Housing Woes Strike Hard in Southland

Shares in local companies continued to get hit as uncertainty swirled on Wall Street Tuesday as more disappointing housing numbers hit companies in the ailing real estate market.
By: By ALLEN P. ROBERTS Jr.: Los Angeles Business Journal Online
The Business Journal’s index of 200 public companies in Los Angeles lost 2.1 percent for the week so far, with 135 of the companies losing ground.

Of those taking the hardest blows, Fremont General Corp. led the way, dropping 21 percent this week to $4.05. The Santa Monica-based mortgage lender was hurt by grim housing numbers released Monday coupled with a cut to the company’s credit rating Tuesday by Moody's Investors Service. The credit service cut Fremont’s rating to Caa2 from B3, citing “low capital levels.”

Shares in Calabasas-based homebuilder Ryland Crop. have dropped 11 percent so far this week, as have its Los Angeles-based competitor KB Home, which has lost 9 percent as costs for unsold homes mount and sales continue to slide.

Shares in the nation’s largest mortgage lender, Countrywide Financial Corp., have also lost more than 7.5 percent this week to $19.42 as have shares in Santa Monica-based Anworth Mortgage Asset Corp., which dropped 5 percent to $4.98. Pasadena-based IndyMac Bancorp also slid 4.4 percent to $22.94.

Even the world’s largest real estate broker, El Segundo-based CB Richard Ellis Group, dropped 4.2 percent for the week along as did Public Storage Inc., which dropped 4.4 percent.

Adding to the fray was Standard & Poor's announcement Tuesday that U.S. home prices fell 3.2 percent during the second quarter; the largest drop in more than 20 years – offering little evidence the struggling housing market is near recovery.