Toll gives Colorado a 'C'

In a conference call discussing F2Q07, CEO Robert Toll issues his grades for performance in various markets:

Thank you. San Antonio, I said we haven’t got our product up and running as we should yet, so it’s only a C market, but suspect it is really a B. Northern California averages to be a C market for us, though there are some pockets that are Bs and some that are Ds. California southern market is a C market for us. California Palm Springs is a C market for us. Arizona, other than for the new special Wingate Ranch community, I would rate as a D-minus. Vegas is definitely an F. Reno is an F. Colorado is a C.

So there you have it . And here's the end of the call:

Timothy Jones - Wasserman & Associates

Bobby, this is the best breakdown that anybody gives, but you have quite a bunch more Fs than you had the last time. Does that imply that the business -- which I think you are saying -- is the business at best is going downward. Is that a correct interpretation?

Robert I. Toll

Yes.

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Finally, here's Seeking Alpha's latest agglomeration of housing-related articles. According to RealtyTrac's sometimes maligned foreclosures ranking, Reuters reports that CO came in 2nd to NV in April with 1 foreclosure for every 314 HH's, while among cities, Greeley was no. 3 (1:165) and Denver no. 10 (1:236). Nationally, foreclosures were down 1% from a two-year high in March, and up 62% from a year ago.

Sales & Marketing at Four Season

A press release announces that Distinguised Group will market the 102 residences at the new Four Seasons in Denver. Here's the pitch:

Four Seasons Private Residences Denver will offer homeowners professionally-designed dwellings of distinction, access to the services and amenities of Four Seasons Hotel, and the best of the city's surrounding arts and culture, entertainment, retail and recreation on their door step. It will offer a mix of floor plans from one-bedroom pied-a-terres to two-level penthouse suites, and have the added convenience of a multi-level, underground parking garage. The Private Residences will begin on the 18th floor and extend to the 45th floor with some of the most spectacular mountain, front range and cityscape views.

In addition to the physical features of the Residences, owners will enjoy 24-hour Concierge service to fulfill their every need, as well as access to a dazzling array of services including in-residence dining and catering by renowned Four Seasons chefs, on-site dry cleaning and laundry, turn-down service, housekeeping, valet and limo service. The residents will also enjoy use of the in-house spa, pool and fitness center, owners' private lounge and a host of other amenities.


Here's the copy from the official website:

Your new, urban-oriented lifestyle of convenience and comfort is now available in Colorado's capital city.

Other world-class cities have had them for years: Luxury hotels that include ultra-exclusive private residences. Denver has never experienced this kind of personalized service and unparalleled access to such premium amenities in an urban address; until now.

Introducing Four Seasons Private Residences Denver. The newest landmark-and an amazing place to call "home."

For the first time, discriminating homebuyers can have it all: The ultimate in Four Seasons Hotel services with the comfort and privacy of personal ownership. Majestic views of the Front Range and high plains of Colorado with the convenience of sophisticated downtown living. All this packaged together with a level of care and amenities previously unavailable outside cities like Paris, London and New York.

A completely new tower of 45 floors and just 102 luxury suites of 965 sq. ft. up to 6,100 sq. ft., the Four Seasons Private Residences offers all the Four Seasons Hotel services, facilities, and amenities of Denver 's first Four Seasons Hotel to its residents. Located on the 4th through 16th floor, the hotel gives the tower's private residents unequaled access to all its many comforts and services on an as-needed basis.

Living here means just about anything you desire is but a phone call away. Need someone to detail your car or water your plants while you're away? Arrange and cater a party for 30 at the last minute? Schedule an herbal body wrap, manicure and massage at a spa just a few floors away? It's as simple as picking up the phone and speaking with your concierge, available 24-hours-a-day and every day of the week. It's like being a treasured hotel guest while never leaving your own home.

With this week's groundbreaking at Spire and hope that 1401 Lawrence will go forward, the 14th Street Corridor has the potential to transform Downtown Denver and its skyline with some buildings that will loom large, and more importantly, add hundreds of residents to downtown.

South Of Border

The LAT writes about the effects of the housing slowdown on Mexican immigrants working construction jobs. Nearly 3 million Latinos, 3/4 of them foreign-born, work in the U.S housing industry, according to the Pew Hispanic Center.

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The old adage, that a homeowner shouldn't be in the house when it's being shown to a prospective buyer, definitely applies in this case:

JANESVILLE, Wis. (AP) -- A couple who'd been checking out a house for sale in Janesville, Wisconsin got quite a shock. They found the 55-year-old homeowner dead in her bed.

Their real estate agent was standing in the dining room while Justin and Colleen McKeen walked through the home Monday night. She knew something was wrong shen she heard Mrs. McKeen scream.

The real estate agency listing the home says it had been on the market for a while. Authorities say they don't suspect foul play in the death of the home's owner, Linda O'Leary.

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Andres Duany talks abouts new urbanism [video]. A granny flat is a bedroom that has gravitated in the house so that it can be rented out. Planning departments, however, have vigorously stamped out this configuration as much as possible out of fear of duplex-ing a neighborhood and "overloading" a home.

Here's Duany's firms project tearsheet for Bradburn Village in Longmont (Colo.).

The Fed Stands Pat

Kiplinger writes that the "Fed Won't Ride to Housing's Rescue" as it keeps its eye on inflation. This concern stems from the Fed's belief that the economy may heat up during the second half of this year. The Federal Open Market Committee (FOMC) has conceded that the economy has weakened since it last met on Jan. 31, when it stated that housing had begun to stabilize. It more recently stated that "adjustment in the housing sector is ongoing", perhaps caught flat-footed by the unfolding subprime mortgage fallout. The Fed still isn't overly worried about the housing sector pulling down the broader economy. The Kiplinger article predicts that the 30-year fixed rate mortgage will increase from 6.1% to about 6.4% by the end of 2007.

Naples...Florida

A Businesswire story sings the praises of mixed-use development. First, it points out that this concept existed since the beginning of American cities in the 17th century, when, for example, there would be homes above small shops. Then, the segregation of land uses began in the 1920s, mainly in an effort to keep industrial uses away from residential and lighter commercial uses.

“The mindset of many Americans today is changing. They want to be in a place where there is activity, where they can walk to work, get a cup of coffee, enjoy community events and rely less on their cars,” said Jack Antaramian of Antaramian Development Group, a Naples, Florida-based company that specializes in mixed-use development.

Antaramian’s newest offering, Naples Bay Resort, encompasses three distinct locations within the City of Naples that together provide a variety of residential and commercial environs, each with its own unique character, including a state-of-the-art marina, a four-star condominium hotel, a 15,000 square-foot club that just opened, and waterfront shopping and dining. Renaissance Village, the third and final component of Naples Bay Resort, will have 300 luxury residences with up to 2,935 square feet of living space. Pre-construction pricing starts from the mid-$700s. Construction is set to begin in the summer. In addition to the luxury residences, Renaissance Village will also have over 200,000 square feet of commercial space, including a boutique grocery, restaurants, shops and office space. Additionally, Florida Gulf Coast University will locate its Naples Educational Center and Renaissance Academy there, which includes a 350-seat performance venue.

Keys to success:

“You need to be careful to have the right amount of retail and commercial uses and the right residential density,” said Matthew Kragh, partner of Architectural Network Inc., a Naples, Florida-based architectural and planning firm and the designer of Naples Bay Resort and Renaissance Village. “There needs to be a sense of cohesiveness and connectivity with the project’s surroundings. Renaissance Village is a great example of this with its mix of residential, commercial and retail. Plus the bonus of a performance venue and open spaces for community events in an open and ungated location. It’s important to see activity with people enjoying all the project offers.”

Some of the challenges of mixed-use development cited are the presence big box retail with vast surface parking lots and the need to build at much higher densities (than surrounding areas) in order for these projects to make sense financially.

For many of us, deciding where to live has a lot to with affordability. For ski/ride bums, this often entails couch surfing, living in closets or commuting to resort communities. The Town of Vail wants 30% of its workers live in Vail, which is about where it stands right now, but there is a concern that escalating rents and home prices will drive too many workers out of Vail. A story in the Vail Daily introduces an eight-year resident and Australia native who plans to move this year to New Hampshire since "rent these days is out of control". Vail's $1 billion Lionshead redevelopment will be subject to stricter affordable housing rules. Council Mark Gordon is pushing a program that purchases then sells "buy downs" to qualified buyers with ownership subject to deed restrictions.

State Houses

"Housing Slump Pinches States in Pocketbook" (NY Times, Apr. 7): "State tax revenues around the country are growing far more slowly this year and in some case falling below projections, a result of the housing market slowdown that has curbed voracious spending on real estate, building materials, furniture and other items... Nowhere is the downturn more apparent than in Florida, where tax revenue is projected to drop this year for the first time since the energy crisis of the 1970s... Those events not only threaten revenue streams for things like building materials and labor, but also affect spending on big-ticket items like cars and furniture, which many homeowners financed with home equity lines of credit... In one hint of how much Floridians were relying on property wealth during the real estate boom, 16 percent of new car purchases here were being made with home equity loans in 2006, compared with 7 percent nationally... In California, the percentage was even higher — about 30 percent, said Art Spinella, the firm’s president... Arizona, California, Florida and Nevada, the chief beneficiaries of the housing rush, are also expected to suffer disproportionately from the slump. From late 2005 to late 2006, existing home sales fell by 21 percent in California, 27 percent in Arizona, 31 percent in Florida and 36 percent in Nevada, the steepest drop in the nation... others expect the revenue lag to last two years at most, because with the exception of industrial Midwestern states like Michigan and Ohio, the economy remains relatively healthy.... Alan Greenspan, the former Federal Reserve chairman who has expressed worries about the housing market, has said he believes there is a one-in-three chance the economy will slip into recession in 2007.

Michigan's House of Representatives is fielding a bill that would provide property tax relief from the state's "pop-up tax".

Massachusett's Sec. of State is urging to Legislature to make foreclosures a little bit less automatic for those facing the possibility of losing their homes by forcing mortgage lenders to get permission from a local judge before seizing a foreclosed home.

Here's some in-depth info on Northern Colorado's housing market, primarily Mar. 2006 vs. Mar. 2007.

Las Vegas developer Jim Noteware takes a personal read on the direction of the Las Vegas residential real estate market in a series of essays.

I’ve come to the conclusion that the reason for the confusion, denial and dismay is that few local participants have previously been through anything like our current situation. The Las Vegas residential market has been so strong for so long that few know how to interpret and respond well to the new market signals they are receiving. Some are overreacting; some are not reacting at all. Very simply, few know how to behave and plan for the future when the old rules do not work as before... Three primary causes can be ascribed to the current real estate softness: overbuilding, media confusion and now, of course, buyer skepticism.

Yahoo and RealtyTrac have teamed up to beef up the search giant's foreclosure feature on its real estate page, which prominently features its mapping tools, including an option for a map-based search for foreclosures.

The Economist worries about overreach from legislators, many of whom are eager to score points with their constituents suffering from the sluggishness of the housing market in their home districts. In its characteristically dry tone, the magazine smacks at America's homeownership "fetish": Populist politicians may well make much of the contrast between a second house in the Hamptons and no house at all. Instead, they should stop making a fetish of homeownership. That people are free to borrow to buy their own home, should they wish, is fine. That politicians should encourage homeownership for its own sake is not. That they foster it with tax breaks, as they do in America, is daft.

CNN/Money link the housing slowdown to sluggish auto sales.

HUD is fielding more complaints, a 65% increase in 2006 vs. 1996.

For fiscal 2006, HUD said the basis of 40% of the complaints was disability, 39% was race, with familial status and national origin each accounting for 14%. Other reasons for complaints included sex, religion and retaliation. Complainants most often alleged discrimination in the terms and conditions of the sale or rental of housing, or refusal to rent.

HUD believes that this upsurge in complaints has resulted from its outreach and education efforts. Nonetheless, its staffing has been reduced by 20% since 1993.

In Austin, New Urbanism is arriving in the form of affordable homesteading at the cite of the city's extinct Robert Mueller Airport: Homesteaders adventurous enough to settle this new territory can register – through April 30 – to become one of the "Mueller Pioneers," the first 340 households to stake a claim at Mueller. Already, more than 4,500 Austinites enticed by the future New Urbanist community – on a 711-acre site east of I-35 near 51st Street that today looks like, well, an abandoned airport – have registered to receive information about possibly living at Mueller.

Meet Alt-A, the New Subprime

On Wednesday's page A2, the WSJ runs a story about continuing bad news surrounding growing late payments, not just among subprime loans but also Alt-A, the category between subprime and prime that doesn't typically require income and asset verification. Late payments in this category rose to 2.6% in Jan. vs. from 2.3% in December vs.1.3% in January 2006. Mark Zandi, the oft-quoted chief economist at Economy.com, predicts that median home prices will fall almost 5% this year, the biggest drop since the Great Depression. This appears to be a classic credit crunch in the work as lenders tighten standards, preventing some potential buyers from getting loans. Combined with rising foreclosure, the shrinking availability of credit looks to be putting downward prices on home prices. The next couple or few years could be ugly or uglier as some borrowers face "resetting" mortgages, i.e., higher payments. That said, not all markets are reeling. The last sentence of the article: "Prices are falling in some areas but still rising in others."

Today's WSJ Marketbeat runs commentary about "More Housing Pain". He quotes NAR's characteristically rosy David Lereah, who explains that the 8.5% drop in pending new home sales since last Feb. wasn't so good because of "unusually bad weather in February" [Hey, what about bad weather in Colorado circa Decemeber and January?]. Citibank's Lewis Alexander strikes a much more ominous tone: "The U.S. housing market faces considerable challenges, notably the overhang of unsold [and resale?] new homes, the tightening of lending standards for new mortgages, a and a substantial volume of adjustable-rate mortgages that should reset to higher interest rates over the next couple of years." Ouch!