US STOCKS-Wall St advances on optimism about housing sector

By Leah Schnurr

NEW YORK (Reuters) - The S&P 500 logged another 14-month high Tuesday as stocks rallied on a surge in existing home sales, which indicated more stabilization in housing and boosted optimism about the economic recovery.

Housing stocks led the way up with the Dow Jones U.S. home construction index up 3.9 percent following data that showed U.S. existing home sales rose in November at the fastest pace since February 2007.

Shares of D.R. Horton Inc ( DHI - news - people ) rose 3.8 percent to $11.15, while Toll Brothers Inc ( TOL - news - people ) gained 4.5 percent to $19.21.

"We definitely had a positive reaction off the housing numbers," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati.

Any sign of stabilization in housing lends a big boost to investor sentiment. It was the fallout from that sector's downturn that recently drove the economy into its worst recession since the 1930s and propelled the U.S. unemployment rate above 10 percent to a 26-year high.

"The housing numbers were very, very strong," Detrick added, "and that's what we've been seeing for several months."

For entire article, click here.

Glut of shadow properties could hurt housing prices

Expert says 'Pipeline of default coming'
By Alejandro Lazo and Tiffany Hsu • LOS ANGELES TIMES • December 20, 2009


A supply of 1.7 million homes headed for sale because of foreclosure or delinquency looms over the U.S. housing market, which could dampen progress toward recovery should the Obama administration fail in its efforts to aid struggling homeowners, researchers said.

A variety of measures to keep discounted bank-owned properties off the market — including moratoriums on foreclosures by major lenders and federal initiatives aimed at keeping people in their homes with mortgage payments they can afford — has helped to increase a backlog of so-called "shadow inventory" by 55 percent in the year ended Sept. 30, according to a report Thursday from First American CoreLogic, a Santa Ana, Calif.-based real estate research firm.

These shadow inventory properties are homes that have not been tallied into official inventory numbers tracked by Realtors and other real estate professionals. They include homes taken back by lenders through foreclosures and similar actions, as well as those homes where borrowers are at least 90 days delinquent on their mortgage notes. A year earlier, the pending supply of homes not yet up for sale totaled 1.1 million.

A debate among real estate professionals and market watchers has emerged as to how big an impact such shadow properties will have on housing prices and sales if they emerge as part of the total mix of homes for sale next year.

Some argue that lenders, concerned over potential losses, will spread out the pace of repossessions to avoid depressing the market. Others say efforts by the government won't be able to keep up with the sheer number of defaults brought on by unemployment and depressed home values.

"One of the key questions is the timing, and a lot of the timing issues are really related to the administration's HAMP program," or Home Affordable Modification Program, said Sam Khater, a senior economist for First American. "If many of the loans that are delinquent are able to be successfully modified, and those loans perform, then that should alleviate this issue of the pending supply and shadow inventory."

Such success is proving elusive. Data released last week by the federal government showed banks are doing poorly turning the growing number of temporary mortgage modifications into permanent ones. Only 31,382 of more than 700,000 mortgage modifications under the federal program had been made permanent by the end of November.

"Our forecast is that (home) prices will drop," Khater said. "We are basically expecting that the program will continue to proceed as it has in the recent past; there might be a slight improvement, but it is a drop in the bucket relative to the size of the pipeline of default that is coming up."

In California, home prices and sales have shown steady improvement in part because foreclosure properties have made up a smaller slice of the for-sale housing mix in recent months.

LINK TO ARTICLE

Comparison of prices shows effect of recession

Brentwood, Franklin and Spring Hill comparables all show declines
By Nancy Mueller • FOR WILLIAMSON A.M. • November 27, 2009

The average price of a home sold in Williamson County last month was $385,665. That's $65,807 less than the average sales price two years ago, according to the Williamson County Association of Realtors.

Sellers do not see such a statistic as good news, but they can take comfort in the fact that the average price is still higher than the $363,267 average of 2005.
At the same time, there's no doubt that buyers these days are getting more for their money than they have in years.

Some cases can be found by looking back at a story that was published in Williamson A.M. in July 2007 (before the recession really hit here), which compared home prices in Brentwood, Franklin and Spring Hill. The point of that story was to see how much more home you could buy for the same money in Spring Hill and Franklin compared with Brentwood by looking at the prices of comparable homes in each community.

Today, those price points are an interesting place to begin comparing what you can get for the money in today's market; in many instances buyers can find asking prices steeply reduced from prices two years ago.

Differences are noticeable

That story from July 2007 began by describing a house for sale in the Brentwood subdivision of Fountainbrooke. It was 4,127 square feet, with five bedrooms, 4½ bathrooms and a three-car garage. The price was $684,900. Someone who is shopping for a similar type home in Fountainbrooke today will really see a difference in prices. There are two homes for sale there now that are very close to that one in size and amenities, but they cost thousands less:

• There's 403 Hollow Springs Court, a 3,944-square-foot home built in 2002 and priced at $619,900. It is a 1½-story home with four bedrooms, 3½ bathrooms and a three-car garage.
• There's also 2204 Saint Josephs Court, a house with 4,876 square feet, built in 2005 and priced at $625,000. This home is a two-story traditional, with four bedrooms, 3½ baths and a three-car garage.

Similar homes to these can be found in the Franklin subdivision of Carlisle. In the July 2007 story, we mentioned one that was for sale in this neighborhood for $594,990. It had 4,022 square feet, four bedrooms, 3½ bathrooms and a three-car garage. Go to Carlisle today and you can find eight homes for sale, including two comparables to the one in that story. They are both almost $100,000 less in price:

• There's 1108 Stone Mill Lane, listed for $499,000. It has 3,950 square feet plus an additional 750 square feet that is unfinished over the three-car garage. That unfinished space is plumbed for a half-bath, too. The house, built in 2004, has four bedrooms, 4½ bathrooms.
• Also available in Carlisle today is 1204 Vintage Grove Lane, priced at $499,900. This 2002 home has 5,479 square feet, five bedrooms, 4½ baths and the three-car garage.

Spring Hill sees a dip

Home prices get more affordable as you travel farther away from Nashville, so some of the best home prices in Williamson County are found in Spring Hill.

The Wades Grove subdivision is a good neighborhood to shop for homes in the 4,000-square-foot price range in Spring Hill. In 2007, there was a 4,128-square-foot house with five bedrooms, 4½ baths and a two-car garage listed for $459,900.

A homebuyer looking at that neighborhood today would find 13 homes for sale, including two comparables with substantially lower list prices than two years ago:

• 2021 Keene Circle, 4,200 square feet, built in 2006, is listed at $295,000. It has five bedrooms, 3½ baths and a two-car garage.
• 2044 Keene Circle, 3,490 square feet, also built in 2006, is listed at $324,900. It has five bedrooms, three baths and a two-car garage. Both of these homes are the highest-priced homes for sale in Wade's Grove (as of Nov. 12).

GREATER NASHVILLE HOME SALES INCREASE MORE THAN 50 PERCENT IN NOVEMBER

There were 1,973 home closings in Greater Nashville during November, representing a 58.7 percent increase from the 1,243 closings reported during November of 2008. And, there have been 19,571 closings so far in 2009, which is 14.3 percent lower than the 22,824 closings for the same period in 2008.

The median residential price in November of this year was $158,500 and for a Nashville condominium the median price was $144,400. That compares with median prices of $165,500 and $150,000 respectively in November of last year.

Inventory is down to 22,528, compared with 23,467 in November of 2008. You can click here for a copy of the news release with more detail on home sales for November. And, you can click here for access to historical home sales data available on the GNAR website.

Big Bargains at West End Condos

There has been much speculation about the auction of the luxury condos on West End and 31st, but no one really knew what to expect. These are beautiful condos with large living spaces and upgrades throughout. Like a lot of people, I was surprised with how low they went.

2 bedrooms with great downtown views went from $300K to $365K. For example, a few on the 4th and 5th floor (with views of West End and the Nashville skyline) went from $310K (previous asking price was $740K) to $330K (previous asking price was $765K), which translates to about 60% discounts.

There were only about half as many bidders that braved the cold today than at the heavily hyped Terrazzo auction a few weeks ago. The Terrazzo saw their list prices drop around 30% at their auction. Many have said the Terrazzo buyer is different(hip, possibly younger) than the West End condo buyer (traditional, more mature), but most of the bidders at both auctions had one thing in common - they were all looking for a deal.

All 5 of the West End 1 bedrooms sold from between $227K to $295K. Only about 7 of the 3 bedroom units and 3 of the 2 bedrooms (all on the back side) went unsold. I counted a total of 30 sales. Of course, some of the ones that were "sold" may not close. But those that placed a winning bid got a very nice deal today.

For more information, contact Jeff Fulmer at 615-545-8611 or jeff@jefffulmer.com

Things To Do This Weekend

If you are looking for something to do this weekend and have any interest in the downtown Nashville condo market, here are a couple of suggestions:

1. If you are more in the mood to browse than buy, you may want to check out a few of the units on the tour of homes at The Encore this Saturday from 1 to 4 at 301 Demonbreun in "SoBro." Units start in the $200,000 and go up. Click here for more information.

2. As I've mentioned here several times (see prior blogs), The West End is having their auction this Saturday. You need to be pre-registered by today (Friday) if you intend to bid. These high end units start in the $300,0000 for a one-bedroom and go up into the $700,000s for a two bedrooms, although it's anticipated that prices will be coming down dramatically tomorrow. If you would like more specifics, click here for more information on the auction.

If you decide to go to either event, let me know. Hope to see you there!

West End Condo's - On the Auction Block

This Saturday, the West End condos will take their turn on the auction block. These luxury condominiums will have to take much lower prices in order to move their high end units. Just a couple of weeks ago, the Terrazzo managed to auction off 30 units at an average of 33% off list price. Now the Terrazzo has re-set their prices to reflect the new pricing structure. West End has not hyped their auction to the extent the Terrazzo did, which may mean even better opportunities to bidders.

Below, I have reprinted a recent article in the Nashville Business Journal on the upcoming auction. If you are interested, you can scroll down my blog for more articles on the Terrazzo, the West End, and the Nashville condo market. If you would like more information on the West End auction, you can go to their web-site here. You can also contact me if you have other questions and/or would like pre-registeration information by going to my web-site.



After Terrazzo, all eyes on West End
Monday, November 23, 2009
Nashville Business Journal - by Eric Snyder Staff Writer

Days after Saturday's auction generated 27 sales inside the Gulch's Terrazzo condominium, attention is now turning to the auction of 45 units in The West End Luxury Condominiums on Dec. 5.

Twenty-one units were sold to the highest bidder Saturday, at an average square-footage rate of $235, an average of 62 percent of original list prices.

Grant Hammond, a real estate broker with a focus on condos, had said he was monitoring the auction to gauge the viability of the downtown Nashville condo market. Monday, he said he was encouraged by what he saw.

“I feel like that downtown living is probably a little more viable than it was the day before the auction,” he said.

Though not all of the 35 units on the block sold Saturday, Hammond said 27 sales is still a strong figure — particularly because Terrazzo units are not eligible for FHA loans, thereby limiting the number of potential buyers.

“The auction itself has proven that there is $7.3 million ready to move in one day, in one building,” he said, referring to the total value of sales Saturday.

While other condos may be forced to lower their list prices following Saturday's auction, Hammond said that won't be based on Saturday's average rate, which he called a “one-day anomaly.”

Hammond likened Saturday's sale to a bon-fire — what comes next, he said, will be a “slow burn” that won't require such drastic cuts to square footage rates.

What will have a bigger impact on area prices, he said, is when Terrazzo revises its list prices for remaining units. Crosland Tennessee President Bill Barkley, developer of Terrazzo, acknowledged Saturday that list prices will be revised downward.

Hammond said those revisions will have a larger impact because, unlike a one-day bon-fire, they will be informing the opinions of area buyers and realtors as the new prices remain posted on the local MLS for the weeks and months ahead.

The upcoming auction of The West End units will be conducted by Jerrold Pedigo Realty. Owner Jerrold Pedigo said that, though he has hasn't fully explored the data resulting from Saturday's auction, there may not be many conclusions to draw on The West End auction as a result.

“I think the Terrazzo and The West End are two different products,” he said.

A number of units will be sold at The West End without a minimum reserve, though how many — and what the reserve will be for the remaining units — has not been finalized, Pedigo said.

Like the Terrazzo auction, there will be a possibility of ending the bidding early.

“That's the case of most every auction you'll see,” Pedigo said.

That The West End will sell all 45 units seems far fetched to Hammond, who estimated that 20 of the units — some of the largest in Nashville — will sell if they can be bought, like Terrazzo units, for 33 percent discounts.

And while the Terrazzo auction drew 250 people and TV cameras, Hammond said he hasn't seen the same level of marketing for The West End auction that would draw such a crowd. He said he spoke to some potential buyers Saturday who hadn't heard of The West End.

“It's been an anecdote to the Terrazzo auction,” he said