Wall Street has hung a ‘SOLD’ sign on HouseValues.

The company’s shares lost more than 17 percent of their value last month to close at $8.24 per share March 31 and have fallen by half since Jan. 27, when the price last peaked at $17 per share.

Wall Street has hung a ‘SOLD’ sign on HouseValues.

The company’s shares lost more than 17 percent of their value last month to close at $8.24 per share March 31 and have fallen by half since Jan. 27, when the price last peaked at $17 per share.

Investors and analysts have punished HouseValues since it lowered its 2006 earnings estimates at the end of February. A Piper Jaffray analyst downgraded the shares from “outperform” to “market perform” and cut his target price on the company from $23 to $13. A March 1 note to investors said the analyst sees “little catalyst for the shares during 2006,” according to a Forbes.com report.

An analyst at Banc of America Securities also downgraded HouseValues from a “buy” recommendation to “neutral” and cut his target price for the company from $14 to $8.50, according to NewRatings.com.

Analysts may well have their own concerns about HouseValues’ business model in a softer housing market and more competitive online sector, but some of the piling on has seemed a bit, well, foolish. One Fool.com reporter entered his own personal data into the HouseValues’ Web site, though he had no intention of selling his home, and then became downright indignant after he received a mock-up of a for-sale brochure that included a photo of his home taken by a real estate agent who’d received his data from HouseValues.

“Zillow isn’t perfect, but at least I know it’s not coming after my digs voyeuristically with a digital camera,” he wrote, no doubt with nary a thought for the hapless agent whose time he’d wasted with his false intentions.

Yet even this scribe felt compelled to add that he wasn’t “giving up” on HouseValues as an investment just yet.

As a small capitalization company, HouseValues is susceptible to large short-term swings in its stock price. John Cook’s Venture Blog pointed out that one private equity firm has sold more than 1.4 million shares of the company’s stock.

Supply in excess of demand naturally triggers lower prices, and HouseValues has fought back. The company in March announced it will expand its HomePages service with listings data from an additional 16 MLSs and add a mortgage center that includes an advertising and content deal with Quicken Loans. The company also announced an e-postcard service for its customer management system for real estate salespeople. An advertising campaign on cable television is under way as well.

HouseValues wasn’t the only real estate issue out of favor on Wall Street last month. Fannie Mae and Freddie Mac suffered share-price declines of 6.2 percent and 9 percent, respectively. Dozens of news reports publicized the discovery of additional accounting problems at Fannie Mae, which missed the March 16 deadline to file its annual report to investors with the Securities and Exchange Commission. Freddie Mac announced it will file its reports after a two-month delay to implement certain accounting practices. The company’s chief financial officer resigned in March after three years on the job. A search for a replacement is under way.

The hypothetical Inman Index of 10 publicly traded real estate and mortgage corporations in February lost slightly more than 2 percent of its value in March, a worse performance than all three of the broader market indices. The Dow Jones Industrials, Standard and Poor’s 500 and Nasdaq Composite were up 1.4 percent, 1.5 percent and 2.8 percent, respectively.

Two real estate technology plays — Homestore and ZipRealty — and two mortgage companies — Countrywide Financial and IndyMac — were among those Inman Index companies that were in the plus column. Homestore, which will soon change its name to Move Inc., announced changes to its Realtor.com marketing agreement with Cendant Corp.’s NRT brokerage ownership arm. ZipRealty opened for business in Tampa, Fla., and announced plans to enter the Minneapolis-St. Paul market this summer. Analysts at AG Edwards reiterated a “buy” rating on Countrywide and increased their target price from $41 to $43, according to NewRatings.com. Bloomberg News reported that some institutional investors have increased their holdings of Countrywide, IndyMac and Wells Fargo, a sign of competitive optimism in a shrinking loan market.

Marcie Geffner is a real estate reporter in Los Angeles.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×