to such participants as the developer, banker, investor, and those who service the mortgage. "You have to get a lot of parties to agree to a freeze; it won't be easy." He further notes that 40% to 60% of homeowners whose loans are modified eventually still default.
Some smaller homebuilders have already filed for bankruptcy, and Mr. Larsen looks for more of the same from the larger publicly owned ranks. In particular, he points to Standard Pacific and Beazer Homes. His newsletter has already expressed similar sentiments about troubled Countrywide Financial, the country's largest mortgage lender.
Making matters worse, the mortgage and housing crises, Mr. Larson says, could cost investors and banks some $400 billion from write-downs and losses on mortgage-related securities. He further cites estimated total losses to household wealth of between $2 trillion and $4 trillion.
It all sounds pretty ugly, but our two housing bears see an even uglier tone, with both telling me "the worst is yet to come."
Thursday, November 29, 2007
RW Hertel and Sons - California Builder - Fraud and more
Anyone have any solid info on this..most of what I see is consumer complaints, etc. Not alot from reputable sources. Sounds like they have done some covering up, etc.
From The Central Coast Housing Bubble Blog:
Comments include:
"Here is a SLO case # CV 050606 against RW Hertel for Fraud, Grand Theft, etc... he first tried to sue his own buyers for reporting the homes Leak and Have MOLD the judge ruled under the Anti-SLAPP against Hertel now Hertel is facing not only massive civil judgments for Fraud and Theft but trying to cover up defective homes and lying about it a story is being written in a Major Magazine on Hertel later this summer I got interviewed recently and it is going to be very revealing against Hertel many of his former and two current employee's have been interviewed the two current ones are quitting just before the story goes to Print and the State is again investigating him for FRAUD and LOAN SCAMS."
From ComplaintsBoard.com:
"Home Builder, RW Hertel & Sons of san Luis Obispo, CA built our home in the rancho Obispo Development today I learned most the homes have massive defects with Leaks, and TOXIC MOLD, my neighbor at 1720 Singletree Ct has Smith & Sons MOLD people at her home all day I asked what for and..."
"RW Hertel has been a lying crook for the last 5 years I have know him and his company. He has always cheated the buyer's SO BUYER BEWARE if you get a RW Hertel Home they are a Horrible Mess every project and home in Rancho Obispo is a total mess. The State Inspectors said they are the ..."
"RW Hertel what a fraud and lying scamer, MOLD again in Rancho Obispo this morning I noticed many and I mean many MOLD Trucks from SERVPO at 1708 Farrier Ct. when I asked what is happening, knowing the development has been declared a disaster zone from defective homes.."
"RW Hertel SCAMS Low income owners, more defective homes, more criminal investigations FRAUD, CON ARTIST, Housing RIP OFFS, SCAMS now i learned up in Dublin, CA at the Low Income housing of ARROYO VISTA RW Hertel tried to sneak into building low income homes but HUD discovered Hertel has lied and cheated far too many owners. That all the low income homes built in RANCHO OBISPO, down in San Luis Obispo are leaking have Mold and are NOT built to code so once more development he is a major suspect in trying to Fraud the Government and the poor low income people."
It goes on and on...someone let me know if they have info.
From The Central Coast Housing Bubble Blog:
Comments include:
"Here is a SLO case # CV 050606 against RW Hertel for Fraud, Grand Theft, etc... he first tried to sue his own buyers for reporting the homes Leak and Have MOLD the judge ruled under the Anti-SLAPP against Hertel now Hertel is facing not only massive civil judgments for Fraud and Theft but trying to cover up defective homes and lying about it a story is being written in a Major Magazine on Hertel later this summer I got interviewed recently and it is going to be very revealing against Hertel many of his former and two current employee's have been interviewed the two current ones are quitting just before the story goes to Print and the State is again investigating him for FRAUD and LOAN SCAMS."
"Hertel going Bankrupt will NOT protect his or his partners assets he is now investing in Eagle Point Oregon and the Authorities in Oregon and Utah and elsewhere are working with State Contractors Board investigator and the IRS on his many scams. Sorry to learn so many got screwed by Hertel's cheap and Crappy homes but hang tough help is on the horizon and it will take some time but I suspect Federal Prison is in his future."
"Sounds like the same as RW Hertel & Sons who has built the most defective homes in SLO in the cities History I am told Hertel is on the Bankrupt track as well. As a well known Fraud Builder Hertel is doomed"
From ComplaintsBoard.com:
"Home Builder, RW Hertel & Sons of san Luis Obispo, CA built our home in the rancho Obispo Development today I learned most the homes have massive defects with Leaks, and TOXIC MOLD, my neighbor at 1720 Singletree Ct has Smith & Sons MOLD people at her home all day I asked what for and..."
"RW Hertel has been a lying crook for the last 5 years I have know him and his company. He has always cheated the buyer's SO BUYER BEWARE if you get a RW Hertel Home they are a Horrible Mess every project and home in Rancho Obispo is a total mess. The State Inspectors said they are the ..."
"RW Hertel what a fraud and lying scamer, MOLD again in Rancho Obispo this morning I noticed many and I mean many MOLD Trucks from SERVPO at 1708 Farrier Ct. when I asked what is happening, knowing the development has been declared a disaster zone from defective homes.."
"RW Hertel SCAMS Low income owners, more defective homes, more criminal investigations FRAUD, CON ARTIST, Housing RIP OFFS, SCAMS now i learned up in Dublin, CA at the Low Income housing of ARROYO VISTA RW Hertel tried to sneak into building low income homes but HUD discovered Hertel has lied and cheated far too many owners. That all the low income homes built in RANCHO OBISPO, down in San Luis Obispo are leaking have Mold and are NOT built to code so once more development he is a major suspect in trying to Fraud the Government and the poor low income people."
It goes on and on...someone let me know if they have info.
Wednesday, November 28, 2007
Building Market is Rough - Homebuilder (Global Homes) in Port St. Lucie Turns to Drugs and Kiddie Porn
PORT ST. LUCIE — A Port St. Lucie home building company (Global Home) sits at the center of a marijuana grow house investigation that led authorities to raid 18 St. Lucie County homes this morning and seize 420 pounds of marijuana and 400 plants, officials announced in a press conference.
Authorities arrested 10 people, including the owner of Global Homes, and uncovered 10 indoor marijuana farms during pre-dawn raids Tuesday morning, officials said.
They also said they confiscated $57,000 cash, 38 grams of cocaine, 4 guns, 9 cars and a boat.
Authorities said Global Homes had an interest in several of the homes raided Tuesday morning, although they would not elaborate on the home builder's involvement.
Officials said only that the arrangement bore similarities to previous busts in which immigrants were offered homes on the condition that they operate an indoor pot farm for some period of time. The investigation began in September and involved eight agencies - state, local and federal, officials said.
UPDATE -
Port St. Lucie police seized 420 pounds of marijuana and 400 marijuana plants during an 18 home grow house raid in St. Lucie County Tuesday morning.
Investigators arrested 10 people in the raid, including the owner of Global Homes, a home building company that police said has connections to several houses in the case.
Detectives would not comment on what they believe the company's involvement was with the grow houses, but they did say that the case was similar to previous busts in which immigrants were offered homes as long as they operated an indoor marijuana farm for a period of time.
"We believe that there is a connection between Global Homes and Global Homes employees and these grow operations," said Deputy Chief Garry Wilson with the St. Lucie County Sheriff's Office.
Wilson said police seized about $57,000, 38 grams of cocaine, nine cars, four guns and a boat during the raids. Police said the investigation began in September and involved 80 law enforement officers spanning eight different agencies including state, local and federal departments. Authorities said that the case is still under investigation and that the charges being considered are much more than just drug charges.
"Besides mortgage fraud, we're looking at potential child pornography charges and a number of other issues," said Chief John Skinner with the Port St. Lucie Police Department.
Ooops, I would say between Global Homes drug bust, kiddie porn and mortgage fraud they might be in just a wee-tiny bit of trouble!!
Authorities arrested 10 people, including the owner of Global Homes, and uncovered 10 indoor marijuana farms during pre-dawn raids Tuesday morning, officials said.
They also said they confiscated $57,000 cash, 38 grams of cocaine, 4 guns, 9 cars and a boat.
Authorities said Global Homes had an interest in several of the homes raided Tuesday morning, although they would not elaborate on the home builder's involvement.
Officials said only that the arrangement bore similarities to previous busts in which immigrants were offered homes on the condition that they operate an indoor pot farm for some period of time. The investigation began in September and involved eight agencies - state, local and federal, officials said.
UPDATE -
Port St. Lucie police seized 420 pounds of marijuana and 400 marijuana plants during an 18 home grow house raid in St. Lucie County Tuesday morning.
Investigators arrested 10 people in the raid, including the owner of Global Homes, a home building company that police said has connections to several houses in the case.
Detectives would not comment on what they believe the company's involvement was with the grow houses, but they did say that the case was similar to previous busts in which immigrants were offered homes as long as they operated an indoor marijuana farm for a period of time.
"We believe that there is a connection between Global Homes and Global Homes employees and these grow operations," said Deputy Chief Garry Wilson with the St. Lucie County Sheriff's Office.
Wilson said police seized about $57,000, 38 grams of cocaine, nine cars, four guns and a boat during the raids. Police said the investigation began in September and involved 80 law enforement officers spanning eight different agencies including state, local and federal departments. Authorities said that the case is still under investigation and that the charges being considered are much more than just drug charges.
"Besides mortgage fraud, we're looking at potential child pornography charges and a number of other issues," said Chief John Skinner with the Port St. Lucie Police Department.
Ooops, I would say between Global Homes drug bust, kiddie porn and mortgage fraud they might be in just a wee-tiny bit of trouble!!
Monday, November 26, 2007
Homebuilders DownFall Hurts Commercial Real Estate Too - WCI, Divosta Empty Offices
Woes touch commercial real estate (From Palm Beach Post Staff Writer By Jeff Ostrowski)
The commercial real estate market largely has shrugged off the housing market's woes, but that happy trend might not last forever.
With builders and mortgage companies downsizing and in some cases going broke, there's suddenly a lot of empty office and industrial space coming on the market.
For instance, DiVosta Building Corp.'s former industrial complex in Palm Beach Gardens now is available for lease. The downsizing company last week sold five buildings totaling nearly 100,000 square feet, and Asset Specialists Inc. of West Palm Beach is marketing the space.
DiVosta isn't the only builder adding space to the market. Bonita Springs-based WCI Communities has announced layoffs, and Grubb & Ellis is subleasing about 26,000 square feet of offices in Broward and Palm Beach Counties that WCI no longer needs. That includes 3,800 square feet in Palm Beach County, said Owen Sagar, senior vice president at Grubb & Ellis in Boca Raton.
And Mercedes Homes is selling a 5-acre truss-manufacturing plant in Delray Beach. Sagar sees such sales as evidence that the residential downturn is hurting the commercial market.
"We're definitely starting to see the slowdown," Sagar says.
It's not just the builders that are adding space to the market. HomeBanc Mortgage Corp. went broke this year, and First NLC Financial Services announced layoffs soon after moving from Deerfield Beach to Boca Raton - and before it found a taker for its Deerfield offices.
With the dollar marked down to fire-sale prices, foreign investors should be swooping in to buy Palm Beach County's commercial properties on the cheap, right? Not exactly.
Foreign investors have been selling more than they've been buying, even as the greenback has plummeted in value against the pound, the euro and the Canadian loonie.
True, GLL Real Estate Partners of Munich, Germany, in September paid $180.2 million for the Legacy Place shopping center in Palm Beach Gardens, and a German group in August paid $37.25 million for Wellington Green Square on Forest Hill Boulevard.
But GLL in May sold the office building at 3601 PGA Blvd. for $21 million to an American investor.
Other foreign sellers: Hans Vogler, a German who in June sold 537 acres at Florida Research Park for $162 million; Siemens AG, the German telecom giant that in July sold land and offices in Boca Raton for $37 million; and Canadian investor Murray Dalfen, who got $37.7 million for the Boynton Commerce Center last month.
All three sales were to American investors. But Manuel de Zárraga, executive managing director at Holliday Fenoglio Fowler in Coral Gables, reads nothing more into those sales than simple profit-taking.
"They're harvesting some pretty big gains," he said.
While foreign investors have been flocking to Florida to buy vacation homes and iPods, buyers of commercial real estate tend to focus on a property's income stream, not on the discount provided by a weak yield, said Bob Sullivan of RJS Realty in West Palm Beach.
"Real estate is a very different commodity," Sullivan said. "You're buying a yield."
The commercial real estate market largely has shrugged off the housing market's woes, but that happy trend might not last forever.
With builders and mortgage companies downsizing and in some cases going broke, there's suddenly a lot of empty office and industrial space coming on the market.
For instance, DiVosta Building Corp.'s former industrial complex in Palm Beach Gardens now is available for lease. The downsizing company last week sold five buildings totaling nearly 100,000 square feet, and Asset Specialists Inc. of West Palm Beach is marketing the space.
DiVosta isn't the only builder adding space to the market. Bonita Springs-based WCI Communities has announced layoffs, and Grubb & Ellis is subleasing about 26,000 square feet of offices in Broward and Palm Beach Counties that WCI no longer needs. That includes 3,800 square feet in Palm Beach County, said Owen Sagar, senior vice president at Grubb & Ellis in Boca Raton.
And Mercedes Homes is selling a 5-acre truss-manufacturing plant in Delray Beach. Sagar sees such sales as evidence that the residential downturn is hurting the commercial market.
"We're definitely starting to see the slowdown," Sagar says.
It's not just the builders that are adding space to the market. HomeBanc Mortgage Corp. went broke this year, and First NLC Financial Services announced layoffs soon after moving from Deerfield Beach to Boca Raton - and before it found a taker for its Deerfield offices.
With the dollar marked down to fire-sale prices, foreign investors should be swooping in to buy Palm Beach County's commercial properties on the cheap, right? Not exactly.
Foreign investors have been selling more than they've been buying, even as the greenback has plummeted in value against the pound, the euro and the Canadian loonie.
True, GLL Real Estate Partners of Munich, Germany, in September paid $180.2 million for the Legacy Place shopping center in Palm Beach Gardens, and a German group in August paid $37.25 million for Wellington Green Square on Forest Hill Boulevard.
But GLL in May sold the office building at 3601 PGA Blvd. for $21 million to an American investor.
Other foreign sellers: Hans Vogler, a German who in June sold 537 acres at Florida Research Park for $162 million; Siemens AG, the German telecom giant that in July sold land and offices in Boca Raton for $37 million; and Canadian investor Murray Dalfen, who got $37.7 million for the Boynton Commerce Center last month.
All three sales were to American investors. But Manuel de Zárraga, executive managing director at Holliday Fenoglio Fowler in Coral Gables, reads nothing more into those sales than simple profit-taking.
"They're harvesting some pretty big gains," he said.
While foreign investors have been flocking to Florida to buy vacation homes and iPods, buyers of commercial real estate tend to focus on a property's income stream, not on the discount provided by a weak yield, said Bob Sullivan of RJS Realty in West Palm Beach.
"Real estate is a very different commodity," Sullivan said. "You're buying a yield."
Friday, November 23, 2007
Bottom Line for Hombuyers is Price - KNOCK OFF THE PROMOTIONS!
Raffles, festive balloons, open houses, car giveaways. Will any of these incentives sell houses? Not at the moment.
You don't have to be particularly creative in a market glutted with homes. The painful reality is that homes are commodities. There are more than 4 million of them out there unsold and more coming on the market every day due to foreclosures. If you really need to sell, price is the one lever that will move a property.
Buyers are waiting for prices to fall even more. US existing-home prices are expected to drop almost 2 percent this year nationally, according to the National Association of Realtors, and are likely to fall further in areas saturated with homes for sale.
"Buyers just want price," says Mike Morgan, a Stuart, Fla.-based lawyer, real estate broker, and consultant who researches property markets for hedge funds and financial institutions. "Buyers have become educated, and they can easily cut through the fluffy incentives."
Morgan doesn't see any national rebound until at least 2010; maybe longer if builders keep constructing homes, and if banks continue dumping foreclosed properties on the market.
About 2 million properties may be foreclosed (more foreclosure stats) on in the coming year alone, resulting in an estimated loss of $223 billion in US home equity, particularly in California, New York, Florida, and Illinois, according to the Center for Responsible Lending, a North Carolina-based nonprofit.
Living near a foreclosed home may even trim as much as $5,000 from your home's market value, the center says. Some 44 million households will be affected, or about a third of all US housing units.
Selling has become a trying proposition in this dour market. Morgan has found that traditional deal-sweeteners such as paying broker bonuses and giving cash back on closing to the buyer aren't working as well as price cuts.
"On one $429,000 home a client wanted me to sell, the seller wanted to give the broker a $30,000 bonus on top of the commission. I told him it wouldn't help. I told him to just drop the price."
Because the market is so price-sensitive - buyers want bargains and sellers want to get prices they saw at the market's peak - you have to be flexible when advertising your home.
Morgan suggests you sell exclusively through Internet-based property sites and local Multiple Listing Services. He says newspaper ads, signs, and open houses don't work as well as the Internet.
When you price your property, you need to employ a strategy that can run counter to your emotional perception of the home's value - sometimes listing at a price far below what you hoped for.
Like any commodity, a home's price will follow supply-and-demand trends. In theory, custom homes in desirable neighborhoods should hold their value. Other properties should be discounted depending on how many similar homes or condos are on the market. Every market is different, though.
"If you don't get any calls on your listing price after a week, drop your price $10,000 or about 2 percent of your original asking price," Morgan says.
"The market will tell you what the price of your home is. You better be priced 10 percent under your competition - and then be prepared to think about accepting offers under that."
Selling in Miami? You are up against almost 80,000 listed condos and single-family homes, according to ZipRealty, an online brokerage service.
There are almost 30,000 units in Las Vegas; 42,000 in Boston; 35,000 in Seattle; and 110,000 in Los Angeles. Those inventories are through October.
Price-cutting is the order of business in most major markets. The service's price-reduction index, for example, shows that more than half the listings surveyed in Boston and Orange County and Sacramento, California, are discounted.
"People were telling me Boston and Seattle were OK," said Morgan, who recently visited both cities. "I've got news for those folks. They aren't OK." Is now the time to buy a home?
You don't have to be particularly creative in a market glutted with homes. The painful reality is that homes are commodities. There are more than 4 million of them out there unsold and more coming on the market every day due to foreclosures. If you really need to sell, price is the one lever that will move a property.
Buyers are waiting for prices to fall even more. US existing-home prices are expected to drop almost 2 percent this year nationally, according to the National Association of Realtors, and are likely to fall further in areas saturated with homes for sale.
"Buyers just want price," says Mike Morgan, a Stuart, Fla.-based lawyer, real estate broker, and consultant who researches property markets for hedge funds and financial institutions. "Buyers have become educated, and they can easily cut through the fluffy incentives."
Morgan doesn't see any national rebound until at least 2010; maybe longer if builders keep constructing homes, and if banks continue dumping foreclosed properties on the market.
About 2 million properties may be foreclosed (more foreclosure stats) on in the coming year alone, resulting in an estimated loss of $223 billion in US home equity, particularly in California, New York, Florida, and Illinois, according to the Center for Responsible Lending, a North Carolina-based nonprofit.
Living near a foreclosed home may even trim as much as $5,000 from your home's market value, the center says. Some 44 million households will be affected, or about a third of all US housing units.
Selling has become a trying proposition in this dour market. Morgan has found that traditional deal-sweeteners such as paying broker bonuses and giving cash back on closing to the buyer aren't working as well as price cuts.
"On one $429,000 home a client wanted me to sell, the seller wanted to give the broker a $30,000 bonus on top of the commission. I told him it wouldn't help. I told him to just drop the price."
Because the market is so price-sensitive - buyers want bargains and sellers want to get prices they saw at the market's peak - you have to be flexible when advertising your home.
Morgan suggests you sell exclusively through Internet-based property sites and local Multiple Listing Services. He says newspaper ads, signs, and open houses don't work as well as the Internet.
When you price your property, you need to employ a strategy that can run counter to your emotional perception of the home's value - sometimes listing at a price far below what you hoped for.
Like any commodity, a home's price will follow supply-and-demand trends. In theory, custom homes in desirable neighborhoods should hold their value. Other properties should be discounted depending on how many similar homes or condos are on the market. Every market is different, though.
"If you don't get any calls on your listing price after a week, drop your price $10,000 or about 2 percent of your original asking price," Morgan says.
"The market will tell you what the price of your home is. You better be priced 10 percent under your competition - and then be prepared to think about accepting offers under that."
Selling in Miami? You are up against almost 80,000 listed condos and single-family homes, according to ZipRealty, an online brokerage service.
There are almost 30,000 units in Las Vegas; 42,000 in Boston; 35,000 in Seattle; and 110,000 in Los Angeles. Those inventories are through October.
Price-cutting is the order of business in most major markets. The service's price-reduction index, for example, shows that more than half the listings surveyed in Boston and Orange County and Sacramento, California, are discounted.
"People were telling me Boston and Seattle were OK," said Morgan, who recently visited both cities. "I've got news for those folks. They aren't OK." Is now the time to buy a home?
Wednesday, November 21, 2007
Levitt and Sons - Screwed and Screwing People - Levitt's Future Uncertain
From the Orlando Sentinel (today). Wow, I feel bad for these people. Message on Levitt Homepage reads: On November 9, 2007, Levitt and Sons filed for Chapter 11. We deeply regret the impact this will have on homeowners, customers, vendors and employees. Existing customers are welcome to call the customer hotline at 877-538-4889. Existing vendors are welcome to call 888-538-4893. Additional information is available at the following link:Chapter 11 Information. Article follows:
The financial collapse of one of America's legendary home builders has left people throughout Central Florida stuck with unfinished houses, liens against their properties, unopened clubhouses and community pools, and warranties that could be worthless.
Many of the victims, scattered throughout the Southeastern United States, don't know whether their houses will ever be finished." We're just kind of in limbo here and waiting to hear," said Vincent Santanelli, a resident of Cascades at Groveland who helped his elderly father-in-law with a $20,000 down payment on an unfinished house in the Lake County community.
"We haven't even heard a word from Levitt. "In Central Florida alone, several hundred families purchased lots and homes in communities from St. Cloud to Winter Springs that remain unfinished. Levitt and Sons hasn't offered them much reassurance.
A company Web site says Levitt's future is uncertain, the status of homeowners associations that it previously ran is "not yet clear" and it can no longer honor home warranties.Homeowners seeking work under warranty would have to go directly to vendors who provided items such as flooring. With only 72 employees left out of about 500, Levitt and Sons "just does not have the resources to continue to serve as intermediary," said Paul Singerman, lead bankruptcy counsel for the builder. Levitt filed for Chapter 11 bankruptcy protection Nov. 9, citing excess housing supply, reduction in demand resulting from less credit availability and falling prices.
The company listed assets of less than $1 million and debts of more than $100 million.Residents say they never expected this from the builder that pioneered the suburban planned community with Levittown on Long Island in 1949."They had a good reputation," said Kerri Day, who, with husband Robert Walker, bought a $450,000 home in Turtle Creek in St. Cloud. Their home is finished, along with about 20 others in the community planned for more than 400 homes.
Though relatively small when compared to today's home-building companies, "the Levitt name carries a lot of weight in the industry," said Mike Larson, a real-estate analyst with Weiss Research in Jupiter. "It's a sign of the times that even a company like that could get to this level of stress."Other smaller builders have filed for bankruptcy, and TOUSA, whose home-building companies include Engle Homes, is considering a possible Chapter 11 filing. Levitt and Sons' unfinished communities in Central Florida include Jesup's Reserve in Winter Springs and Cascades at Groveland.What happens to the homeowners associations and common areas in those communities will be "decisions that the lender makes . . . who's got mortgage liens on the property," Singerman said.
Levitt is going to try to reach an agreement with lenders to sell partly completed developments to other investors, he said. Levitt already has received permission to return deposits made by customers after Aug. 29 on homes that remain substantially incomplete. On other homes, it would be up to lenders to decide whether to return other deposits or try to finish the work.Concepts in Greenery, an Orlando landscaping company, has filed liens against common areas where it had done work. The company had to lay off 20 of its employees -- about half its staff -- as a result of not getting paid by Levitt, said
Steve Brownley, Concepts in Greenery's vice president .Levitt, he said, owes the company about $700,000. "We definitely have scaled back our operations, which we have never done in 30 years of being in business," Brownley said. "We have never laid anybody off, ever."Singerman said he did not know Tuesday how many liens had been filed against Levitt and Sons. Some of them have been filed against individual homeowners' properties. Residents and vendors working with Levit said they began to get an inkling a few weeks before the bankruptcy filing of just how bad things were getting.
"Work seemed to be slowing down," Santanelli said.Monday night, about 200 Cascades residents appeared in front of the Groveland City Council requesting financial relief -- primarily a break on water bills so they can water the landscaping in common areas. At least 40 customers have put down deposits but don't yet have houses completed, resident Eric Sorkin said.At Jesup's Reserve, the pool and cabana are off-limits because construction is incomplete. A "No trespassing" sign warns residents that the area is a construction site and that entering it without permission is a felony.
Resident Maggie Martin fears a closed cabana and pool will be "a tremendous drain" on property values. With almost 70 units of a planned 161 complete, there should be enough money coming in from association dues to keep things running for a while. "I think they can limp along" and raise enough money to pay for maintenance of common areas, said Matt Jordan, a property manager with Specialty Management"We want to at least maintain the bare minimum," Martin said.
But the situation is more precarious in Turtle Creek, with only a few homeowners around to pay the bills through their monthly assessments. The budget calls for $18,000 a month to be spent on landscape maintenance.Jordan said he's not "getting the direction I'd like" from Levitt and residents are "scared to death."
The financial collapse of one of America's legendary home builders has left people throughout Central Florida stuck with unfinished houses, liens against their properties, unopened clubhouses and community pools, and warranties that could be worthless.
Many of the victims, scattered throughout the Southeastern United States, don't know whether their houses will ever be finished." We're just kind of in limbo here and waiting to hear," said Vincent Santanelli, a resident of Cascades at Groveland who helped his elderly father-in-law with a $20,000 down payment on an unfinished house in the Lake County community.
"We haven't even heard a word from Levitt. "In Central Florida alone, several hundred families purchased lots and homes in communities from St. Cloud to Winter Springs that remain unfinished. Levitt and Sons hasn't offered them much reassurance.
A company Web site says Levitt's future is uncertain, the status of homeowners associations that it previously ran is "not yet clear" and it can no longer honor home warranties.Homeowners seeking work under warranty would have to go directly to vendors who provided items such as flooring. With only 72 employees left out of about 500, Levitt and Sons "just does not have the resources to continue to serve as intermediary," said Paul Singerman, lead bankruptcy counsel for the builder. Levitt filed for Chapter 11 bankruptcy protection Nov. 9, citing excess housing supply, reduction in demand resulting from less credit availability and falling prices.
The company listed assets of less than $1 million and debts of more than $100 million.Residents say they never expected this from the builder that pioneered the suburban planned community with Levittown on Long Island in 1949."They had a good reputation," said Kerri Day, who, with husband Robert Walker, bought a $450,000 home in Turtle Creek in St. Cloud. Their home is finished, along with about 20 others in the community planned for more than 400 homes.
Though relatively small when compared to today's home-building companies, "the Levitt name carries a lot of weight in the industry," said Mike Larson, a real-estate analyst with Weiss Research in Jupiter. "It's a sign of the times that even a company like that could get to this level of stress."Other smaller builders have filed for bankruptcy, and TOUSA, whose home-building companies include Engle Homes, is considering a possible Chapter 11 filing. Levitt and Sons' unfinished communities in Central Florida include Jesup's Reserve in Winter Springs and Cascades at Groveland.What happens to the homeowners associations and common areas in those communities will be "decisions that the lender makes . . . who's got mortgage liens on the property," Singerman said.
Levitt is going to try to reach an agreement with lenders to sell partly completed developments to other investors, he said. Levitt already has received permission to return deposits made by customers after Aug. 29 on homes that remain substantially incomplete. On other homes, it would be up to lenders to decide whether to return other deposits or try to finish the work.Concepts in Greenery, an Orlando landscaping company, has filed liens against common areas where it had done work. The company had to lay off 20 of its employees -- about half its staff -- as a result of not getting paid by Levitt, said
Steve Brownley, Concepts in Greenery's vice president .Levitt, he said, owes the company about $700,000. "We definitely have scaled back our operations, which we have never done in 30 years of being in business," Brownley said. "We have never laid anybody off, ever."Singerman said he did not know Tuesday how many liens had been filed against Levitt and Sons. Some of them have been filed against individual homeowners' properties. Residents and vendors working with Levit said they began to get an inkling a few weeks before the bankruptcy filing of just how bad things were getting.
"Work seemed to be slowing down," Santanelli said.Monday night, about 200 Cascades residents appeared in front of the Groveland City Council requesting financial relief -- primarily a break on water bills so they can water the landscaping in common areas. At least 40 customers have put down deposits but don't yet have houses completed, resident Eric Sorkin said.At Jesup's Reserve, the pool and cabana are off-limits because construction is incomplete. A "No trespassing" sign warns residents that the area is a construction site and that entering it without permission is a felony.
Resident Maggie Martin fears a closed cabana and pool will be "a tremendous drain" on property values. With almost 70 units of a planned 161 complete, there should be enough money coming in from association dues to keep things running for a while. "I think they can limp along" and raise enough money to pay for maintenance of common areas, said Matt Jordan, a property manager with Specialty Management"We want to at least maintain the bare minimum," Martin said.
But the situation is more precarious in Turtle Creek, with only a few homeowners around to pay the bills through their monthly assessments. The budget calls for $18,000 a month to be spent on landscape maintenance.Jordan said he's not "getting the direction I'd like" from Levitt and residents are "scared to death."
Tuesday, November 20, 2007
Lotsa Layoffs - WCI Layoffs - Mostly Due to Issues in Florida
Wow, Southwest Florida seems to be getting hit particularly hard with the layoffs. WCI, Centex, Lennar Bonita Bay Group all announce major layoffs and restructuring...Stories of more homebuilder layoffs follow:
Bonita Springs-based builder WCI Communities Inc. has eliminated 575 jobs as part of a restructuring plan announced last week amid the continued housing slump. About 80 percent of the cuts are due to restructuring in Florida — the core of the company's operations — and the rest come from changes to operations in the Mid-Atlantic states and the Northeast, said Jim Dietz, chief financial officer."In Florida, we've combined our tower and traditional homebuilding teams," Dietz said.
Many of the jobs cut were division leaders and managers whose jobs were redundant when the two operations merged, Dietz said.The move will cut the company's work force to about 2,100 jobs — down about 46 percent from a 2006 peak of 3,889 — and generate annual savings of about $46 million in salaries and benefits. One-time costs of the restructuring, including severance, are about $5.4 million.
"This prolonged downturn requires that we continue to assess our overhead and make reductions in order to remain viable through the trough of this cycle," President and Chief Executive Jerry Starkey said in a statement.The cuts are the latest in a wave of job losses that have hit the home-building industry in Southwest Florida since the real-estate boom fizzled:• First Home Builders in Fort Myers, which two years ago was Lee County's biggest residential contractor with almost 1,200 employees, will be down to about 50 following its layoff — announced Oct. 29 — of 200 workers effective Dec. 28.
• The Bonita Bay Group, based in Bonita Springs, has trimmed about 60 jobs since May.
• On Sept. 4, Lennar Homes announced the layoff of 72 people from its Southwest Florida division, from Naples to Manatee County.
• In March, Centex Homes laid off 141 employees from Naples to Sarasota.WCI reported a net loss of $33.2 million in the quarter ended June 30 and is expected to announce quarterly results today. Alex Perez, an advertising director in the marketing department, was among those let go. Perez said he was notified when he got to work."They give you a severance package you can take and they are paying for the week, but they basically tell you to gather your things and leave," Perez said. Perez, 42, had been with the company for about 18 months. He said his severance package offers six weeks pay and some extended medical coverage."I came just after the last cuts and you kind of wonder if that is it," Perez said.WCI cut about 600 jobs in July 2006, citing the slowdown in construction.
The company also announced David Fry will assume the post of chief operating officer and will be responsible for WCI's Florida tower homebuilding in addition to his previous responsibilities for the company's traditional homebuilding, real estate services and amenities lines of business. In the new organizational structure, the Northeast and Mid-Atlantic traditional homebuilding regions will be combined, reporting to Fry. The Northeast and Mid-Atlantic Tower
Homebuilding divisions also will be combined and will report directly to Starkey.
The company's board also announced that seven members will take no compensation for the rest of 2007 and all of 2008 and the remaining two members — Hilliard M. Eure III, chairman of the audit committee, and Jonathan Macey — will accept reduced compensation of $50,000 each.
Board members earned between $140,000 and $180,000 in 2006.The move will save the company about $1 million, Dietz said. Billionaire investor Carl Icahn was elected to the board of directors in August and then was named chairman, ending months of a proxy fight for control of the company. In March, Icahn had offered $22 per share for the company, but the move was blocked by the board at the time.
WCI Layoffs, Centex Layoffs, Lennar Lay offs, Bonita Bay Group Layoffs
Meritage Homes Closes Sacramento Office - More Meritage Layoffs
Meritage Homes lays off 12 or so employees:
Meritage Homes, the nation's 12th-largest homebuilder, is the latest to cut costs in Sacramento by consolidating operations.
The company has closed its Sacramento office, laid off about a dozen employees and called others back to its Concord office, including Sacramento division president Mike Heim.
The company plans to continue sales and construction at its eight new-home projects around Sacramento, regional president Dennis Welsch said.
"We had support staff there (in Sacramento)," he said from the Concord office. "It didn't really make sense to keep operating in multiple locations. We're consolidating those support functions, brought a few people here, and unfortunately we've had some layoffs."
Monday, November 19, 2007
Palm Beach County Real Estate Statistics
Numbers dismal but better balanced
By Linda Rawls
Palm Beach Post Staff Writer
Monday, November 05, 2007
In Palm Beach County's new-home developments there is evidence that supply is working its way toward a better balance with demand, according to a study released last week.
There were 755 single-family move-ins during the third quarter of this year - the fewest in more than a decade, according to MetroStudy, a West Palm Beach-based housing consultant.
That's also 52 percent fewer than the same quarter last year, when there were 1,585 move-ins. There were 1,135 move-ins in the second quarter of this year.
There were 486 single-family home starts in Palm Beach County developments in the third quarter of this year, MetroStudy said, a 52 percent drop from the third quarter of 2006, when there were 1,017 starts. There were 408 in the second quarter of this year.
In the peak construction year of 2003, MetroStudy noted, starts averaged more than 2,600 a quarter as builders throughout the county feverishly pounded nails to feed the boom.
Brad Hunter, an analyst at MetroStudy, said the move-in pace (755) was greater than the starts pace (486) in the third quarter of 2007. That's a healthy situation, he says.
Another good sign, Hunter said, is that total new-home inventory in Palm Beach County dropped to 2,989 units in the third quarter from 3,258 units in the second quarter.
The number of units under construction fell to 1,464 units in the third quarter from 1,776 in the second quarter.
Here's some good news for Port St. Lucie house hunters, especially first-time buyers.
Mercedes Homes' Treasure Coast Division, reacting to the still-slumping housing market, has introduced The Cottage Series, with two designs that can be built on your lot or on a Mercedes Homes lot.
The Paige, a three-bedroom, one-bath home, has 1,212 square feet of living space and starts at $103,990, the builder says. The Nicole Deluxe has 1,404 square feet and starts at $109,900. It has three bedrooms and two full baths.
Both have two-car garages and open kitchens that flow into "great rooms."
Got more money? There are plenty of options.
"I believe we've got the lowest prices in town," said Robert Smithwick, division president.
Log on to mercedeshomes.com if you don't believe him. Or even if you do.
Many other local builders are offering incentives to attract buyers in what has become the worst housing slump in 16 years.
Some of them are impressive indeed, although to date Mercedes takes the prize for most affordable. Truth be told, we don't have room to list them all in this column.
We see news releases from CentexHomes and DiVostaHomes on our desk, for instance. It's a trend we expect to continue well into next year as builders seek to work off their bulging inventories homes and condos.
Linda Rawls writes about residential real estate. Contact her at The Palm Beach Post, 2751 S. Dixie Highway, West Palm Beach, Fla. 33416-4700; (561) 820-4722; e-mail: linda_rawls@pbpost.com.
Love Homebuilder Postioning amd Marketing - Frey Homes and Mercedes Homes
Gotta love this one. Perfect example of two marketing strategies at work. The first one is not bad..someone seems to have done research and knows what homebuyers want. The other is typically pompous. Oooooh Mercedes Homes has a new designer showroom by appoinment only. Builders would throw a ticker-tape parade to have someone show up in their design center (wait, they can't afford it!) yet they position it as by appointment only. The only way that is true is if they don't have staff in the design center and need to call them in for the appointment.
Kati Trisler, director of marketing for America's First Home, an active builder in Central Florida, helped create an interactive Web site for the company's new Frey Homes line. "With so many people starting their home search online, we recognize the importance of giving them the tools they need," Trisler said. The builder's 11 new luxury-home styles, designed for move-up buyers, are in two communities: Eagle Pointe Estates in Groveland and a project in Cape Coral. The Web site will soon include an interactive floor plan and furniture spacing option. . .
Mercedes Homes has a new designer showroom in Altamonte Springs. Ann Marie Meyer, design center coordinator, said visits are by appointment only.
Kati Trisler, director of marketing for America's First Home, an active builder in Central Florida, helped create an interactive Web site for the company's new Frey Homes line. "With so many people starting their home search online, we recognize the importance of giving them the tools they need," Trisler said. The builder's 11 new luxury-home styles, designed for move-up buyers, are in two communities: Eagle Pointe Estates in Groveland and a project in Cape Coral. The Web site will soon include an interactive floor plan and furniture spacing option. . .
Mercedes Homes has a new designer showroom in Altamonte Springs. Ann Marie Meyer, design center coordinator, said visits are by appointment only.
Now May Not be the time to buy real estate - Duh!
Real estate has often been referred to as the one of the surest investments, and homeownership has long been part of the American dream. But in a market that seems to be in a freefall, buying may no longer be the safest bet.
The Federal Reserve recently warned that the housing market is unlikely to recover anytime soon.
Shira Boss, the author of Green with Envy, says first-time buyers probably shouldn't rush to get a mortgage.
"Nobody knows where we are on the curve," Boss tells Renee Montagne about the housing market. "It could be a little bit cheaper now or it could be getting cheaper for the next five or six years. You really don't know."
Boss says people should examine their individual situations "and not really rush and try to time the market."
In recent years, prospective buyers have been able to purchase homes with small down payments, or even no money down, and borrowing more than the house is worth. But these days, Boss says, buyers should count on saving enough to put 10 percent or 20 percent toward a home purchase.
"You shouldn't even look at houses until you have that kind of down payment," she says.
Before deciding to buy a house, you should also consider how stable your job is, and the likelihood that you will be required to relocate in the near future.
"Friends of mine bought a house and had it for less than year," Boss says. "And he got laid off and spent months job searching and this week accepted a new job in another city. Next week, their house is going on the market." It probably hasn't appreciated since the couple bought it, Boss says.
"Real estate is not a sure thing in terms of easy and quick profit.... There are situations where you can be stuck and lose money."
Boss says young people often feel pressured to buy a home.
"That's something I would love to caution young people against ... that feeling that, 'Oh my gosh, owning real estate is something to aim for, and if we're renting, we're basically losing money every month....' You can get in this kind of panic attack when you're young about having to buy.
"It's not necessarily something everybody can do or everybody should do," Boss says. "We should ... relax and not push people into real estate as something they have to do."
The Federal Reserve recently warned that the housing market is unlikely to recover anytime soon.
Shira Boss, the author of Green with Envy, says first-time buyers probably shouldn't rush to get a mortgage.
"Nobody knows where we are on the curve," Boss tells Renee Montagne about the housing market. "It could be a little bit cheaper now or it could be getting cheaper for the next five or six years. You really don't know."
Boss says people should examine their individual situations "and not really rush and try to time the market."
In recent years, prospective buyers have been able to purchase homes with small down payments, or even no money down, and borrowing more than the house is worth. But these days, Boss says, buyers should count on saving enough to put 10 percent or 20 percent toward a home purchase.
"You shouldn't even look at houses until you have that kind of down payment," she says.
Before deciding to buy a house, you should also consider how stable your job is, and the likelihood that you will be required to relocate in the near future.
"Friends of mine bought a house and had it for less than year," Boss says. "And he got laid off and spent months job searching and this week accepted a new job in another city. Next week, their house is going on the market." It probably hasn't appreciated since the couple bought it, Boss says.
"Real estate is not a sure thing in terms of easy and quick profit.... There are situations where you can be stuck and lose money."
Boss says young people often feel pressured to buy a home.
"That's something I would love to caution young people against ... that feeling that, 'Oh my gosh, owning real estate is something to aim for, and if we're renting, we're basically losing money every month....' You can get in this kind of panic attack when you're young about having to buy.
"It's not necessarily something everybody can do or everybody should do," Boss says. "We should ... relax and not push people into real estate as something they have to do."
Thursday, November 8, 2007
K Hovnanian 4th Quarter Reports - Sales Continue to Slow - More Layoffs?
RED BANK, N.J., Nov. 6 /PRNewswire-FirstCall/ -- Hovnanian Enterprises, Inc. today announced preliminary net contracts and deliveries for the fourth quarter ended October 31, 2007. The Company delivered 3,969 homes during its fourth quarter, a decrease, excluding home deliveries from unconsolidated joint ventures in both periods, of 19% from the same quarter a year ago.
Management continues to focus on improving its balance sheet and on generating cash flow; during the fourth quarter total debt was reduced by $390 million. The Company retired the remaining $140 million of its $150 million 10-1/2% senior notes and reduced the amount drawn under its $1.5 billion unsecured revolving credit facility by $250 million, from $456 million at July 31, 2007 to $206 million at October 31, 2007.
Net contracts for the quarter were 2,781 homes, a decrease, excluding net contracts from unconsolidated joint ventures in both periods, of 10% from last year's fourth quarter. During the month of October, the sales pace in most of the Company's markets significantly deteriorated when compared to the sales pace of recent months. Cancellations for the fiscal 2007 fourth quarter were 40% of gross contracts, compared to the cancellation rate of 35% for both the third quarter of 2007 and the fourth quarter of 2006.
The primary reason for the increase in the Company's cancellation rate is the tightening of mortgage underwriting standards, which has lead to some customers cancelling their contracts due to an inability to obtain mortgage loans. Contract backlog, as of October 31, 2007, excluding unconsolidated joint ventures, was 5,938 homes, a decrease of 30% from the same quarter a year ago.
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders, Windward Homes, Cambridge Homes, Town & Country Homes, Oster Homes, First Home Builders of Florida and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes.
Management continues to focus on improving its balance sheet and on generating cash flow; during the fourth quarter total debt was reduced by $390 million. The Company retired the remaining $140 million of its $150 million 10-1/2% senior notes and reduced the amount drawn under its $1.5 billion unsecured revolving credit facility by $250 million, from $456 million at July 31, 2007 to $206 million at October 31, 2007.
Net contracts for the quarter were 2,781 homes, a decrease, excluding net contracts from unconsolidated joint ventures in both periods, of 10% from last year's fourth quarter. During the month of October, the sales pace in most of the Company's markets significantly deteriorated when compared to the sales pace of recent months. Cancellations for the fiscal 2007 fourth quarter were 40% of gross contracts, compared to the cancellation rate of 35% for both the third quarter of 2007 and the fourth quarter of 2006.
The primary reason for the increase in the Company's cancellation rate is the tightening of mortgage underwriting standards, which has lead to some customers cancelling their contracts due to an inability to obtain mortgage loans. Contract backlog, as of October 31, 2007, excluding unconsolidated joint ventures, was 5,938 homes, a decrease of 30% from the same quarter a year ago.
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders, Windward Homes, Cambridge Homes, Town & Country Homes, Oster Homes, First Home Builders of Florida and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes.
Subscribe to:
Posts (Atom)
