Double Dip In Housing Prices Seen As Risk, Seller Nightmare and Shire Moves Higher On Strong Q4 Results

Yet several housing forecasters are now predicting housing prices will slip again in 2010, after signs of revival in late 2009.

A double dip threatens to make it tougher for home sellers to get the price they want, and harder to figure an ideal listing price. Many sellers have had to cut prices to draw buyers.

Everyone is watching lenders’ foreclosure inventory, which is growing and could pressure prices downward. And home sales could stall if a federal tax credit for homebuying expires as planned at the end of April.

“We could see a major double dip once we take ourselves off the government stimulus,” said Ken Shuman, spokesman for real estate search firm Trulia.com. “Any time you come off pain medication you could have some withdrawals.”

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Real estate marketplace Zillow.com says early signs of a double dip are showing in 20% of the 143 markets it tracks, including the Boston, Atlanta and San Diego metropolitan areas. [Read the full article]

Shire posted earnings of $1.11 a share for the quarter, up from $1.01 a year earlier and much better than Thomson Reuters’ forecast of 52 cents a share.

The bottom line got a lift from government rebates on Shire’s Adderall drug, which treats attention deficit disorder. Shire also got more than $60 million in royalties from generic competitors.

“The company has executed extremely well in what was a challenging year. It’s a strong set of results,” said Brian White, an analyst at Shore Capital.

Shire shares rose more than 6% to a two-year high of 65 in early trading Friday. The stock was near 64 in midday trading.

Last week’s news that Genzyme will report a drop in fourth-quarter revenue due to manufacturing problems underscores the biotech’s need for better quality control. That need includes avoiding the kinds of problems that led to a viral contamination in the plant that makes Genzyme ‘s (GENZ) two key … [Read the full article]

Consolidation makes financial sense in some instances, says Damien Conover, a strategist and senior pharmaceutical analyst at Morningstar. But it rarely leads to more and better new products.

Conover: The main focus of the recent round of consolidations was cost containment. There’s the potential for projects that were under development to not get funding.

If we look back at major consolidations of a decade ago, we don’t see increased productivity from R&D. I don’t think we’ll see more products coming out of Pfizer (PFE) after its acquisition of Wyeth, or Merck (MRK) after its buyout of Schering-Plough.

There’s the potential that some products from the acquired companies will reach the market faster, especially in the Merck-Schering case because Schering didn’t have enough capital to fund all their trials. [Read the full article]

Such is the thinking that led to the rally in real estate investment trusts, or REITs, over the last year. After the mortgage crunch pushed commercial property values down some 40% from the peak, these vehicles could snap up cheap properties through funds raised on the stock market. And for shareholders, buying their shares means a nice steady dividend.

As 2010 dawned, REIT stocks hit a 52-week high. But since then the group hasn’t fared as well, falling from 28 in IBD’s industry-group ranking to 86 as of Friday. This may be because REIT investing these days requires some patience.

Manhattan West, a stalled condominium project in Las Vegas, is just one example of the hard-hit U.S. [Read the full article]

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