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Home Foreclosures on the Rise MoneyNews
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Apparently, 2005 wasn't a very good year for Americans trying to hang on to their homes. A new study from RealtyTrac says that U.S. home foreclosures rose in every quarter of 2005, with almost 847,000 home properties going into foreclosure for the year. The data also shows a 25% hike in new foreclosures from the first through the fourth quarters. "Overall U.S. foreclosure numbers climbed steadily over the course of the year, with more new foreclosures reported in every quarter," said James J. Saccacio, chief executive officer of RealtyTrac.
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"This trend appears to be moving the real estate foreclosure market back to its historic levels." Saccacio does temper his comments, noting that even at 850,000 properties in foreclosure for the year, that only represents 1% of all U.S. households. And RealtyTrac says that Florida led the country in home foreclosures. The Sunshine State accounted for 14% of all U.S. foreclosures in 2005, while Colorado was a distant second, at 1.6%. Other states with foreclosure rates ranking among the 10 highest nationwide were Georgia, Arizona, Indiana, New Jersey, Ohio and Tennessee. "Over the past few years, we've seen historically low mortgage rates, consistently escalating home prices and steady, strong employment," Saccacio said. "This has translated into relatively low levels of foreclosure properties - particularly bank-owned properties. With interest rates rising and an apparent slowing of property valuations in most markets, we'll be watching closely to see if there's a material effect on the number of foreclosures in 2006." The company also projects over 100,000 new foreclosures in its January 2006 estimates. Says RealtyTrac: "103,540 properties nationwide entered some stage of foreclosure in January, a 27% increase from the previous month and a 45% increase from January 2005." The January estimates also say that foreclosures in the U.S. average out to one in every 1,117 households. Editor's Note:
2. Top Homebuilder: Speculators Flee Housing If there is a downturn in the American housing market, nobody seems to have notified Toll Brothers. The Pennsylvania-based firm posted a 49% rise in first-quarter earnings with net income climbing to $163.9 million, or 98 cents a share, as revenue jumped 35% to $1.34 billion. Company CEO Robert Toll reports that while Toll Brothers enjoyed a boom quarter, real estate speculators have more or less stopped "flipping" homes in search of quick and easy profits. "Speculative demand has ceased and speculators are now putting their homes back on the market," Toll said in a statement. "The result has been more supply than demand in some regions." He added that some regions of the U.S., like Washington, D.C., still have to work through their excess supply before local real estate trends begin to climb back upward. "Once that surplus moves off the market, large builders such as Toll, with sizable land banks, should prosper although Toll will continue to face tough comparisons with last year over the next couple of quarters," he said. For the quarter, Toll Brothers built 1,978 homes. That's up from 1,653 for the corresponding quarter in 2005. "The company said it expects to deliver between 9,200 and 9,900 homes for fiscal 2006, versus the previous forecast of 9,500 to 10,200 homes," reports CBS Marketwatch. "The earlier estimate came down from the initial forecast of between 10,200 and 10,600 homes, which Toll backed away from in November." Editor's Note:
3. Huge Asian Sales Boost Airbus, Boeing Airbus dominated the buzz at this week's Asian Aerospace trade show in Singapore with a slew of big passenger-jet orders and a new operations pact with South Korea. "Airbus said Thursday that it has received orders this week for a total of 40 A320 planes from two budget airlines, Indonesia's Adam Air and India's GoAir," the Associated Press reported Thursday. "The A320s have a list price of about $70 million each, so the order would be worth some $2.8 billion." The French aviation company says that the Asian market is a burgeoning one for its A320 aircraft. The orders "highlight the outstanding popularity that the A320 family has enjoyed with established and startup low-cost carriers, including in the Asia-Pacific region," Airbus said in a statement. Airbus also announced new pacts with state-run Korea Aerospace Industries Ltd., which are worth more than $1 billion. The series of deals will enable Airbus to develop new A350 planes and manufacturing components for A321 aircraft in South Korea. The company also announced a new agreement with India to sell 43 A320 and A319 jets to New Delhi-based domestic carrier Indian for $2.5 billion.
Bloomberg reports that Airbus is also in talks with Russia to develop $25 billion worth of new aircraft for the country. The deal would produce about $1 billion per year in revenue for Russian companies through 2030, including $20 billion for the development of a new passenger plane, $3 billion in parts orders for Airbus' new A350 airliner and $2 billion for converting single-aisle passenger planes into cargo carriers, Airbus said in a statement.
Earlier in the week, Boeing got into the act, signing a new pact with Indian carrier Spicejet that has the aviation giant selling 10 737 planes with an option for another 10 aircraft. If all 20 are sold, the deal could be valued at $1.4 billion.
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