Monday, June 30, 2008

Low Hanging Fruit

Seth Godin gives some good advice for retailers and the rest of us.

Thursday, June 26, 2008

Existing Home Sales Dip 16% in May

Sales of existing homes in May fell 15.9% from the same month last year to a seasonally adjusted annualized rate of 4.99 million units, according to the National Association of Realtors. Even though about a third of the sales last month were short sales that reflected foreclosures or distressed properties, there were some signs of shallowing distress. The difference between last year's sales rate and this year's has dropped for four consecutive months, from 23% in February to just under 16% last month.And the existing sales to date have also closed ground, from running 30.3% behind in February to just 19.1% in May, with 1.882 million units sold.
However, the slump still has a ways to go before bottoming out, and warmer weather did not bring any upswing; the May sales rate lags about 1% behind February's pace.
May's existing home median sales price was $208,600, down 6.3% from the same month in 2007. At the present sales pace, there is a 10.2-month unsold inventory.

Signs of the Times

Residents of St. Paul, MN are being asked to limit wastewater discharges from dishwashers and washing machines because a part of the city's sewer system has collapsed.

And Pennsylvania is facing a $20 billion shortfall affecting its drinking water and waste water systems. (Courtesy US Water News.)

Wednesday, June 25, 2008

Ammonite lav sink

Way cool. Via materialicious.

May New Home Sales Down 40%

Sales of new single family homes fell 40.3% in May from the same month last year to a seasonally adjusted annualized rate of 512,000 units, according to the Census Bureau. Through the first five months of 2008, some 236,000 new single family homes have been sold, down 37.1% from the same period of 2007.
Median sales price of a new home in May was $231,000, down 5.7% from the same month last year. At current sales rates, builders have 10.9 months of unsold inventory; in May 2007 they had 7.8 months' worth.

Tuesday, June 24, 2008

Appliance Golf

Reuters reports on the "sport" of appliance golf, seen here, which consists of bashing refrigerators, washers and the like with sledgehammers.

S&P Home Price Index Down 15% in April

Through April of 2008, the Case-Shiller Composite-20 Home Price Index is showing a 15.3% decline in single family home prices from prices a year ago. The measure from Standard & Poor's finds that 12 MSA's around the country have now shown home price declines for eight consecutive months. Las Vegas and Miami are the two weakest markets; home prices have dipped nearly 27% in each.

June Consumer Confidence Hits New Lows

The Conference Board's Consumer Confidence Index dropped to just 50.4 (1985 = 100) in June, less than half of what it was in June of 2007. The Expectations Index portion of the survey slipped all the way to 41.0.
Said Lynn Franco, Director of the Board's Consumer Research Center: "This month's Consumer Confidence Index is the fifth lowest reading ever. Consumers' assessment of present-day conditions continues to grow more negative and suggests the economy remains stuck in low gear. Looking ahead, consumers' economic outlook is so bleak that the Expectations Index has reached a new all-time low. Perhaps the silver lining to this otherwise dismal report is that Consumer Confidence may be nearing a bottom."
Just 8.8% think business conditions will improve over the next six months, while 33.9% think they will grow worse. Just 12.3% expect their incomes to increase over that span.

Thursday, June 19, 2008

Ed Pell Discusses the History of Kitchens

With lovely and charming Elaine Mikk of Cabinet Discounters on her radio show Home Innovations, now marking its tenth anniversary. Give a listen.

Two Bear Stearns Managers Arrested

Reuters reports the Feds nabbed them this morning for their roles in the mortgage crisis.

Update: The Wall Street Journal posts a copy of the indictment. Pages 7-8 have the meat:
Starting at least by March 2007, CIOFFI, TANNIN and others believed that the Funds were in grave condition and at risk of collapse. Rather than disclosing the true state of the Funds to investors and lenders, thus allowing an orderly wind-down of the Funds, CIOFFI and TANNIN agreed to make misrepresentations in the ultimately futile hope that the Funds' bleak prospects would change and that their incomes and reputations would remain intact.
On June 9, 2007, when the Funds' collapse was imminent, CIOFFI stated that, "[ilf I can't [turn the Funds around] I've effectively washed a 30 year career down the drain."
25. In executing their scheme, as detailed below, CIOFFI and TANNIN, together with others, misrepresented or omitted material facts in communications with investors and lenders about a variety of topics, including the financial prospects of the Funds, their opinions regarding the financial prospects of the Funds, their personal investments in the Funds, the Funds' investor redemption requests, the Funds' liquidity picture, and the Funds' exposure to the subprime mortgage market.

Second Update: Reuters says almost 300 other people have also been arrested.

Tuesday, June 17, 2008

Appliance Sales Flat For Major Dealers in 2007

Twice Magazine's Top 100 Appliance Retailers Report finds that white goods sales for those companies dipped just 0.3% in 2007 from 2006 to $25.03 billion.
Says the report,
"Smaller independent dealers regained lost ground, the report shows, supporting claims of market share gains by the major buying groups.
Also weathering the storm were retailers that cater to the carriage trade, operate outside the hardest-hit real estate markets, or have limited exposure to the builder channel."

Sears led the group with $8.3 billion in major appliance sales, down 7.3% from 2006.

May Starts Plummet 32%

May brought no relief to builders, as housing starts plummeted to a seasonally adjusted annualized rate of just 969,000 units, according to the Census Bureau, 32.1% below the pace for May of 2007. Single family starts crashed to just a 674,000-start rate, down 41.2% from May, 2007 levels. Those figures are the lowest posted in 17 years.
Through five months of 2008, just under 412,000 homes have started, down 30.6% from the same period of 2007. Slightly more than 289,000 single family homes have been started over that span, down 40.1% below the first five months last year.
Permit numbers were also anemic. Building permits were issued at a seasonally adjusted annualized rate of just 969,000 units in May, down 36.3% from the same month last year, while single family permits were issued at a rate of 623,000 units, down 41.4%.

McGraw Hill Sees 31% Drop in Single Family Homes

From MarketWatch: Spending on single family homes will be down 28% in 2008, units down 31%.

Inquiring Minds Want to Know

Haven't you always wondered what would happen if you put a ping-pong ball, soap, or a lava lamp in a microwave oven and turned it on? Not to mention 17 other items.
Wonder no more.

Monday, June 16, 2008

May Kitchen Appliance Shipments Dip Just 5%

Nearly 3.3 million kitchen appliances were shipped in May, just 5% under the number shipped in May of 2007, according to the latest figures from AHAM.

For the first five months of this year, kitchen appliance shipments are down 10.3%, to nearly 15.8 million units.

For the month, electric ranges, conventional wall ovens and cooktops were off 12.9% from May, 2007 to 401,500 units shipped; gas cooking appliances slipped 16.5% to 210,800 units shipped; and microwave ovens and ranges were up 8.6% to 913,800 units shipped.

AHAM recorded 822,400 refrigerators shipped during May, down 3.7% from the same month last year; 490,000 dishwashers shipped, a 10.8% drop; 420,900 disposers shipped, a 10.3% drop, and just 5,700 compactors shipped, down 35.2% from shipment levels for May, 2007.

Something Not to Miss

The Washington Post offers a three-part analysis of the mortgage crisis.
An excerpt: "Some brokers ignored the balance. Connelly began to hear about loan officers who charged low-income borrowers fees of as much as 5 percent of the loan or got a kickback by tacking extra percentage points to the interest rate on a mortgage. "Many borrowers are overwhelmed by the sheer volume of paperwork, disclosures, etc., and they're just not equipped to fully understand," he said. "There were half-truths and downright lies and severe omissions."
A mortgage lender could hire practically anybody. "It's not rocket science," Connelly would tell new hires, such as the busboy who quickly traded in his Toyota Tercel (value: $1,000) for a Mazda Miata sports car (value: $25,000). Pinnacle was running out of office space, forcing some loan officers to work on window ledges or out of their cars."

Friday, June 13, 2008

Brookfield Buys Maax for $225 Million Plus in Debt

The Canadian Press is reporting that bath manufacturer Maax is being acquired by Brookfield Bridge Lending Fund Inc., its senior lender, for the outstanding debt of $225 million plus.
It had been sold by the founder in 2004 for $640 million.
The third largest manufactuer of tubs, spas and showers in the United States, Maax lost $180 million on revenue of $411 million in 2007.

May Foreclosures Up 48%

From Yahoo News: "Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48 percent from 176,137 in the same month last year and up 7 percent from April, RealtyTrac Inc. said.
One in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second-straight monthly record."

Thursday, June 12, 2008

Best Advice

Retail Contrarian gives some great advice for retailers.

Tuesday, June 10, 2008

Getting Consumer Attention

Almost 87% of NKBA dealer-members plan to add or update displays in their showroom over the next 12 months. Hope you're planning to promote that change to your local market.

Above you see the way IKEA is promoting its expansion into Brooklyn's Red Hook district, a portable display designed to look like a giant IKEA carton.

Here's an amusing blog report on it.

Friday, June 6, 2008

Scenes From the Mortgage Crisis, Round 10

Evander has been kayoed.

May Construction Employment Falls 5%

Construction employment in May fell 5.1% from the same month last year to a seasonally adjusted 7.26 million workers, according to the most recent figures from the Bureau of Labor Statistics. Residential construction employment fell 10.5% in May to 862,900 workers, and residential specialty trade employment dipped 9.3% to just under 2.10 million workers nationwide.
Weekly wages for construction in May climbed 1.6% over last year to an average of $832.60, and hourly wages for construction workers were up 3.5% to an average $21.57.

Cel-e-brate Good Times...Come On!

June has been declared National Homeownership Month.
Is too!

Sex, Lies and Foreclosures

From the New York Times (who said it was staid?): "One of their homes caused a scandal when it was featured in the local newspaper as being used for sex parties promoted on the Internet. (The report said that some partygoers had to pay a fee, but that others had been admitted free in return for agreeing to allow the party organizers to use videotapes of their party activities.)
The Hopps protested that was not their fault, that a tenant had organized the parties without their knowledge. Simply renting out the house was a violation of the terms of their mortgage, but the lender, Countrywide Financial, evidently did not notice. A month after the scandal broke, it gave the couple another million-dollar loan to buy a house four miles away."

Thursday, June 5, 2008

6% of Mortgages in First Quarter Were Delinquent

The delinquency rate for mortgages in the first quarter hit a record 6.4%, according to the most recent figures from the Mortgage Bankers Association. That figure does not include loans on which foreclosure has begun, which made up another 2.5% of all U.S. mortgages. Both figures are the highest since 1979.
Adjustable rate mortgages made up 39% of the first quarter's foreclosures. More than 60% of the quarter's foreclosures were in California, Florida, Arizona and Nevada.
The slim silver lining for this cloud is that 20 states saw declines in the number of foreclosures during the first quarter.

April New Homes Sales Down 42%

Sales of new homes in April fell 42% from the same month last year, to a seasonally adjusted annualized rate of 526,000 units. Through the end of April, about 196,000 new homes have been sold, 38.6% below sales for the same period of 2007.
At the current sales pace, there is an unsold inventory of homes that would last 10.6 months.

The Itty Bitty Kitty Committee


Wednesday, June 4, 2008

And for the First Fifty Who Call, a Set of Steak Knives Absolutely Free!

Via the blog Big Picture, a West Coast developer holds a two-for-one sale of new homes.

And yes, it appears to be real.

Mounds of delicious cole slaw in seconds!

More News I Wish I hadn't Heard

The latest jobs report from Challenger, Gray & Christmas finds that planned layoffs by U.S. companies in May passed the hundred-thousand-worker mark, 46% higher than the number of planned layoffs in the same month last year.

Scenes From the Mortgage Crisis, Part Next

The Milwaukee Journal Sentinel outlines how a developmentally disabled worker who makes $9.25 per hour got saddled with a $103,500 mortgage for a house worth $63,000 that he didn't know he was buying.

Scenes From the Mortgage Crisis, Part Next

The Wall Street Journal reports that Ed McMahon (yes that Ed McMahon) is being foreclosed upon because he can't afford the mortgage he got. McMahon is 85 and broke his neck 18 months ago.

Tuesday, June 3, 2008

Consumer Confidence at 16-Year Low

The Conference Board's Consumer Confidence Index dropped in May to 57.2 (1985 = 100), 47.3% below the mark for May of 2007.
Said Lynn Franco, Director of The Board's Consumer Research Center: "The Consumer Confidence Index now stands at a 16-year low. Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers' confidence in the overall state of the economy. Consumers' inflation expectations, fueled by increasing prices at the pump, are now at an all-time high and are likely to rise further in the months ahead."
Franco says she sees little likelihood of a turnaround in the immediate months ahead. More than a third of consumers responding said they thought business conditions would get worse over the next six months.