Zell to entertain offers for Tribune Tower, L.A. Times building

Sam Zell, the real estate mogul who runs the Tribune Company, put out this stunner this morning: he's willing entertain offers for the company's prize real estate holdings, which include the Tribune Tower in Chicago and the Times Mirror Square complex here in Los Angeles (pictured), which many know as the Los Angeles Times building.

Here's how Thomas Mulligan is covering the story for the L.A. Times: "Tribune Co. is putting two of its most historic properties -- the L.A. Times building and Tribune Tower in Chicago -- on the block."

This from an e-mail Sam sent to me personally, as well as every other Tribune employee: "...  we are in the process of asking a number of real estate firms to give us their best thinking on how we can generate more value from Tribune Tower in Chicago, and the Times Mirror Square complex in Los Angeles."

More: "We’ll be considering numerous options to maximize the value of these properties.  While a near-term transaction is possible, we’ll be focusing on opportunities that allow for some level of ongoing occupancy in both buildings for the mid-term (defined as five years), for farther out (15 years), and beyond.

"Most importantly, we are not rushing this process, and I can assure you we will not accept anything but full market value for these assets.  As we made clear on our first quarter earnings call, Tribune has sufficient liquidity to satisfy our principal amortization requirements through 2008, due to the proceeds we will realize from the Newsday transaction, and from our plans to create an asset-backed commercial paper program.

"Our request for proposals, which is being issued today, is likely to generate media attention and debate about what we should or should not do with the properties.  Both Tribune Tower and Times Mirror Square are iconic structures, deeply intertwined with the history of this company.  But, they are also both under-utilized, and as employee-owners, it’s in our best interests to maximize the value of all our assets."

Your thoughts? Comment? E-mail story tips to peter.viles@latimes.com.
Photo: Los Angeles Times

Report: Illinois to sue Countrywide

News item from the New York Times tonight: "The Illinois attorney general is suing Countrywide Financial, the troubled mortgage lender, and Angelo R. Mozilo, its chief executive, contending that the company and its executives defrauded borrowers in the state by selling them costly and defective loans that quickly went into foreclosure."

More: "The lawsuit, which is expected to be filed on Wednesday in Illinois state court, accused Countrywide and Mr. Mozilo of relaxing underwriting standards, structuring loans with risky features, and misleading consumers with hidden fees and fake marketing claims, like its heavily advertised 'no closing costs loan.' Countrywide also created incentives for its employees and brokers to sell questionable loans by paying them more on such sales, the complaint said."

The report says Countrywide did not immediately respond to an e-mail seeking comment.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

Ask the congresswoman: Your questions for U.S. Rep. Laura Richardson

A week ago, I asked readers to submit questions they'd like to pose to U.S. Rep. Laura Richardson, the triple-default Democrat from Long Beach who still hasn't explained details of the loan modification she negotiated with Washington Mutual in hopes of saving a home from foreclosure.

Here are the four reader questions I've submitted to Richardson's office:

Laker asked, "On your Sacramento house, for the benefit of the public and those that are about to lose their home to foreclosure, would you please disclose the agreement you've reached with WAMU on the loan modification?"

RahRahGrl asked, "Have you paid your property taxes (for all properties) in full?"

RZ asked, "How do you respond to constituents who think that your personal woes (house foreclosure, missed payments, etc.) have taken away your credibiility to make good decisions as a congresswoman?"

My Less Than Prime Beef asked, "Is it time yet for another Congressional pay raise?"

I've e-mailed these to Rep. Richardson's office and called also seeking answers.  I'll let you know if I hear back. Relatedly, it appears Richardson still enjoys the support of House leadership. This is from the AP today: "The majority leader of the U.S. House is holding a fundraiser for Southern California Congresswoman Laura Richardson despite reports about Richardson's history of defaulting on home loans and failing to pay off debts."

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: L.A. Times
 

South by Southwest: The housing meltdown is regional

Today's report on falling home values from Case-Shiller is further evidence that the housing meltdown is not a 50-state phenomenon: Price declines are concentrated in California, the rest of the Southwest and Florida, which I'll now call the Bubble Belts. Take a look at these numbers from today's Case-Shiller report:

Declines in California-Southwest-Florida from April '07 to April '08:
Las Vegas -26.8%
Miami  -26.7%
Phoenix -25.0%
Los Angeles -23.1%
San Diego -22.4%
San Francisco -22.1%
Tampa -20.4%
Average decline for Cal.-Southwest-Florida: -23.8%

Declines in other large cities:
Atlanta  -7.5%
Boston -6.4%
Charlotte -0.1%
Chicago -9.3%
Cleveland -6.8%
Dallas -3.4%
Denver -4.7%
Detroit -18.0%
Minneapolis -15.5%
New York -8.4%
Portland -4.7%
Seattle -4.9%
Washington -14.8%
Average decline for rest of the nation: -8.0%

Conclusion: The price declines in the Bubble Belts are three times as severe as those in the rest of the nation.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

Photo: Getty Images

Remembering Malibu, when it was affordable. Seriously.

Excellent post over at L.A. Now reminiscing about the days when Malibu's Paradise Cove was affordable -- a "risky investment" even, and how the media, the celebrities and the money people ruined all that.

Veronique de Turenne (one of the best names in blogging), starts off, "When we bought the trailer here in Paradise Cove 14 years ago, a series of bruising lawsuits between residents and the park's owners had turned it into a risky investment and home values had tanked. We had a tiny down payment and this was the only place we could afford. Anywhere.

"It was quiet here, a mix of families and retirees. There were no car alarms. There were very few golf carts. You knew everyone you saw on the beach."

Read the whole thing here.

Falling faster: L.A. home price declines accelerating

Today's Case-Shiller report on home prices in large cities shows that home price declines in Los Angeles are accelerating, as foreclosures continue to weaken the region's housing market. 

The Case-Shiller report for April shows prices in Los Angeles falling at an annual rate of 23.1%, an increase from an annual rate of decline of 21.7% in March. Nationwide, Case-Shiller's composite of 20 large cities also shows housing price declines accelerating, now falling at a rate of 15.3% from year-earlier levels.

Bloomberg News: "Home prices in 20 U.S. metropolitan areas fell in April by the most on record, signaling the housing recession is far from over, a private survey showed today."

The Case-Shiller report continues to show that the housing collapse is most severe in the west and Florida, with cities in those regions showing price declines much worse than the rest of the country. These are the markets where prices are falling fastest, according to Case-Shiller:

Las Vegas: -26.8%
Miami: -26.7%
Phoenix: -25.0%
Los Angeles: -23.1%
San Diego: -22.4%
San Francisco: -22.1%

Average of 20 large cities: -15.3%
Chicago: -9.3%
New York: -8.4%

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

$500 moves you in: The new no-money-down mortgages

Good morning. There's an excellent piece of enterprise reporting in this morning's Wall Street Journal about the new wave of no-money-down mortgages built on government-backed loans.

The Journal's Nick Timiraos: "The offers -- including "100% financing" -- are made possible due to down-payment assistance programs run by nonprofit organizations. These programs are funded largely by home builders and also by private homeowners desperate to sell. The seller-funded groups provide enough down-payment money to buyers that they can qualify for a mortgage backed by the Federal Housing Administration, which requires at least a 3% down payment."

More: "D.R. Horton Inc., the nation's largest home builder by volume, is touting '100% financing' for its two- and three-bedroom condominiums near the beach in Maui, Hawaii, which start at $498,000. In the Seattle area, local builder Quadrant Corp. is advertising townhouses that can be purchased with as little as $500 down. 'Use your coffee budget to move into a new home,' says an online promotion."

The FHA says borrowers who receive a down payment from a nonprofit group are two or three times more likely to default, the Journal reports. It estimates that such borrowers now make up 34% of all FHA loans -- up from 2% in 2000.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

LA listing prices now down $149K from peak

Interesting numbers tonight from Housing Tracker's weekly analysis of MLS listings: Median listing prices in Los Angeles County dropped sharply over the past week, falling by more than $10,000, as inventory of for-sale houses and condos spiked higher. Here's your headline: Median listing prices in Los Angeles have now fallen $149,000, or 25.8%, from their April 2006 peak.

Numbers: Housing tracker reports median listing prices fell from $439,999 to $429,900, marking a decline of 20.2% over the past year. That 20.2% rate of annual decline marks the highest rate of decline in this housing cycle. This tracks pretty close to median sales prices as reported by DataQuick: down 23.3% over the past year in Los Angeles, to $422,000.

Inventory of for-sale homes and condos rose by more than 3,000 units, to 45,493, and is pacing 8.2% ahead of year-ago levels.  That sharp rise broke a long streak during which inventory had stayed fairly flat.

Analysis: A decline in the median sales, or listing price, doesn't necessarily mean the value of a typical home has declined by the same amount. It suggests some decline in overall values, but also that the market of listings and sales is increasingly dominated by cheaper homes.  This is the foreclosure factor: more and more homes on the market are cheaper, foreclosed homes.

Date               Median listing price                      Inventory

4/06               $579,666                                      27,251
4/07               $545,000                                      35,489
5/07               $545,000                                      38,297
6/07               $540,000                                      40,766 (up 20.4% y/y)
7/07               $535,000                                      42,685 (up 14.5% y/y)
8/07               $529,000                                      44,483 (up 13.6% y/y)
9/07               $520,000                                      46,414 (up 16.9% y/y)
10/07             $510,000                                      46,603 (up 15.6% y/y)
11/07             $499,900                                      46,503 (up 19.0% y/y)
12/07             $495,000 (down 10.0% y/y)      43,174 (up 28.2% y/y)
1/08               $479,900 (down 12.6%)            40,850 (up 33.3% y/y)
2/08               $475,000 (down 13.5%)            43,625 (Up 38.3%)
3/08               $464,900 (down 15.5%)            42,098 (Up 31.4%)
4/08               $450,000 (down 17.4%)            42,430 (up 16.7%)
5/08               $449,900 (down 17.4%)            42,532 (up 11.1%)
6/02/08         $446,500 (down 17.3%)            42,458 (up 4.9%)
6/09/08         $440,000 (down 18.5%)            42,398 (up 4.0%)
6/23/08         $429,990 (down 20.2%)            45,493 (up 8.2%)

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

The L.A. housing bubble: a snapshot in time

Calculated Risk, the reliably insightful economics blog, posted the above chart today as part of its coverage of the Harvard Joint Center for Housing Studies report. It's not up to date -- as you can see it does not include 2007 and 2008 data; but it's a powerful illustration of why the Los Angeles housing market really is different.  What happened here did not happen in most of America.  What happens next? That's why the blog publishes comments.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Hat Tip: Uncle Billy Reads Calculated Risk.

Twelve tips to sell your house in a crummy market

Worthwhile reading over the weekend for those of you trying to sell a house right now -- 12 tips, plus a few extras, to sell your house.

The list compiled by Marni Jameson contains some of the usual suspects (Number 2 is "start at the curb", and Number 3 is "Paint!"), and I'll print the entire thing below. What struck me is the tidbit of advice that came after the 12 tips: get real about price.

In an effort to make this unpopular advice more acceptable, San Diego broker Sandy Fish puts it diplomatically. Don't ignore the competition:

"Fish helps clients get realistic about their homes by showing them what else is on the market in the same price range. 'When they see what they're up against, including new homes, that often motivates them to get real about their price and what they should fix up,' Fish says.

Click below to see the top 12 tips.