The Best and Worst Places in the U.S. Real Estate Market, According to Lennar
Jersey and Florida are hot. Austin and Seattle are not. Tuesday, home builder
co-CEO Richard Beckwitt, during an earnings call, toured the US real estate markets. “So far in June, new orders, traffic, sales incentives and cancellations have worsened in many of our markets due to a rapid spike in mortgage rates and headwinds from negative economic headlines. “, did he declare. Some markets also experienced seasonal slowdowns.
Beckwitt listed 18 performing markets benefiting from low inventory, strong local economies, solid growth and immigration. “These include our six markets of Florida, New Jersey, Maryland, Charlotte, Indianapolis, Chicago, Dallas, Houston, San Antonio, Phoenix, San Diego, County ‘Orange and [California’s] Inland Empire,” he said.
Ten markets are in Category 2, with modest declines: Atlanta, Colorado, Charleston, Myrtle Beach, Nashville, Philadelphia, Virginia, Bay Area, Reno and Salt Lake City. “In each of these markets, traffic has slowed and we’ve seen an increase in cancellation rates,” he said.
Then there are the seven in category 3 – the localities with “greater market easing and correction”. On the list: Raleigh, Minnesota, Austin, Los Angeles, Central Valley California, Sacramento and Seattle. Austin had seen an appreciation of more than 40% for two years, and Seattle was a top U.S. market, he said. Minnesota has been hit by a lack of immigration, limiting the pool of home buyers.
As for Lennar itself, its quarterly earnings ended in May were better than expected and its shares closed up 11.3% for the week at $71.79, but are down 38% for the year.
Monday was a public holiday: June 16. Stocks rose Tuesday after a tough June, but fell as Federal Reserve Chairman Jerome Powell warned of recession in congressional testimony. But then, as key commodities like copper tumbled and the Fed crowd talked, sentiment improved and indices rallied on belief that the Fed might ease rates. The result: the first weekly gains in a month. During the week, the
Dow Jones Industrial Average
increased by 5.4% to 31,503.71; the
jumped 6.4% to 3912.15; and the
climbed 7.49% to 11,607.62.
fell to $17,628 over the weekend, sparking fears of leveraged crypto bets forced to liquidate. Crypto hedge fund Three Arrows Capital failed to make margin calls and a key stablecoin,
came under pressure. Bitcoin rebounded above $21,000 as the correlation to tech stocks faded. Crypto exchange FTX has bailed out struggling crypto lender BlockFi with a $250 million line of credit.
Gas, Firearms, Jurisprudence
President Biden has asked Congress for a three-month gasoline and diesel tax holiday. The tax is 18.4 cents per gallon for gasoline, 24.4 cents for diesel. Critics say the step will encourage driving and inflation. Separately, Congress passed the gun bill, even as the Supreme Court blocked New York state limits on carrying guns in public. A day later, the court struck down Roe v. Wade, 6-3.
The banks are testing
With the recession in the air, the Fed released stress test results, dropping all 33 banks. Banks can start posting details of new dividend and buyout policies on Monday.
Ukraine withdrew from Severodonetsk, as Russian forces advanced. Ukraine continued its counter-offensive in the south as both sides were near exhaustion. Russia continued to cut off gas supplies to Europe. Germany has reopened coal-fired power plants and signed an agreement with US natural gas supplier Venture Global. Russia threatened Lithuania, which said it would block sanctioned goods moving through the country to the Russian enclave of Kaliningrad, and carried out mock missile strikes near Estonia. The EU has accepted Ukraine for candidate status.
Annals of Deal Making
has increased its offer for
at $33.50 per share as Spirit weighed a competing offer from Frontier Group…
said it would acquire Clif Bar for at least $2.9 billion…
announced its split into three: the snack business (Pringles, Cheez-It, Pop-Tarts), which generates 80% of sales; the cereal activity, its original activity dating back 116 years; and a plant-based sales unit (Gardenburger, Morningstar Farms)…
said Friday it had agreed to be acquired by a buyout group including Hellman & Friedman and Permira for $10.2 billion. The software company had discussed a truce with activist Jana Partners and said it would not sell… The Food and Drug Administration has banned Juul vaping products in the United States.
The group invested $12.8 billion for 35% of Juul in 2018; it has since reduced that amount to $1.7 billion. Altria fell 4.2% for the week.
Write to Andrew Bary at [email protected]