KB Home: No signs the market is stabilizing

Good morning. News item from Reuters via CNBC: KB Home reports a third-quarter loss and says it sees "no signs that the housing market is stabilizing. "KB Home Thursday posted a fiscal third quarter loss, as the U.S. home market suffered a deepening decline in demand, a swelling supply of homes for sale and tighter standards in the mortgage market."

From the press release:  Jeffrey Mezger, president and chief executive officer: "The oversupply of unsold new and resale homes and downward pressure on new home values has worsened in many of our markets as tighter lending standards, low affordability and greater buyer caution suppress demand, while higher foreclosure activity combined with heightened builder and investor efforts to monetize their real estate investments boost supply. The negative impact of these conditions on our selling prices and gross margins prompted us to take substantial write-downs of inventory and goodwill in the third quarter. At this time, we see no signs that the housing market is stabilizing and believe it will be some time before a recovery begins."

More: "We expect housing industry conditions to continue to worsen through the end of the year and into 2008," said Mezger. "Rising foreclosure rates are intensifying the problem of surplus inventory and will likely drive further home price reductions."

Our take: Considering that it comes from a company that sells homes, this is a pretty negative assessment across the board: the market is weak and growing weaker; prices are falling but homes are still unaffordable to many potential buyers.

Your thoughts? Comments? Email story tips to lalandblog@yahoo.com.

Little house near the freeway

No, this is not about the Little House ON the Freeway, this is about a little house aboutthisclose to the freeway.

Westside Bubble has been watching this 3-bedroom listing in Mar Vista for a while -- back in February, it was listed at $725,000 and the listing noted, "freeway close." Roger that.

It's almost October, the freeway is still close, the price has been cut to $679,000, and the listing now reads, in part: ""This light and bright home sits high on a knoll affording privacy. ... The 405 expansion/sound wall is almost complete. ... VERY motivated Seller!!..."

Comments? Email story tips to lalandblog@yahoo.com.
Photo Credit: Westside Bubble

53 new homes, "must be sold"!

We've seen a couple of these before, but this one is worth noting: another auction of brand-new homes is coming this weekend in San Diego. "53 New Homes in San Diego Must Be Sold," or so says the website of REDC, which is running the auction.

 We've looked at a bunch of the listings, and it appears these are all condos  (thanks, D). Opening bids are set at roughly 50% of "previous value," although both of those numbers are squishy concepts at best. Example: Pricing on 2222 La Boheme, a 2-bedroom, 2-bath, 1097-SF home, is listed as: starting bid $189,000,  "previously valued to" $419,990.

There's an interesting side story here: CNBC's Diana Olick reports the homes were built by D.R. Horton, but it is unclear whether Horton has already sold the houses units off in bulk, or still owns them. Horton isn't talking -- at least they're not talking to Diana.

Comments? Insights? Email story tips to lalandblog@yahoo.com
Photo Credit: Reuters

Cal. sales down 28% in August

In all the excitement yesterday about The Little House on the Freeway, we missed this one: "Home sales decreased 27.8 percent in August in California compared with the same period a year ago, while the median price of an existing home increased 2 percent, the California Association of Realtors reported."

More from CAR: "'While low affordability, tighter underwriting standards and expectations of lower prices continue to pose challenges for the market, the decline in sales accelerated in August as a result of the so-called credit or liquidity crunch that began in July.,' said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. 'With credit drying up, even qualified buyers were unable to receive funding for home purchases. ... We expect the impact of the credit crunch to play out over the next several months, and that it will continue to negatively impact sales,' she said."

LA numbers: Median sales price was $605,000, a gain of 2.6% over year-ago levels; the number of homes sold in LA fell 23.9% from year-ago levels.

Comments? Insights? Email story tips to lalandblog@yahoo.com.

It's "America's Open House," starring Countrywide

Good morning.  Who says houses aren't moving in LA? I just saw one moving up the freeway.

But seriously folks... News item: Countrywide will dispatch 7,000 "home loan consultants" to open houses around the country beginning this weekend in a campaign it is calling "America's Open House."

From the Countrywide press release: "Countrywide's sales team will join forces with local real estate agents at weekend open houses to educate home buyers about the basics of the real estate market and give them the tools they need to shop for a home."

More: "'With housing prices lower in many parts of the country and still-low interest rates, we are clearly in a buyer's market,' said Dan Hanson, managing director of Countrywide Home Loans. 'Our hope is to make it easy for people who've been on the sidelines to go out, look at open houses, and understand their home loan options.'"

Thoughts? Insights? Email story tips to lalandblog@yahoo.com.

For sale: 4.58 million homes

News item from the LATimes: "The supply of unsold U.S. homes ballooned to an 18-year high in August as demand for existing homes fell to a five-year low, according to a report by the National Assn. of Realtors. The Washington-based trade group blamed the onset of the global credit crisis last month for the drop in sales.

"The unusual disruptions in the mortgage market resulted in a fairly high number of postponed or canceled sales," said Lawrence Yun, the group's chief economist.

NAR President Pat V. Combs: “The abundant choice of homes is permitting buyers to better negotiate price and terms.  There are good opportunities in the market now, especially for first-time buyers.”

The total inventory of unsold existing homes -- 4.58 million -- represents a 10-month supply at existing sales rates, and does not include unsold new homes.

Thoughts? Comments? Email story tips to lalandblog@yahoo.com.
Photo Credit: Reuters

Photo Caption Contest: The 101 House

Good morning, Will Kempton, how goes the battle against gridlock?

News item: "For 10 days now, a sagging house parked on the Hollywood Freeway's northbound shoulder in the Cahuenga Pass has had people gawking -- and talking."

Our take: We'll get to the humor in a sec. But first: who's the genius at CalTrans responsible for letting a house sit in a freeway for more than a week? Or was it a team effort?

Now humor: Please use the comment section to write your best photo caption. Better yet, write the MLS listing for this "Eye-catching freeway adjacent fixer, minutes from downtown, it's the talk of the town!"
Email story tips to lalandblog@yahoo.com
Photo Credit: LATimes.com

Median sales price trends

Vultur asked for this, and it makes sense: median sales prices, with year over year changes. We're adding another stat, which we read about over the weekend: trailing 12-month home sales in LA. More on that later.

Month    Median Sales Price            y/y change       12-month LA sales total
Jan. 07   $520,000                        6.0%                 108,755
Feb 07    $528,000                        8.0%                 107,966
Mar 07    $540,000                        6.0%                 105,514
Apr 07    $540,000                        6.0%                 103,455
May 07   $550,000                        7.0%                  100,167
Jun 07    $545,000                        5.0%                   96,513
Jul 07    $547,500                        5.0%                    94,478
Aug 07   $550,000                        6.0%                    90,985

Source: DataQuick; Note: y/y percentage changes are rounded (don't ask, old calculator rounds automatically, we're working on it)
Hat tip: Vultur
Thoughts? Insights? Email story tips to lalandblog@yahoo.com.

Biggest price drop in 16 years

Good morning. News item from Reuters: "A drop in prices of existing U.S. single-family homes accelerated in July, and the annual decline in the 10 largest cities was the sharpest since 1991, according to the Standard & Poor's/Case Shiller national home price index on Tuesday."

More: "S&P said its composite month-over-month index of 10 metropolitan areas declined 0.6 percent in July to 215.94, for a 4.5 percent year-over-year drop. It was the worst rate of decline since July 1991 as the economy was emerging from recession, S&P said."

The price index for Los Angeles dropped 0.5% from June to July, and 4.8% from July 06 to July 07.

Thoughts? Comments? Email story tips to lalandblog@yahoo.com.

LA listing prices slip again

Median listing prices in greater LA slipped again this week, down by $999 to $519,000, according to Housing Tracker's weekly calculation of MLS listings. Inventory moved slighly higher, to 46,252 homes for sale.

Median listing prices have now slipped $26,000 since this blog launched in mid-April; listing prices are 8.1% below year-ago levels, and have declined 5.5% in the past six months.

Date         Median Price             Inventory
4/16         $545,000                 35,489
5/14         $545,000                 38,297
6/11         $540,000                 40,766  (up 20.4% y/y)
7/16         $535,000                 42,685 (up 14.5% y/y)
8/13         $529,000                 44,483  (Up 13.6% y/y)
9/10         $520,000                 46,414 (Up 16.9% y/y)
9/24         $519,000               46,252 (Up 14.6% y/y)

Thoughts? Comments? E-mail story tips to lalandblog@yahoo.com
Photo Credit: Reuters