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The Ergo Group - Makers of Vivenda

Vivenda Real-Estate Newsletter

The news for real-estate residential and commercial development continues to be lackluster.  I have included an article on one of the nation's largest home builders selling 11,000 homes for immediate cash to show how some developers try to cope with the market-condition changes. Finally, I have included a little joke to celebrate the New Year. Happy reading and Happy New Year 2008!  You can also go to our website - www.vivendasoftware.com - to view additional information about the real estate industry and Vivenda.

  • Lennar sells-off 11,000 home sites
  • November new-home sales plunge to lowest level in more than 12 years
  • Home foreclosures hit record high in third quarter
  • A little laugh to end the year on a good note

Lennar sells-off 11,000 home sites

Lennar Corp. - the largest home builder in Southwest Florida - has formed a land investment venture with Morgan Stanley Real Estate to acquire, develop, manage and sell residential real estate, with Lennar selling properties valued at $1.3 billion to the venture for $525 million. The acquired properties include about 11,000 home sites in 32 communities throughout the country, consisting of land as well as partially and fully developed home sites in Florida, California, Colorado, Illinois, Maryland, Massachusetts, Nevada and New Jersey. As of Sept. 30, the acquired properties had a book value of about $1.3 billion for one of the nation's largest home builders. The deal generates immediate cash for Miami-based Lennar and is a continuation of the company's strategy of seeking to become a "near assetless home builder," Wachovia Capital Markets analyst Carl Reichardt wrote in a Monday report. "Such business models tend to post higher returns on capital, inventory turns and free cash flow relative to peers," the report said.

November new-home sales plunge to lowest level in more than 12 years

November sales of new homes plunged to their lowest level in more than 12 years, a grim testament to the problems plaguing the housing sector. The Commerce Department reported that new-home sales tumbled by 9 percent in November from October to a seasonally adjusted annual rate of 647,000. That was the worst showing since April 1995, when the pace of sales was 621,000. The sales pace for November was much weaker than economists were expecting. They were predicting sales in the weakest sector of the economy to drop by around 1.8 percent, to a pace of 715,000. The median sales price of a new home dipped to $239,100 in November. That is 0.4 percent lower than a year ago. By region, sales fell in all parts of the country, except for the West, where they rose. New-home sales dropped by 19.3 percent in the Northeast. They plunged by 27.6 percent in the Midwest and they fell by 6.4 percent in the South. However, sales increased by 4 percent in the West. Over the last 12 months, new-home sales nationwide have tumbled by 34.4 percent, the biggest annual slide since early 1991, and stark evidence of the painful collapse in the once high-flying housing market.

Home foreclosures hit record high in third quarter

Home foreclosures shot up to an all-time high in the third quarter, fresh evidence of the problems afflicting distressed homeowners amid the housing meltdown. The Mortgage Bankers Association in its quarterly snapshot of the mortgage market said that the percentage of all mortgages nationwide that started the foreclosure process jumped to a record high of 0.78 percent during the July-to-September period. That surpassed the previous high of 0.65 percent set in the prior quarter. More homeowners also fell behind on their monthly payments. The delinquency rate for all mortgages climbed to 5.59 percent in the third quarter. That was up from 5.12 percent in the second quarter and was the highest since 1986, the association said. Payments are considered delinquent if they are 30 or more days past due. The association's survey covers more than 45 million home loans nationwide. California and Florida -- the two largest states in terms of outstanding mortgages -- were key drivers in the increase in the national foreclosure rates, the association said. The two states together accounted for 33.7 percent of the subprime adjustable-rate loans that entered the foreclosure process in the third quarter. The two states combined also accounted for 42.4 percent of creditworthy "prime" adjustable-rate mortgages that started the foreclosure process.

A little laugh to end the year on a good note

In a crowded elevator, one man asked another, "How's business?" "Last year we sold 500,000 houses, 700,000 farms and 750,000 schools," came the reply. "This year we ought to do equally well and, in addition, sell 1,200,000 garages." As the elevator descended, there was heavy silence for a moment. Then someone spoke up indignantly. "Sir," he said, "I'm in real estate, and those figures are preposterous!" He didn't know that the man boasting about his business was the marketing director of a major toy company.