The housing recovery that wasn’t

FORTUNE — Over the past few months, a spate of good news about the U.S. housing market has led some to think a recovery is finally on the horizon.

Zell’s Archstone Purchase Blocked, Officially

Bloomberg News
Sam Zell, chairman of Equity Residential

Equity Residential’s purchase of a stake in competitor Archstone has been blocked by the estate of Lehman Brothers Holdings Inc., as Lehman has exercised an option to match the company’s $1.33 billion bid, Equity Residential said in a securities filing today.

But this latest step in the complex fight over apartment-company Archstone doesn’t put Equity Residential out of the picture. The Chicago company, whose chairman is investor Sam Zell, has another bite at the apple: It has an option to buy another 26.5% stake for at least the same price. It has 30 days to make a deal, at which point Lehman would, once again, have the right to match that offer.

Lehman’s purchase – which is half of the position in Archstone owned by Bank of America Corp. and Barclays PLC – ups its stake in Archstone to 73.5%. The failed investment bank’s advisers are expecting Equity Residential to put in an offer for the final 26.5% stake, and are preparing to block that too, according to people familiar with the matter.

Of course, it’s unclear what price Equity Residential would bid, and in theory it could be high enough that Lehman wouldn’t match it. Equity Residential is entitled to a breakup fee of up to $80 million if Lehman blocks its second purchase.

New Darlings of Development

A major ad agency is looking for a huge new office in a space search that’s welcome news for landlords facing high vacancy rates and developers hoping to move forward on new office skyscrapers.

Builder Confidence Index At 54 Month High

Home builder confidence rose in January
for the fourth consecutive month as builders saw more buyer traffic and
anticipated higher sales.  The National
Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) rose
four points to 25
in January to reach its highest level since June 2007.  Each of the three components of the HMI also
increased for the fourth month and the improved confidence was evident across
every region of the country.

The HMI is the result of a monthly
survey of NAHB has conducted for 20 years. 
The survey asks the Association’s home builder members their perceptions
of current single-family home sales and their expectations for such sales over
the next six months, each graded on a scale of “good,” “fair,” or “poor.”  The survey also asks builders to rate the
current traffic of prospective buyers as “high to very high,” “average,” or “low
to very low.”  Answers to each question
are used to calculate a component index and those comprise the composite
index.  For each index a number over 50
indicates more builders view conditions as good than as poor.

Each of the three component indices rose
three points in January.  The component
measuring current sales conditions is at 25 and the index measuring traffic of
prospective buyers is at 21, the highest point for each since June 2007; the
index reflecting expectations for the next six months rose to 29, the highest score
September 2009.

Bob Nielsen, NAHB chairman said of the
results, “This good news comes on the heels of several months of gains in
single-family housing starts and sales, and is yet another indication of the
gradual but steady improvement that is beginning to take hold in an increasing
number of housing markets nationwide. Policymakers must now take every
precaution to avoid derailing this nascent recovery.”

“Builders are seeing greater interest among potential buyers as employment
and consumer confidence slowly improve in a growing number of markets, and this
has helped to move the confidence gauge up from near-historic lows in the first
half of 2011,” noted NAHB Chief Economist David Crowe. “That said,
caution remains the word of the day as many builders continue to voice concerns
about potential clients being unable to qualify for an affordable mortgage,
appraisals coming through below construction cost, and the continuing flow of
foreclosed properties hitting the market.”

The HMI also posted gains in all four regions in January, including a
nine-point gain to 23 in the Northeast, a one-point gain to 24 in the Midwest,
a two-point gain to 27 in the South and a five-point gain to 21 in the West.

…(read more)

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Real Estate News: Fannie, Freddie Face Pay Cuts

WPB3 Digital for Point B Realty
House of the Day: Martha’s Vineyard Estate: This 3-acre property on the Nantucket Sound has been in the same family for three generations. It features a 6,747-square-foot main house that dates to the late 18th century and 300 feet of sandy beach.

Here is a look at real-estate news in the weekend and Monday’s WSJ:

Fannie, Freddie Face Pay Cuts: Regulators will sharply cut the pay of the new chief executives of Fannie Mae and Freddie Mac, which may make it difficult for the struggling mortgage-finance giants to attract and keep qualified CEOs.

SmartMoney.com: Return of Reverse Mortgages: Converting home equity into cash has been a challenge for homeowners since the real-estate downturn, but a growing number of lenders are quietly reviving a loan for seniors that does just that: the reverse mortgage.

House Talk: A New Kind of Kit House: An entrepreneur is reviving the idea of the prefab house—though this time it’s green and high-tech.

Design & Decorating: Enter Stage Left: The Giant Indoor Tree: Borrowing from Mother Nature to bring scale, drama and warmth to interiors year-round.

Design & Decorating: What a Little Lace Can Do: Sheets and shams with a spot of something delicate are exactly what a sleek room needs, says Sara Ruffin Costello.

Europe House of the Day: English Manor Home: This eight-bedroom, 17th-century mansion near Swallowcliffe in southern England was owned and refurbished by the late best-selling British author James Leasor.

House of the Day: Martha’s Vineyard Estate: This 3-acre property on the Nantucket Sound has been in the same family for three generations. It features a 6,747-square-foot main house that dates to the late 18th century and 300 feet of sandy beach.

New York

Chinese Media Aiming High: Four major Chinese media companies are expanding their presence in New York City as they lay the groundwork to begin competing on a global stage.

Commercial Property Sales Plunge: Jitters over the European debt crisis and stagnant office rents contributed to a drop of more than 40% in sales volume in Manhattan’s commercial real-estate market during the last quarter of 2011, according to a new report.

From Bottom Up, Signs of Housing Recovery: In a strong sign of recovery in the housing market, cost-conscious buyers have stormed back into the market for lower-priced properties across the New York area in recent months, leading analysts to speculate that the worst of the housing slump may be over.

Movie Stars and Mobsters: LaSalle Hotel Properties got more than a 934-room hotel last month when it purchased the Park Central Hotel. It also got a few pieces of the Big Apple’s history, some that shined and a few bad spots.

Not Quite the Sweetest: Bank of America Corp.’s recent lease of 330,000 square feet at 114 West 47th St. was welcome news for its landlord, the Durst Organization, and the Cushman & Wakefield brokerage team of Tara Stacom and John Cushman, which chalked up a multi-million dollar commission.

A Makeover for Marc Jacobs: Should fashionistas have good taste in architecture, too? Designer Marc Jacobs thinks so.

Big Midtown Rezoning Eyed: New York City officials are weighing an ambitious plan aimed at remaking a large swath of the Midtown skyline by encouraging building owners to demolish aging structures and replace them with new office towers.

Open House: New Arrivals, Longtimers Mix in Westfield: Westfield blends a sophisticated downtown with a small-town atmosphere, thanks to its close-knit community and historic homes.

N.Y. House of the Day: A Brooklyn Garden Home: This two-storey home tucked away in Brooklyn’s Ditmas Park neighborhood backs up to a large, private and tranquil garden.