November 5th, 2009, 11:45 am by Jeff Collins
 William Lyon Homes of Newport Beach reported that it’s getting closer to operating in the black, but it still wasn’t there in the third quarter.
The firm reported a net loss of $11.6 million during the three months ending on Sept. 30. That compares to a net loss of $41.1 million in the same period a year ago — a period that also included $21.9 million worth of “impairments,” or paper losses caused by the market downturn. There were no impairments in the just-completed third quarter, a company statement said.
In addition, the company reported:
- The average home price was down but sales per development were up.
- In California, the average selling price of a William Lyon home was $276,300 in the third quarter, down 43% from the same period a year ago.
- The average price companywide — including homes sold in Arizona and Nevada — was $245,700, down 33.4%.
- The overall number of sales was down because the number of developments with homes for sale dropped to 24 from 39 a year ago. The company sold 246 homes in the third quarter, compared to 264 a year ago.
- But sales were up per development. The company averaged 10.3 sales contracts per development this past quarter, compared to 6.8 a year ago.
In a conference call later today, company officials said average prices have dropped due mainly to a switch to selling smaller, cheaper homes. Lyon Homes currently has no homes for sale above $500,000, one company official said, a trend that started several years ago.
“It’s definitely bearing some fruit in this market where jumbo (loan) financing is challenged,” said one official (hard to tell which one was speaking, company President Bill H. Lyon or Colin Severn, interim CFO/controller).
Company officials said also that Lyon Home’s Ivy development in Woodbury East has been so successful that they’ve raised the price by $10,000 in that project’s last release of homes and discontinued all discounts except for a financing incentive. The Ivy attached townhomes, with prices starting below $400,000, was relaunched last summer after a delay caused by the housing slump.
Nevertheless, the Ivy project won’t be a huge help to the company’s profit margins because of a profit-sharing arrangement with the Irvine Co., the company official said.
“I don’t think it had a huge impact on the numbers necessarily. The Irvine Co. deals are generally underwritten at 6%, and there’s a profit participation split with 70% going to the Irvine Co. over that. But honestly, (high sales there) helps a little bit. … Sales activity continue to be good there.”
(Update: Post expanded twice to include comments from today’s conference call.)
Related news:
Posted in: Brokers, builders, etc. • Top tale • industry • William Lyon Homes | 25 Comments »
November 5th, 2009, 10:21 am by Jon Lansner
The latest National Association of Home Builders’ Remodeling Market Index for the third quarter says its survey of remodeling contractors found …
- The index for current remodeling market conditions rose in the West to 47.3 from 40.5 in Q2. That makes West the nation’s best but scores below 50 shows more remodelers say market conditions are getting worse vs. improving conditions.
- Elsewhere, Midwest up, too, at 43.2 vs. 38.3. Down, though, in the Northeast (33.7 vs. 36.9) and South (38.6 vs. 39.7).
- Nationwide, current market conditions index up to 39.8 from 38.1, third straight quarter of improvement.
- “Some remodelers are receiving more calls for bids, but it is still extremely difficult to close a sale,” said NAHB’s Greg Miedema from Tucson, Ariz. “Financing continues to be an impediment with many home owners not able to secure home equity loans or other lines of credit.”
Big real estate woes:
Posted in: Brokers, builders, etc. • industry • National Association of Home Builders • remodeling | 2 Comments »
November 5th, 2009, 12:31 am by Jeff Collins
 With asking prices for ocean-front housing going as high as $40 million, it’s refreshing to see that there’s still some beachfront homes left in Orange County with price tags around $3 million or less.
One of the newest listings of that type is the Seal Beach home at 1601 Seal Way, which went up for sale last month at a relatively humble at $2,995,000 to $3,150,000. (Why that’s just seven times the median home price, instead of 93!)
Even north of Seal Beach pier, you’d be hard-pressed to find any beachfront homes for $5 million or less.
And the “cheapest” homes on the sand in San Clemente, Dana Point and Laguna Beach? According to Register blogger Kelli Hart: Just two are below $3 million, one for $2.75 million, another for $2.9 million. The average price tag for the “cheapest” 13 listings in those three cities is $4.6 million.
But the south side of Seal Beach pier — a strip of flood-prone properties consisting mainly of duplexes and beach rentals — is less ostentatious. Prices there tend to be closer to $2 million, but you sacrifice privacy as strollers, skaters and bicyclists parade by on a summer day.
The single-family residence at 1601 Seal Way, however, is a bit more private. A stucco wall separates the patio from the boardwalk. And a rooftop deck allows sunbathing high above the hubbub (click on photo above to enlarge roof-top view). A bank of glass along one wall of the second-floor family room and adjoining master bedroom provide a spectacular view of the blue Pacific and Anaheim Bay beyond the vast beach. (Click on photos above for larger images!)
Listing agents describe the property this way:
“This custom two-story boasts an open design, breathtaking views and quiet location on the sand. Walls of windows and glass make this home light and bright. Formal entry leads to living room with fireplace, faux finishes and designer touches. … You will enjoy entertaining on the partially covered outdoor patio and the formal dining room with beach views. A large eat-in-kitchen is off the dining room. An office/bedroom with bath is conveniently located downstairs.”
Related news:
Posted in: Luxury homes • Top tale • 1601 Seal Way • houses • Seal Beach | 16 Comments »
November 4th, 2009, 6:00 pm by Jeff Collins
Real estate news and views from around the globe that make you go, “Really?”
- DETROIT HOUSING ON ICE: A photographer and an architect plan to freeze one of Detroit’s thousands of abandoned homes this winter to draw attention to foreclosures that have battered the region. (Associated Press) MORE HERE!
- MOTOWN MARK-UP: Hearings are looking into why Detroit Public Schools paid double the appraised value of some properties it purchased. (Freep.com) MORE HERE!
- MLS MISSTEP? An FTC opinion accuses Michigan’s largest real-estate listing group of violating federal law by restricting some discount real-estate listings on its Web sites. (Wall Street Journal) MORE HERE!
- AND IN SEATTLE, A REPO CAPER: Seattle subcontractors who reportedly hadn’t been paid in full allegedly scaled ladders to reclaim portions of balconies they’d installed. (Seattle Weekly) MORE HERE!
PS: CHECK HERE for our coverage of O.C. real estate troubles
Posted in: Odds & ends • Top tale • industry • Really | 1 Comment »
November 4th, 2009, 4:57 pm by Jon Lansner
Real estate industry got an early holiday gift: Senate passage late today of extended and expanded tax credits for homebuyers …
Says the LA Times …
The Senate today voted to extend and expand a tax credit for home buyers as an added boost for the recovering real estate market, and also approved a provision to continue giving aid to the long-term unemployed. The measure, adopted on a strong bipartisan vote of 98-0, also would extend and expand a tax benefit for businesses with losses. The House is expected to follow suit within days, and President Obama is expected to sign it into law.
Details, from Reuters …
- Extends an existing $8,000 tax credit for first-time homebuyers until April 30, 2010.
- That credit, which was due to expire on November 30, has helped the housing industry recover from the worst recession since the Great Depression of the 1930s.
- Homebuyers who already own a home and have lived there for at least five years would be eligible for a $6,500 tax credit.
- More affluent buyers would be eligible for the credit, as it would be phased out for individuals who earn more than $125,000 or families that earn more than $225,000. The current credit is phased out for individuals who earn more than $75,000 and families that earn more than $150,00.
- Home purchases under contract as of April 30, 2010, would have to close within 60 days to be eligible for the credit.
- The credit only applies to the purchase of principal residences that cost $800,000 or less.
- Would cost $10.8 billion over 10 years.
Opinions …
What will renewed, bigger U.S. homebuying tax credit do for housing?
Lansner on Real Estate’s most-popular October postings …
- 16 OC hotels in deep financial distress
- Corona del Mar home on TV’s ‘Million Dollar’ show
- OC renters enjoy 3rd biggest US rent cuts
- Investor loses $50 million on Santa Ana office tower
- Hear why this guy saw home-price crash coming
- OC sent 60,000+ erroneous property tax bills
- $3 million price cut sells TV-featured OC mansion
- Top Calif. home price gains in 3 OC cities
- $38 million bay-view home is 2nd priciest OC listing
- Calif. house prices projected to jump 7.9%
- OC builder gets $206 million loan from Neverland savior
- UCLA sees 16% OC home-price gain in 2010
Posted in: Policy, politics & regulation • Top tale • industry • tax credits | 33 Comments »
November 4th, 2009, 1:40 pm by Jeff Collins
 Davi The California Department of Real Estate now has more than 1,340 open investigations into loan modification scams around the state, up from just 10 in August 2008, DRE Commissioner Jeff Davi told a women’s Realtor group in Huntington Beach today.
The DRE also has issued more than 330 desist-and-refrain orders in the past year demanding that people stop running illegal loan-mod operations, he said. That’s up from an average of 80 to 100 such orders annually.
With more than 225,000 foreclosures occurring in the state each year, scam artists are taking advantage of victims trying to save their homes, sometimes robbing them of the last dollars they have to relocate once their homes are seized.
“These people were taking advantage of people at the end of their ropes,” said Davi, speaking at the O.C. Coastal Chapter of the Women’s Council of Realtors. “And they are so prevalent.”
Many scam artists see the issuance of a desist-and-refrain order as a cost of doing business, Davi said. Often, they’re able to reopen under a different business.
But the orders serve as the basis for referrals for prosecution to local district attorneys or the state attorney general.
Noting that high rates of foreclosure are expected to continue, he added, “We’ve got a couple more years of this, a couple more year of people (being victimized).”
On other topics, Davi said: Read the rest of this entry »
Posted in: Policy, politics & regulation • Top tale • department of real estate • industry | 12 Comments »
November 4th, 2009, 11:21 am by Jon Lansner
The Federal Reserve today said it’ll keep its interest rates at practically zero while noting it found a pulse in real estate …
Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to pick up. Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales.
Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
Worry brews in some circles that too much cheap money — the Fed last raised the key “Fed Funds” interest rate its control in June 2006 — heightens the risk of future asset bubbles and broader extreme inflation.
The Fed's 'cheap money' policies should ...
Lansner on Real Estate’s most-popular October postings …
- 16 OC hotels in deep financial distress
- Corona del Mar home on TV’s ‘Million Dollar’ show
- OC renters enjoy 3rd biggest US rent cuts
- Investor loses $50 million on Santa Ana office tower
- Hear why this guy saw home-price crash coming
- OC sent 60,000+ erroneous property tax bills
- $3 million price cut sells TV-featured OC mansion
- Top Calif. home price gains in 3 OC cities
- $38 million bay-view home is 2nd priciest OC listing
- Calif. house prices projected to jump 7.9%
- OC builder gets $206 million loan from Neverland savior
- UCLA sees 16% OC home-price gain in 2010
Posted in: Fed Follies • Polls • industry • interest rates | 38 Comments »
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