Tuesday PM October 16th, 2007
by: Ed Mayberry, October 16, 2007 5:10:00 am
The decline in real estate sales experienced in September was the largest in more than a decade, according to the Houston Association of Realtors. Houston remained ahead of 2005 in terms of sales and pricing, and its inventory of homes relative to sales is still well below the average of the past ten years. Total property sales registered 5,984 for the month—a 16.7 percent decrease compared to the same month last year. Properties sold reached more than $1.2 billion—an 11.9 percent decrease compared to September 2006. But the median home price for a single-family home reached $150,500, which was a 0.3 percent rise, and the average price of $202,963 is a two percent rise.
A fresh check of sentiment in the home building industry finds a new record low. The National Association of Home Builders says its Housing Market Index has dropped two points to 18. That's the lowest level since the index began in January 1985. It is the eighth straight monthly decline. The index tracks builders' perceptions of conditions and expectations for home sales over the next six months.
D.R. Horton says orders for new homes fell 39 percent and cancellations rose in the last quarter. The slump in the nation's homebuilding industry continued into September after a weak summer. Dallas-based Horton says it took orders for nearly 6,400 homes worth $1.3 billion in the quarter that ended September 30th. One year ago, orders topped 10,400 homes worth $2.5 billion. Horton's cancellations hit 48 percent--more than twice the normal rate and up from 38 percent in the spring. Chairman Donald Horton says he's expecting the housing market "to remain challenging.''
Treasury Secretary Henry Paulson is calling for an aggressive response to the housing slump. He says it poses a significant risk to the economy. Paulson says the government and the financial industry should provide immediate help for homeowners trying to refinance mortgages before they reset at higher rates. Speaking at Georgetown University Law School, the treasury chief also calls for an overhaul of mortgage lending laws and regulations to halt abusive practices.
The head of the Federal Reserve sees clouds on the economic horizon. Ben Bernanke is warning that a deepening housing slump probably will be a "significant drag'' on economic growth into next year. And Bernanke told the New York Economic Club that it will take time for Wall Street to fully recover from a painful credit crisis. Bernanke said that the Fed will "act as needed'' to help financial markets function smoothly and to keep the economy and inflation on an even keel. The speech was Bernanke's most extensive assessment of the country's current economic situation since the August turmoil unhinged Wall Street.
Houston's office leasing market posted another healthy quarter, according to Grubb & Ellis, registering 764,649 square feet of positive absorption in the third quarter. This marks the fourth consecutive quarter that Houston's office leasing market has recorded positive absorption. Houston's overall vacancy fell by 30 basis points to 12.4 percent—down 3.7 percentage points from the year ago quarter.
Cigna Healthcare of Texas and Kelsey-Seybold Clinic are offering a new health maintenance organization priced ten percent below Cigna's comparable products. The HMO will roll out on January 1st, hoping to bring Kelsey-Seybold's clinic model to small and midsize companies. Kelsey-Seybold's CEO expects to see the number of patients in the system to double to 30,000 within a year. It employs 300 physicians at 18 clinics around the Houston area.
A company laptop computer containing confidential information about 159,000 current and former employees has gone missing, according to Administaff. The computer contained names, addresses and social security numbers of workers serviced by the company in 2006. The Houston firm provides human resources to small- and medium-sized businesses. The company is offering a year of free credit-monitoring services and assistance if fraud is uncovered.