*More uncertainty for Socal housing

It's still not safe out there for homebuilders, not by a long shot. Lennar's announcement today that it will bail out of a deal involving 15,000 acres of Newhall Land & Farming is another bearish signal about California homebuilding through 2007. Lennar, along with its partner, LNR Property, are selling a 62 percent stake in the LandSource joint venture to MW Housing for $1.3 billion. (MW Housing is co-managed by real estate investment management company MacFarlane Partners and includes the California Public Employees' Retirement System.) It gets a little confusing because MW is purchasing the 62 percent stake but will have just 50 percent voting control of the venture. Lennar holds onto a 19 percent stake. Point is, homebuilding remains in pretty bad shape; there's too much inventory and too little demand and it's forcing prices to be slashed or developments put on hold. Lennar CEO Stuart Miller said, "market conditions continued to weaken throughout the fourth quarter, and we have not yet seen tangible evidence of a market recovery." It was two years ago when Lennar and LNR completed the $1 billion purchase of Newhall Land. AP

*Housing permits down: Data from the Construction Industry Research Board (through LAEDC) shows just 1,900 permits In L.A. County last month, compared with 2,325 in November 2005. Statewide, housing permits were off 33.6 percent in November.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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