Some MarketWatch news from Wall Street and Washington. MarketWatch, "U.S. home builders have slashed their prices by a record amount, but sales still plunged by 8.5% to a 17-year low in March, the Commerce Department estimated Thursday. The decline in new-home sales to a seasonally adjusted annual rate of 526,000. New-home sales are down 36.6% compared with a year ago and are down 62% from the peak in July 2005. February's sales pace was revised lower to 575,000 from 590,000."

"The figures likely overstate the number of sales because they don't account for canceled sales, which have ballooned. with sales plunging even faster, the supply of homes on the market rose to 11 months, the most in 27 years."

"Inventories are likely understated as well because of canceled sales contracts."

"Median sales prices for new homes have fallen 13.3% in the past year to $227,600, the biggest decline in 38 years. Average sales prices are down 11.3% to $292,200, the biggest drop since the record book begins in 1963."

"Sales fell in all four regions, dropping 19.4% in the Northeast to a 27-year low, falling 12.9% in the West to a 17-year low, falling 12.5% in the Midwest to a 27-year low, and slipping 4.6% in the South to a 12-year low."

From CNN Money. "'The explosion of single-family building permits in 2003 to 2005 produced an unsustainable, unprecedented run-up in the building economy,' said National Association of Home Builders chief economist David Seiders."

"But when the housing market crashed, new housing permits 'fell off a cliff,' according to Seiders, returning to levels not seen since the 1991 recession. That left a huge glut of unoccupied new homes on the market without many potential buyers."

PR Newswire. "Pulte Homes announced a net loss of $696.1 million for its first quarter ended March 31, 2008. The first quarter 2008 net loss included $663.6 million of pre-tax charges related to inventory impairments and other land-related charges. Impairments and land-related charges for the prior year quarter were $132.1 million. Consolidated revenues for the quarter were $1.4 billion, a decline of 23%."

"Net new home orders for the first quarter were 5,402 homes, valued at $1.5 billion, which represent declines of 36% and 50%, respectively, from prior year first quarter results."

"'The difficult housing environment continued to erode during the first quarter of 2008, said CEO Richard J. Dugas, Jr. 'Buyer demand for new homes continues to be soft, home prices remain under pressure, and overall buyer confidence is weak.'"

From Reuters. "Ryland Group Inc, the No. 8 U.S. home builder, said on Wednesday its quarterly loss widened, citing fewer sales, lower margins and higher selling and other costs. Ryland's quarterly results include charges for write-offs for inventory and property values of $27.4 million."

"Home-building revenue for the Calabasas, California-based home builder fell 42.2 percent to $399.6 million, as sale closings fell 33 percent to 1,543 homes and the average selling price fell nearly 14 percent to $257,000."

"Gross profit margins were 11.9 percent before the charges compared with 18.7 percent in the same period a year earlier. New orders during the quarter fell 27.8 percent to 2,159 and their value fell 39.7 percent to $526.4 million."

"M.D.C. Holdings, Inc. today announced a net loss for the quarter ended March 31, 2008 of $72.8 million, which included pre-tax charges of $54.8 million for asset impairments and $1.7 million for write-offs of deposits and pre-acquisition costs associated with land option contracts the Company does not intend to pursue."

"Paris G. Reece III, MDC's chief financial officer, said, 'As has been the case in each of the last five quarters, the impairments this quarter primarily occurred in our West homebuilding segment, with almost 90% applicable to subdivisions in our Arizona, Nevada and California markets. Over the last seven quarters, we have impaired approximately 60% of the 13,100 lots we owned at the end of our 2008 first quarter."

"Reece continued, 'We reduced our lots owned, excluding lots with homes completed or under construction, by 13% in the first quarter alone. We accomplished this reduction in large part through the sale of more than 800 lots primarily located in Arizona and California. While these land sales had little impact on our book income for this quarter, they contributed almost $30 million in proceeds and generated a tax loss in excess of $70 million.'"

"The Company closed 1,136 homes and produced home gross margins of 11.5% in the 2008 first quarter, compared with 2,001 home closings and home gross margins of 15.8% for the same period in 2007. The average selling price for the 2008 first quarter was $313,200, down $42,500 year-over-year.'"

From Bloomberg. "Rolling Meadows-based Kimball Hill Inc. and 29 affiliates have filed for Chapter 11 bankruptcy protection as demand for new homes tumbles. Kimball Hill sells houses in California, Illinois, Florida, Texas and Las Vegas."

"'Today's decision was difficult to make, but we believe it is in the best interest of all of our stakeholders,' Ken Love, Kimball's CEO, said in a statement."

"Kimball Hill, now the second-largest builder in bankruptcy, announced Feb. 27 that it was exiting the Florida housing market due to increased home inventories and foreclosures there. Kimball joins at least a dozen homebuilders that have filed for bankruptcy since June."

The Associated Press. "Credit Suisse Group on Thursday posted a loss for the first quarter as the global effects of the U.S. subprime mortgage crisis continued to spread. Switzerland's second-largest bank said it had net write-downs of 5.3 billion francs ($5.3 billion) for big buyout loans and mortgage securities."

"Ambac Financial Group Inc. posted another steep loss for the first quarter on Wednesday as turmoil in the bond market pummeled the value of many of the bond insurer's deals. The company has lost almost $5.3 billion in the last nine months."

"The New York-based insurer recorded $1.73 billion in losses on a book of contracts promising to cover missed payments on complex investments backed by home loans."

"The contracts Ambac is recording losses on insure sophisticated investments known as collateralized debt obligations. Because these investments derive some of their payments from mortgage bonds, the insured CDOs suffered from 'dramatically lower' prices in the first quarter, especially in March."

"Ambac set aside $1 billion preparing to pay claims on defaulted mortgage debt.'

The Sun Herald from Australia. "After a record-breaking boom last year house prices across Victoria are falling. A report by the Victorian Valuer-General released yesterday reveals the median house prices in Narre Warren North have had the biggest fall dropping by 24.5 per cent from $570,000 down to $430,250, while Surrey Hills dropped by 14.4 per cent from $1.1 million to $943,000."

"Geelong median house prices fell by 8 per cent from June to September last year, and Yarrawonga house prices dropped by 10.5 per cent."

"Property prices in seaside towns also declined with prices in Inverloch falling 13 per cent from $305,000 to $288,000 and the price of a home in Anglesea falling by 9.7 per cent from $440,000 to $420,000."

The Sydney Morning Herald from Australia. "The big residential developers will be pleased that Barry Goldman, principal of the real estate agency Portfolio Realty, has said that Sydney property has become a buyer's market."

"Mr Goldman said that while prices in some outer areas of Sydney would continue to fall in the next 12 months, across the Sydney metropolitan area they would grow 10 per cent, with higher gains in the central business district and eastern suburbs."

"'The areas close to the CBD are like a pressure cooker with a shortage of stock and strong demand, especially from professional people who are property-savvy. Prices have not fallen there and it is absolute rubbish to suggest prices will fall by 30 per cent or more over the next few years,' Mr Goldman said."

"'I believe there will be upward pressure on values very soon as interest rates fall, so the time is ripe to buy either apartments or houses. The lack of supply of new dwellings … will guarantee price increases in the longer term,' he said."

The Globe & Mail from Canada. "Canada may not have the sizable subprime market of the U.S., but the engine behind the country's housing boom has been increasingly leveraged first-time buyers. Nearly two-thirds of buyers in major centres now favour extended amortization periods of up to 40 years, while putting little or no money down was prevalent in 38 per cent of regional markets surveyed across Canada."

"The findings raise questions about what's been driving soaring house prices in recent years. 'The reason we think the market has been staying hotter much longer than anyone anticipated was because of these newer amortization mortgages,' said Craig Alexander at Toronto-Dominion Bank. 'Because it really does change the affordability equation.'"

"'We're more vulnerable than we were in the past, and I think that's just a factor of financial and mortgage innovation,' said Adrienne Warren at Bank of Nova Scotia. 'At the same time, it's a trade-off - more people are getting into home ownership earlier.'"

The Winnipeg Sun from Canada. " A shortage of affordable houses is forcing prospective first-time Winnipeg buyers to accept price tags going through the roof, or to leave the market altogether. A Re/Max report on housing affordability says the inventory squeeze has brought at least a slight drop in first-time purchasing here this year."

"'It's a big problem. Demand is insatiable,' Cliff King, a broker with Re/Max Executives Realty, said of the trend in Winnipeg which nevertheless continues to be one of Canada's most affordable centres for housing."

"'I've had some first-time buyers who have just thrown in the towel and said, 'This is crazy.' One couple, who I think I wrote 12 or 13 offers with over a lengthy period of time, didn't get a house. So they finally kept increasing and increasing what they would pay, and still couldn't get anything,' he said."

Dow Jones Newswires. "In a bleak warning on the state of the U.K. housing market, house builder Persimmon Thursday said conditions had worsened over the past three weeks and were likely to deteriorate further."

"Revenue for 2008 is currently about GBP1.37 billion, down 24% from GBP1.8 billion last year. Volumes are down about 18%. The statement didn't say what the current cancellation rate is, but in February the company said the rate was 19%."

"Persimmon noted: 'An increase in discounting, marketing costs and incentives are being utilized in the market to compete for the reduced level of demand and this is having a negative impact on margins.'"

"The British Bankers' Association Wednesday reported that mortgage approvals last month slumped to the lowest level in a decade. The Bank of England this week sought to restart the interbank lending market by making GBP50 billion of lending available to banks by swapping government bonds for mortgages."

"British banks will be happy to swap their hard-to-sell assets for trusty government debt, but don't look for them to increase their exposure to the teetering housing market."

"What it is, in short, is liquidity. What it isn't is capital, which is the true constraint on British mortgage lending. While banks could theoretically take the government bonds, turn them into cash and lend the money to homeowners, gearing up their already very big exposure to British housing, it would be a risky move by an industry now rediscovering risk controls."

"'I don't think it gives the banks a green light to go through an enormous lending program,' said Mike Amey, a fund manager in London with Pimco. 'While it will free up some liquidity, how much we would see in mortgage rates coming down is less clear cut.'"

"A measure authored by Rep. Barney Frank, chairman of the House Financial Services Committee, (would) use the Federal Housing Administration to avoid foreclosures by moving borrowers into more affordable loans."

"The strongest opponents to the Frank plan remain Senate Republicans, according to analysts. 'It is going to have a tough time passing the Senate,' said Andy Laperriere, managing director of ISI Group. 'Most Republicans are of the same point of view, that a taxpayer-funded bailout is not going to help, and it is not fair and it is not popular.'"

"'To think that we can continue to simply issue more debt and the rest of the world is gladly going to buy it at attractive rates to us...I kinda doubt it,' said Paul Kasriel, chief economist at Northern Trust Co. in Chicago."

The Times News from South Carolina. "Like many around the country, this home is in foreclosure. The family will move to an apartment in Greensboro, where the wife has a new job."

"The husband, who asked not to be named, said the trouble began with the drought. He works for a waterproofing company and made nearly $100,000 annually in a sales job. With the drought, he said, people weren't concerned with water proofing their basements and crawl spaces anymore."

"As soon as he and his wife recognized their financial crisis, they decided she'd return to work as a physician's assistant. She hadn't worked since the children were younger and her license had lapsed. It took more than four months before she renewed her license and found work. But it was too late to save their home."

"His pay was entirely commission, so he quickly went from making great money to being unable to pay the mortgage. 'I'm not blameless,' the salesman said. 'This was not self-inflicting. I didn't just decide, 'To hell with my job. I'm not going to pay for my house.' Life happened to me.'"

The C & G News from Michigan. "Facing foreclosure is a difficult and emotional ordeal. The good news is that there is an alternative to foreclosure — the short sale."

"'We need to let people know there is a resource out there for them that will somewhat save their credit, and that option is a short sale in lieu of foreclosure,' said Gary Patrosso, a Realtor in St. Clair Shores."

"'It costs the bank an average of $50-$60 per day for every day they have a foreclosure sitting vacant on the market, because they’ve got to pay commission to the agent, pay utilities, taxes, lawn care and upkeep, and then things like people breaking into vacant homes and stealing things, and they have to pay for the board-up and maintenance,' said Ralph Newkirk, manager of Real Estate One-Corporate Foreclosure Division in Southfield."

"'By the time that it gets to the foreclosure process and once it’s over the houses aren’t in that great of shape. … A lot of time in foreclosure, people take it out on the house — they rip up carpeting, take lighting fixtures, the furnace, and things like this. The old saying is that they’ll take everything but the kitchen sink, but I had a house in Commerce where I didn’t even know where the kitchen was,' said Newkirk."

"To qualify for a short sale...the homeowner will have to submit a hardship letter, among other documents to prove their case."

"'The essay question is, 'How did you get in this trouble?’… Don’t just put on there that you don’t have any money. Tell them how you got there: Tell them about job loss, job reduction or price, divorce, illness, death, something. Go into fine detail and tell them exactly what happened. … Don’t be embarrassed,' said Newkirk. 'This market is just the way it is, and you’re not alone — don’t feel bad.'"

"Short sale sellers also have to consider all of their assets, said Newkirk, so it’s a good idea to talk to a CPA."

"'With that short sale packet, you have to list all your assets and all your liabilities. That includes 401Ks, any properties they have, anything, besides any liabilities, which include second and third mortgages,' said Newkirk. 'If they have assets, like a 401K, the banks are going to ask them to try and pull some money out of there and try to keep the house up.'"