Mortgage and Housing at Seeking Alpha

• My Three Point Plan to Improve Housing: Modification Is Not Enough
  John Preston submits:

  In 1968, Paul Ehrlich wrote "The Population Bomb," a narrative predicting dire consequences to the world from uncontrolled population growth.

  I had the opportunity to hear him speak in 1971 at the University of Wisconsin. In his stock speech, he hid humor and wisdom in the phrase, "Never use a condom alone." Most of the audience chuckled at the obvious duality of the comment. Beyond chuckles, the point was that "multiple options" worked better than a single course of action.

  
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• Stimulus Plan Includes Tax Breaks: Stocks That Will Benefit
  Tom Armistead submits:

  An article in the WSJ has this little tidbit about the upcoming stimulus plan:

  As for the business tax package, a key provision would allow companies to write off huge losses incurred last year, as well as any losses from 2009, to retroactively reduce tax bills dating back five years. In effect, this would entitle companies to receive cash from the government that they otherwise couldn't have claimed.

  
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• Toll, Hovnanian Face NY Real Estate Market Crash
  

  Toll Brothers CEO Bob Toll (TOL) has been incredibly prescient in selling his company shares at the right time. In 2005, at the market peak, he sold $500 million worth of shares. He bought some back during the lows of 2008. His bid to sell 3 million shares now is a strong indicator that homebuilder stocks will continue to struggle this year.

  There is no sign of a let up in the housing slump, and now there are indications that homebuilders like Toll and Hovnanian Enterprises (HOV), which have significant investments in the NY area market, will be facing greater headwinds there this year. The NY real estate market has held up relatively well since the housing slump began.

  
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• Hovnanian: 15% Pop Doesn't Make It a Buy
  Microcap Speculator submits:

  I received a few emails regarding the high-volume spike in Hovnanian (NYSE:HOV), once a high-flying homebuilder and now a beaten down microcap with a market capitalization of only $144.51 million after yesterday’s surge.

  

  
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• Admissions of Spin at the NAR
  Paul Kedrosky submits:

  Whoa, guess what: Former National Association of Realtors chief economist David Lereah didn't entirely believe what he was saying about the wonders of the pre-bust U.S. real estate industry. It was, as he says, his job to put a positive spin on things.

  Q. Were you wrong to be so bullish?

  
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• Are Home Sellers' Price Expectations Really That Inflated?
  

  There’s a general perception that sellers have unrealistic expectations when listing their properties for sale – that a seller’s listing price for his home (the ask price) is often far above the eventual closed price. At this year’s American Economic Association conference in San Francisco this week, Frank Heiland from Florida State University presented his paper, “How Well do Individuals Predict the Selling Prices of their Homes?,” which provides some evidence that sellers do indeed overshoot, but in aggregate may not be as far off from the final sales price as is generally thought. The positive implications of measuring this overshooting are significant when modeling the current real estate market.

  The authors quantify this “seller vanity premium” (my choice of words) to a specific range. From the paper:

  
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• What's in Store for Regional Banks?
  Ira Artman submits:

  As we begin a year that I hope will be more benign than ‘08, let’s look at the past and possible future of community savings banks similar to those profiled in my prior piece – How The Fed’s Rate Cut Could Hurt America’s Small Banks. Specifically, community banks located near the Big Apple, “ground zero” for the 2008 financial crisis.

  This piece will:

  
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• Is Williams-Sonoma Going Downscale?
  

  In these troubled times, upscale home furnishings retailer Williams-Sonoma may be finding it burdensome to have consumers associate the company with Martha Stewart and her ilk. Company execs weigh in on real estate pressures, e-commerce, mall trends and IT spending.

  Key quotes from Williams-Sonoma, Inc.'s FQ308 conference call: (WSM)

  Mall decline: Moving over to a virtual store business model?

  
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• Little House on PIMCO?s Prairie
  Michael Steinberg submits:

  The Wall Street Journal, in “Would You Pay $103,000 for This Arizona Fixer-Upper?”, reports on how a 576 square foot house not fit for human occupancy wound up as a foreclosure on a triple-A rated PIMCO MBS. PIMCO’s never short for words Bill Gross and Mohamed El-Erian refused to comment for the Journal article. These are the people that advertise themselves as the “experts” endlessly on CNBC, and are always available for television comment and consultation on every potential move by the Federal Reserve and Treasury. PIMCO is held in such high esteem that they were chosen as one of the four managers for the Fed’s $500B Fannie Mae (FNM), Freddie Mac (FRE), Ginnie Mae MBS purchase program.

  The story starts with the $3,500 purchase of a suburban Phoenix home four decades ago by a woman who has been on various forms of public assistance for the last 13 years. The former homeowner admits that her weakness for hard liquor and gullibility for multiple cash-out refinancings lead to her downfall. In the end the house was in such disrepair that she gave up and moved to an apartment.

  
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• Will 2009 Bring Ring Three of the Financial Circus?
  Steven Hansen submits:

  2007 brought ring 1: The Housing Crisis.

  2008 brought ring 2: The Financial Crisis.

  
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