More on California Housing data

Marshall here, as Ed is busy sunning himself in the Bahamas, whilst I am stuck in snowy Denver!

It sounds as if JMP Securities has also read the California report that I discussed recently. This is the first outside source that I have seen respond to that report.

It is so ironic. I think that the blue collar areas that were the most in danger financially have been corrected, perhaps even over corrected and yet the markets are focused on other things even though, housing was always what America’s monetary and fiscal authorities were looking to cure for the financial system to stabilize.

Am I missing something or could this be what Gladwell calls his “tipping point”? Here is the key section of the report and a Bloomberg article to follow:

Separately, JMP Securities said unsold inventory in California is falling. “We surveyed and calculated the months supply for many cities around the country recently and found that all of California and a number of other cities are actually well below the national average and continuing to improve,” JMP analyst James Wilson said today in a note to investors.

California
Declining prices have lured more buyers in California cities including Stockton, San Diego, San Jose, Los Angeles and the Inland Empire area southeast of Los Angeles, Wilson said. “As California led the nation into the housing bull market in 2002 and into the bear market in 2005, so too should it lead us into stabilization and recovery,” Wilson said.

Bloomberg story here:

Homebuilders Up on Bullish Mortgage, Inventory News
2008-12-03 21:49:10.920 GMT

By Sharon L. Lynch and Bob Ivry

Dec. 3 (Bloomberg) — U.S. homebuilders including Hovnanian Enterprises Inc., Meritage Homes Corp. and Standard Pacific Corp., rose in New York after mortgage applications surged and a report said housing supply is tightening in California.

The Standard & Poor’s Supercomposite Homebuilding Index gained 9.1 percent. Hovnanian jumped 17 percent and Meritage 16 percent. Beazer Homes USA Inc., the builder that reported its eighth consecutive quarterly loss yesterday, climbed 28 percent as JMP Securities LLC raised its rating to “market perform” from “underperform.”

The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan jumped a record 112 percent last week to 857.7, the highest level since March, from 404.4 the prior week, according to today’s MBA report. The group’s refinance index skyrocketed 203 percent, while the purchase index rose 38 percent.

New home sales have steadily fallen since July 2005 to an annual rate of 433,000 from a peak of 1.4 million, according to the U.S. Census Bureau. Builders nationwide have suffered both from the decline in sales and from falling prices. The median new home price dropped to $218,000 in October from a high of $262,600 in March of last year.

Red Bank, New Jersey-based Hovnanian rose 32 cents to $2.16 at 4:15 p.m. in New York Stock Exchange composite trading. Bloomfield Hills, Michigan-based Pulte Homes Inc. gained $1.32, or 13 percent, to $11.14. Scottsdale, Arizona-based Meritage climbed $1.61 to $11.49. Irvine, California-based Standard Pacific rose 9 cents, or 5.5 percent, to $1.72. Atlanta-based Beazer rose 39 cents to $1.77.

Beazer yesterday announced its fiscal fourth-quarter net loss widened on higher tax charges to $473.9 million, or $12.29 a share, from $155.2 million, or $4.03, a year earlier. Chief Executive Officer Ian McCarthy predicted a net loss for 2009.

“We distinctly heard a death knell strike that the end was near for Beazer,” homebuilding analyst Vicki Bryan of Gimme Credit LLC wrote in a note to investors today.

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