Monday morning bits and pieces…

New Build Starts Down Again - According to figures from the U.S. Commerce Department, housing starts declined 22.5 percent from January. Builders said the decline is due to concerns over interest rates, energy costs, and tightened lending standards. At the same time, the Commerce Department reported an overall up-tick in builder confidence for the future – based upon what the Department really didn’t say.

Where’s the people go? - A recent report in Forbes Magazine listed the six most vacant cities (as of the end of 2010)

1. Orlando
Home vacancy rate: 4.3 percent
Apartment vacancy rate: 23.6 percent

2. Las Vegas
Home vacancy rate: 5.5 percent
Apartment vacancy rate: 13.5 percent

3. Memphis, Tenn.
Home vacancy rate: 4.7 percent
Apartment vacancy rate: 16.1 percent

4. Riverside-San Bernardino, Calif.
Home vacancy rate: 6.4 percent
Apartment vacancy rate: 10.4 percent

5. Dayton, Ohio
Home vacancy rate: 3.3 percent
Apartment vacancy rate: 26.4 percent

6. Phoenix
Home vacancy rate: 3.4 percent
Apartment vacancy rate: 15.5 percent

Nationwide, the single-family vacancy rate ended the year at 2.7 percent while rentals were at 9.4 percent.

The Forbes article asked the question, “Where’d all of the people go?” That’s an interesting question in general and I think it points to the size of our nation’s so-called “underground economy.” At least in my area there has been lots of investor buying of foreclosed properties and most of those properties are being bought as rental units. Those kinds of rental units don’t normally show up in the local real estate statistics, because the owners don’t use Realtors to list and rent them – they just stick a For Rent sign in the front lawn with a phone number on it. I suspect that many of the displaced people ended up in those homes and will be there for the next 2-3 years, rebuilding their credit scores.

Where’d the money go? – As reported in the Dow Jones Business News of last week - A congressional panel looking into where the money went that was allocated for helping distressed homeowners has concluded that much of it went nowhere. The Treasury Department allocated $45.6 billion for three major housing programs to help home owners, including the Home Affordable Modification Program (or HAMP), a refinancing program run by the Federal Housing Administration to aid underwater home owners, and a program designed to help hard-hit areas. But the Treasury Department only spent about $1 billion in TARP money for the foreclosure prevention effort, the panel noted. Amidst much Harump, Harumping from the Republican lead panel, increased oversight of the use of bailout money was promised, along with promises to do away with most of the programs and the Government Sponsored Entities (i.e. Fannie and Freddie). Democrats were appropriately unset at any mention of ending the programs and the GSEs.

Doing the civil suit shuffle – According to a story reported last week by the Associated Press, Federal bank regulators (the FDIC) reported that they are suing three former top executives of Washington Mutual, accusing them of allowing risky mortgage lending. In the civil lawsuit, the Federal Deposit Insurance Corp. accuses the three former executives of Washington Mutual Bank of risky lending practices that caused the bank to make mortgages "with little or no regard for borrowers' ability to repay them.” Well, duh! Wasn’t that what everyone was doing back then? Washington Mutual, which was the largest U.S. bank ever to fail, collapsed in September 2008. The former bank officials have released statements calling the lawsuit “baseless” and “political theater.” Of course it’s political theater, but maybe it’s as close to the perp walks that those clowns should be taking that we’ll ever get.