Housing Doom Housing Bubble Blog

Yesterday was a good day for the bears, but there was such a blizzard of information it was hard to keep it all straight. The sidebar must have turned over at least once, so this post will mostly just try to capture links to a few of the stories covering some of the important themes. WireGuy P. Jackson was one of many writers [1] who posted [2] trying to make sense of number 16 (according to Implode-O-Meter) subprimer NovaStar Mortgage’s 4Q earnings reports released late Tuesday. After the company’s stock imploded on Wednesday, losing about a third of its value, NovaStar issued a press release [3] correcting the near-universal impression it had warned it would not have any profit to speak of until about 2011. The new story was they had been talking about not receiving taxable income profit, but still expected GAAP earnings. AP corrected [4] their own story in accordance with this clarification and given the massive stock-moves based on this nuance, litigation is certainly not out of the question. Be that as it may, there was certainly a stock event yesterday. My question: How many more subprimers will Go NovaStar when they lay their own new challenges on the table?

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Hat tip to the Judge, who sent me an article that temporarily confused me.  I was astounded when In Business Las Vegas was quoting the always bullish Dennis Smith as saying:

Don’t be surprised if some homebuilders "close their store" in Las Vegas this year.

I don’t often find myself agreeing with Smith- so I read on anxiously.  Unfortunately, he continued in a more familiar vein:

"It looks like it’s difficult for the builders to replace the lots they are absorbing," Smith said. "If a builder stopped buying land six months ago, they didn’t stop selling houses. Call any builder and it’s difficult for them to find land to buy for two or three years out."

Smith said he’s been sounding warnings about the lack of available land for traditional housing development in the Las Vegas Valley. About five ago, he said he suggested there was about a 10- to 12-year supply of land remaining within the Bureau of Land Management disposal boundary for a typical builder to develop a typical single-family subdivision. Today, if a single-family homebuilder is not participating in Summerlin, the Focus Property Group master plans in Henderson and Las Vegas or the new Olympia Group master plan in North Las Vegas, where are they going to go to acquire any large number of lots to position them for the future?, Smith asked.

I’m a little confused here- even Smith indicated that Centex has walked away from a deal in Henderson, which would indicate more land than they need.  Then there’s all of those MSM stories of homebuilders not exercising options, selling land and writedowns:

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