Debra Borchardt's blog

Every house has a story. Some happy and some not so. One house in my neighborhood has the not so happy story. Here it is.

Who said housing numbers can't be fun? Here's a fun link that tracks the housing market and links it to riding a rollercoaster.

It didn't take long for the trickle down theory to work. The housing slump has finally hit cities where it hurts the most. Taxes.

The Charlotte Observer began a series of articles earlier in the month of March that questioned Beazer Homes (NYSE: BZH) and their lending practices. It seemed like there was an unusually high amount of foreclosures going on in the Beazer Homes.

Lennar Corp, one the the country's largest homebuilders reported today that it's profits dropped 73%. They are also saying that spring doesn't look like it's going to pull them out of this mess. Not only that, the company says it won't even issue a financial forecast. Wow!

So, my neighbor has once again put her house up for sale. This time, she went to the hardware store and bought one of those "For Sale By Owner" signs and stabbed it into her front yard. I guess she knows something all those expensive real estate agencies don't know.

The housing market can’t catch a break. The Commerce Department released building permit numbers and they continue to drop. Builders have to apply for permits before they can build. If a lot of building is expected, then the permit numbers will rise. It’s considered a good gauge of the temperature of the market. It looks like the temperature is as cold as the weather.

It’s long been known that insiders know when to sell and when to buy. There’s nothing illegal. The only issue becomes if they sell before an important announcement. But there is no law that says they have to own stock in their company. Traders will even watch insider’s buys and sells for ideas. Was anyone watching Toll Brothers (NYSE: TOL)?

Like stealing candy from a baby. They don’t come right out and say it, but that’s essentially what you keep hearing from executives in the sub-prime lending business. “It was such easy money.” “The money was just rolling in.” The employees said, “We were paid so well,” as they pack their desk belongings into boxes. Ok, let’s see how this works. Lender gives money to people with risky credit in order to buy a house. Those people can’t make the payments and the loan goes into default. Lender suffers. Companies close. Shocking!

Which has fallen harder this week? The stock market or the housing market? The Commerce Department reported that sales of new homes dropped 16.6% last month. That is the sharpest plunge in 13 years. Not surprisingly, housing inventory levels rose to their highest point in three months. This news is coming on the heels of the worst day on Wall Street in 5 years.

What is it that Lowe’s knows that the rest of the market doesn’t? Last week, they reported a decline in their fiscal fourth quarter earnings citing the slowing housing market. Lowe’s (NYSE: LOW) is the consumer friendly version of home improvement stores as opposed to Home Depot that tries to appeal to the contractor and serious home repair persons. But their stock did not fall, instead it went up. Why? 2007 is not going to be so bad they say.

New to the web is a comedy series on flipping houses called Flipper Nation. If you aren’t familiar with the term “flipping,” it’s when people buy homes purely for the purpose of fixing them up and then selling them at a great profit. With the real estate market booming, many regular people have decided they are able to compete with the professionals. What a lot of regular people don’t realize is that people “in the trade” frequently give each other trade discounts, this is how they make money. Outsiders don’t know this and pay too much when they are renovating their flipper homes.

The big news in real estate this week was the purchase of Equity Office Properties (NYSE: EOP) by Blackstone Group for $39 billion dollars. It was an LBO reminiscent of the RJR Nabisco LBO made famous by the book Barbarians at the Gate. Although this story did not have as much intrigue, the numbers were astounding.

Gym’s and club rooms used to be the standard amenity to draw in condo buyers. Not anymore. The ante was upped to include kid’s amenities to draw in families. But that left out the young, rich and single crowd. Media rooms and lounges started to pop up in new condo buildings. Apparently that wasn’t enough either. Now we’re got the water-themed amenity. What’s that?

Group shower!