Wednesday, August 30, 2006

Business Week - "Real Estate Reality" (8-30-06)

"In the past couple of years the cable television networks have released a slew of shows devoted to the real estate business. Among them: House Hunters, What You Get for the Money, Buy Me, Flip This House and Designed to Sell, all on HGTV. Then there's Location, Location, Location on BBC America, Flip That House on TLC and Double Agents on Discovery Home Channel. None that I've seen have really created compelling television. The other night, however, I happened to sit down with a reviewer's copy of Million Dollar Listing which debuts Tuesday, August 29 at 9 p.m. on Bravo. This show, which focuses on the trials and tribulations of a handful of high-end brokers in Los Angeles and Malibu, has it all, drama, backstabbing, cliff hangers and a pretty good dose of real estate education. In one episode, LA broker Ray Schuldenfrei has to tell a client that his house would sell better if they removed his furniture. "Is my stuff that awful," the shocked client replies. It's an exchange that later prompts even the goodnatured Ray to say, "The best time to sell a house is when the owner's dead." I wasn't surprised when I saw during the credits that the show was created by Fenton Bailey and Randy Barbato, the production team behind such well-received documentaries as The Eyes of Tammy Faye and Inside Deep Throat. They've got a remarkable ability to capture quirky people and pop culture."
Business Week - "Flipping is flopping in Cali" (8-29-06)

OC Register - "Hearing set for title-fee changes" (8-30-06)

"Garamendi calls for plan that would save the state's homeowners $1 billion a year."

Charging that title and escrow services are 'rife with illegal kickbacks and gratuities,' Garamendi will hear testimony today on his proposal to roll back service fees to 2000 levels. The rate reduction could take effect as early as March 1."
OC Register - "34.3% of O.C. flippers losing money" (8-30-06)

"Get rich quick in real estate? Not guaranteed, since 34.3% of home 'flippers' in The O.C. lost money in the second quarter on their trades, says HomeSmartReports of San Juan Capo."
LA Times - "KB Home Cuts Holdings as Market Cools" (8-30-06)

"Majority owner Empire Cos. acquires the builder's 49% stake in the master-planned Anaverde project in the Antelope Valley."

"KB Home has started pruning its land portfolio in Southern California, a byproduct of a slumping housing market that is forcing big builders to reevaluate their property holdings."

"The Westwood-based builder said Tuesday that it had sold its 49% stake in the massive Anaverde master-planned community in the Antelope Valley to the majority owner, Empire Cos. of Ontario."
OC Register - "Housing prices post no growth, according to report" (8-30-06)

Six of 10 metro areas had declines from May to June, which may signal a deeper slump."

"U.S. single-family house prices showed no appreciation from May to June, dragging down the annual rate of increase and signaling a deeper slump, according to an index of 10 major metropolitan areas."

"The composite year-over-year gain in the Standard & Poor's/Case-Shiller Home Price Index slowed to 8.2 percent in June from 9.7 percent in May, S&P said on its Web site. The index has reflected a deceleration of price gains over the past seven months and is well below its peak of 20.4 percent reached in July 2004."

CNN - "Getting real about the real estate bubble" (8-25-06)

"Fortune's Shawn Tully dispels four myths about the future of home prices."
CNN - "New homes slump worsens" (8-24-06)

"Pace of new home sales falls more than forecast as inventory builds, prices decline."

"More alarm bells for the stumbling housing market rang Thursday, as a government report on new home sales showed a bigger-than-expected drop in sales, along with a continued rise in unsold homes and a further weakening of prices in the closely watched sector."

"New homes sold at an annual pace of 1.07 million in July, according to the Census Bureau report, down from the 1.12 million pace in June, which was also revised slightly lower than the original reading."

NAHB - "Sales Of New Single-Family Homes Down 4.3 Percent In July" (8-25-06)

"The pace of new single-family home sales dipped 4.3 percent in July to a seasonally adjusted annual rate of 1.072 million units, the U.S. Commerce Department reported today. The sales pace was down by 21.6 percent from the record monthly high set last July. On a year-to-date basis, actual new-home sales were down 14.2 percent compared with the first seven months of 2005."
New York Sun - "Housing Bubble Horror: Market Has Makings for a Gory Story" (8-25-06)

Yahoo - "Boeing to Shut Down C-17 Production" (8-18-06)

"Unless Congress authorizes new orders, the decision could trigger a ripple of job cuts nationwide, including more than 7,000 Boeing employees and an additional 25,000 workers in 42 states that provide parts for planes still moving everything from tanks to troops around Iraq and Afghanistan."
Time - "I could have huffed and puffed, but the price dropped so much I just decided to buy it" (8-06)

Cartoon must see.

Business Week - "A Cool July for Housing" (8-23-06)

"July's housing reports show the fourth straight monthly decline in home sales and a surge in inventory. That equals a lot of unsold homes."

"Prospects for the U.S. housing market took a turn for the worse on Aug. 23, with the release of a government report that showed existing home sales had tumbled 4.1% in July to a 6.33 million unit annual pace. That is from a revised 6.6 million rate in June (from 6.62 million previously). The July figures represent the fourth straight monthly decline and leave home sales more than 11% lower than the year-ago figure." - "Existing-Home Sales Down With Softening Prices" (8-23-06)

"Total existing home sales – including single-family, townhomes, condominiums and co-ops – dropped 4.1 percent to a seasonally adjusted annual rate1 of 6.33 million units in July from a downwardly revised pace of 6.60 million June, and were 11.2 percent below the 7.13 million-unit level in July 2005."

David Lereah, NAR’s chief economist, said higher interest rates dampened sales but that price softening is good news for the housing market because it is drawing buyers. “Many potential home buyers have been on the sidelines, some ‘kicking the tires,’ but mostly waiting for sellers to compromise on prices and terms,” he said. “Now sellers in many areas of the country are pricing to reflect current market realities. As a result, there could be some lift to home sales, but it’ll likely take some months for price appreciation to rise.” - "Existing Home Sales Drop in July" (8-23-06)

"The National Association of Realtors reported Wednesday that sales of existing homes and condominiums dropped by 4.1 percent in July from June to a seasonally adjusted annual rate of 6.33 million. That was the lowest level since January 2004."
CNN - "Home prices in deep freeze" (8-15-06)

"Second quarter numbers are in for more than 150 markets. Overall growth is down; more markets show declines. Plus: Where the strength still is."

"Twenty-six markets of the 151 surveyed experienced price declines from a year ago, ranging from 0.1 percent (Columbus, Ohio) to 11.3 percent (Danville, Illinois). See prices for all 151 markets." - "Builder's Confidence In Condo Market Dips Again In Second Quarter According To New Multifamily Index" (8-22-06)

"Builder confidence in the condominium housing market weakened significantly in the second quarter of 2006, as sales continued to retreat from the record-high levels seen last year, according to results from the National Association of Home Builders Multifamily Condo Market Index* (MCMI) released today." - "New Index Shows Strengthening Demand For Multifamily Rental Apartments Confidence Soaring" (8-22-06)

"Builder confidence in current rental apartment market conditions climbed to a new high in the second quarter of 2006, and their expectations for the next six months are even higher amid rising occupancy rates, rising rents, and increased traffic at all classes of rental apartments, according to results from the National Association of Home Builders/Fannie Mae Multifamily Rental Market Index* (MRMI), released today."

Tuesday, August 29, 2006 - "Housing affordability at 23 percent, according to newly developed index gauging affordability for first-time buyers in California" (8-17-06)

"The percentage of first-time buyers in California able to afford a median-priced home stood at 23 percent in the second quarter of 2006, compared with 30 percent for the same period a year ago, according to a newly developed index released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)."

"C.A.R. developed the new index measuring affordability for first-time home buyers to better reflect the realities of today’s real estate market." - "Existing-home sales plunge to a two-year low" (8-23-06)

"Inventories of unsold homes rise to 13-year high"

"July was dry for the U.S. real estate market, as sales of existing homes plunged 4.1% to a two-year low, prices stagnated and the number of homes on the market soared to a 13-year high, according to a report from the National Association of Realtors released Wednesday."

Thursday, August 17, 2006

OC Register - "Buyers, sellers in no hurry" (8-17-06)

"Both sides, while eager to act, say they'll wait until their price is met."
LA Times - "Bay Area Home Sales Tumble" (8-17-06)

"The nine-county region sees a 30.8% drop in July from a year earlier. In a further sign of a slowing market, the median price falls from June."

"Sales of new and existing homes in the nine counties that comprise Northern California plunged 30.8% to 7,941 in July compared with a year earlier, and dropped 19% from June, according to DataQuick Information Systems, a La Jolla-based research firm. Sales in Sonoma and Solana counties plunged by more than 40% year over year."

"July was the 16th straight month that sales have declined year over year in Northern California. The trend is less pronounced in Southern California, where sales in the six-county region have fallen for the last eight months, DataQuick reported this week."
Real Estate Journal - "Sellers Give Auctions a Try As Housing Market Slows" (8-17-06)

"Auctioneers, long confined to the margins of the U.S. home-selling business, report a surge of demand since housing markets along the East and West coasts began stalling a year or so ago. They say auctions provide a quick exit for people who might otherwise wait months or years for a buyer to come along. But the costs of holding an auction are often steep, and the bidding can deliver crushing results: Homes may turn out to be valued at far less than their owners figured."
Wall Street Journal - "Rising Inventories Weigh on Home Prices" (8-17-06)

Wednesday, August 16, 2006

OC Register - "Home prices slip in July" (8-16-06)

"O.C. residences continue to appreciate, but at the slowest pace in 6 1/2 years. The median price of a local home has fallen, too."

"'We're seeing pretty substantial price reductions,' the Irvine agent said."
DQNews - "California July Home Sales" (8-16-06)

"A total of 44,250 new and resale houses and condos were sold statewide last month. That's down 17.6 percent from 53,700 for June and down 28.8 percent from 62,150 for July 2005."

"The median price paid for a home last month was $475,000. That was down 0.6 percent from June's record $478,000, and up 5.3 percent from $451,000 for July a year ago."

"The typical mortgage payment that home buyers committed themselves to paying last month was $2,353. That was down from $2,362 in June, and up from $1,974 for July a year ago."

DQNews - "Bay Area home sales decline, new price peak" (8-16-06)

"Home sales in the Bay Area slowed to their lowest level in ten years as prices increased at their slowest pace since spring 2003, a real estate information service reported."

"A total of 7,941 new and resale houses and condos were sold in the nine-county region last month. That was down 19.1 percent from 9,892 for June, and down 30.8 percent from 11,470 for July last year, according to DataQuick Information Systems."

MBA - "Refinance Applications Increase in Latest Survey" (8-16-06)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 11. The Market Composite Index, a measure of mortgage loan application volume, was 561.2, an increase of 1.4 percent on a seasonally adjusted basis from 553.3 one week earlier. On an unadjusted basis, the Index increased 0.4 percent compared with the previous week but was down 25.6 percent compared with the same week one year earlier. "
CNN - "Builders hit the brakes" (8-16-06)

"Latest reading of housing starts, permits shows more of a slowdown than expected as builders continue pull back in once hot sector of economy."

"The slowdown is important because home building has become an important component of the U.S. economy. In the second quarter of 2005, investment in residences added 1.11 percentage points to the gross domestic product, the broad measure of the nation's economic activity. But in the second quarter it subtracted an estimated 0.4 percentage points."

"In addition, the Labor Department estimates that more than 3 million people work directly in residential construction, and that the sector was responsible for about 10 percent of the nation's overall gain in employment in all of 2005."

Press Enterprise - "Sudden, steep decline takes area by surprise" (8-16-06)

Economists attributed the softening of the housing market in the Inland region to less-affordable properties, fewer investors buying speculative homes and nervous consumers.

"The consumer has lost confidence in the market, and that seems to be what this is all about," said Steve Johnson, a director with MetroStudy, a Riverside real-estate consulting firm. "They don't know if it is a good time to buy or a bad time to buy."

" Alan Nevin, economist for the California Building Industry Association, said the loss of investors as homebuyers accounts for much of the decline."

Yahoo - "Fisher: Fed to respond if inflation threatens" (8-16-06)

"There is a definite increase in inflationary momentum," Fisher told a real estate group. "The Federal Reserve will not tolerate inflation," he added, terming it the Lex Luthor to the "Superman" United States economy, referring to the superhero's nemesis.

Federal Open Market Committee voted this month to hold U.S. benchmark interest rates steady at 5.25 percent. That decision, taken with a single dissenting vote, paused a string of rate hikes made at 17 consecutive meetings over more than two years. Financial markets are split on whether the Fed will resume its tightening cycle. Fisher said the Fed "will watch and listen and 'taste' the indicators as they come in."

"If we see, after this pause, that inflation is beginning to threaten economic prosperity, we will take deliberate ... measures to counter it," he said. Even so, "that doesn't mean we need to take a sledgehammer to the economy."

Tuesday, August 15, 2006

LA Times - "Real Estate Economist Leaves UCLA Forecast" (8-15-06)

"Christopher Thornberg was one of the first to say that the housing market was peaking last year."

"Bearish real estate economist Christopher Thornberg, who says the Southern California housing market is a bubble beginning to pop, has left UCLA Anderson Forecast to strike out on his own."

"His new consulting firm, Los Angeles-based Beacon Economics, will prepare forecasts for regions he thinks are underserved, perhaps including San Diego, the Inland Empire, the Bay Area and Sacramento, Thornberg said. His partner at Beacon is San Francisco economist Jon D. Haveman of the Public Policy Institute of California."

"My guess is we're going to have a hard landing," he said. "It's ugly out there."
NAR - "Metro Home Prices Transition in Second Quarter" (8-15-06)

"Appreciation in existing single-family home prices cooled to single digit rates in most metropolitan areas during the second quarter, while metro area condo prices were essentially flat in comparison with a year ago, according to the latest survey by National Association of Realtors®."

The association’s second-quarter metro area single-family home price report, covering changes in 151 metropolitan statistical areas,* shows 37 areas with double-digit annual increases and 26 metros experiencing generally minor price declines – many of the areas with declines are showing weakness in the local labor market."

"David Lereah, NAR’s chief economist, said a market transition is apparent. 'With more sellers competing for the pool of buyers, the pressure on home prices has evaporated in most metro areas,' he said. 'After a full year of double-digit gains in the national median price, the timing is right for a cooling in the rate of growth – we are presently experiencing a soft landing in the housing sector.'"
NAR - "Second Quarter State Existing-Home Sales Soften" (8-15-06)

Existing-home sales, including single-family and condo, were down in the second quarter in contrast with a record set in the same period in 2005. Despite the overall decline, 20 states showed increases in sales activity from a year ago, according to the National Association of Realtors®."

quarterly report on total state existing-home sales shows that the seasonally adjusted annual rate* was 6.69 million units in the second quarter, down 7.0 percent from the record 7.19 million-unit level in the second quarter of 2005."

"David Lereah, NAR’s chief economist, said two sets of market conditions are apparent in the report. 'When you look at states with high housing costs or that have experienced a prolonged period of rapid price gains, you typically see slower home sales,' he said. 'By contrast, states with moderately priced areas that have experienced healthy job creation are seeing sales gains – the economic backdrop remains favorable for the housing market, which is helping home sales to level out.'"
NAHB - "Builder Confidence Slides In August" (8-15-06)

"Reacting to what they perceive as increasing consumer uncertainty regarding the market for new single-family homes, builders tempered their views on current and expected sales activity in the Wells Fargo/National Association of Home Builders Housing Market Index (HMI) for August, released today. The HMI declined seven points to 32, its lowest level since February of 1991. This was the seventh consecutive month in which builder confidence, as measured by the index, has fallen."
Inman - "Survey: Nontraditional loans more popular than subprime" (8-15-06)

"Loan officers say both types of loans performing as expected or better"

"Of the 30 domestic banks with subprime residential mortgages on their books, nearly three-fourths said they accounted for less than 5 percent of their mortgage portfolios. One-fifth reported the share of such subprime loans was between 5 percent and 15 percent. Only three banks, or 10 percent of those surveyed, said subprime loans made up more than 20 percent of the mortgages on their books."

"The July 2006 Senior Loan Officer Opinion Survey on Bank Lending Practices is available on the Federal Reserve Board's Web site"
Inman - "Southern California home sales hit 9-year low" (8-15-06)

"Price appreciation in July slows to 4.9% year-over-year"

"Southern California home sales declined for the eighth consecutive month and hit the slowest pace in nine years, while the rate of home-price appreciation fell to the lowest level since fall 1999, according to DataQuick Information Systems, a real estate information company."

"A total of 22,712 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in July, DataQuick reported, down 22.3 percent from 29,237 sales in June and down 26.9 percent from 31,069 sales in July last year."

Inman - "ShackYack puts a Web 2.0 spin on L.A. real estate" (8-15-06)

" is: a sliding price scale and a separate scale for selecting property types, unique icons that are color-coded based on price, a Google-based mapping platform that displays property information from four Southern California MLSs, links to estimates and municipal Web sites that have rich data on individual properties, searches by ZIP code and neighborhood area and MLS number, a five-star property ratings system, user comments, neighborhood market conditions, and details on price reductions, days on market and estimated monthly mortgage payments."

Yahoo - "Homebuilder mood index slides: survey" (8-15-06)

"U.S. homebuilder optimism sank for a seventh consecutive month in August as a dearth of buyers caused inventories of unsold homes to pile up, an industry trade group survey showed on Tuesday."

"The National Association of Home Builders said its index of sentiment among homebuilders plunged 7 points to 32, its lowest since February 1991 and less than half the level of a year ago."

"A reading below 50 means more builders view sales conditions as poor rather than good."
Yahoo - "Home sales decline in 28 states, D.C." (8-15-06)

"The slowdown in the once-sizzling housing market is spreading, with 28 states and the District of Columbia reporting spring sales declines, led by big drops in former boom areas of Arizona, Florida and California."

"The five biggest declines this spring compared to the April-June period of 2005 were Arizona, down 26.9 percent; Florida, down 26.7 percent; California, down 25.3 percent; Virginia, down 23.9 percent, and Nevada, down 23.5 percent."

"In all, 20 states had sales gains in the spring, led by Alaska, which enjoyed a 48.6 percent jump in sales; followed by Arkansas, up 17.9 percent; Texas, up 11.3 percent; North Carolina, up 11 percent, and Vermont, up 9.1 percent compared to the spring of 2005."

Monday, August 14, 2006

Inman - "Real estate industry sets sights on the auction block " (8-14-06)

"About $14.2 billion worth of residential real estate was sold through live auctions in 2005, up 8.4 percent from the 2004 level. Meanwhile, the value of land and agricultural real estate sold through live auction increased 7 percent in 2005 and the value of commercial and industrial real estate sold through auction grew 4.9 percent in 2005. The total number of auctions increased by about 5.2 percent in 2005 compared to 2004, the auction association also reported."

"The National Association of Realtors trade group is taking note. The association, which has 1.3 million members, sent its president-elect to speak at the National Association of Auctioneers conference in July to discuss ways that both groups can work together to benefit all members." - "For 2nd month, county home prices drop from year ago" (8-12-06)

"San Diego County's housing market weathered its second straight month of price declines in July, when overall prices dropped 1.8 percent from a year ago to $487,000, DataQuick Information Systems reported yesterday." - "Condo conversions revert back" (8-13-06)

"TREND: Markets seeing reversions include Las Vegas, San Diego, Phoenix and numerous cities in Florida." - "SOUTHERN CALIFORNIA HOME RESALE ACTIVITY"

"L.A. Times Sunday Edition Charts - Data for June 2006"
LA Times - Newspaper Ads in Real Estate section (8-13-06)

Century Vintage Homes - "Take Your Choice: No mortgage payment for one year, fully furnished turnkey homes, or free pool and spa." ($30,000 value)

Centex Homes - "Purchase a home by August 20th, you'll receive $20,000 towards closing costs or special financing, PLUS $10,000 in Design Center Upgrades."

Beazer Homes - "Live free until Sping 2007!"

Sunday, August 13, 2006

LA Times - "Home Price Gains Keep Shrinking" (8-12-06)

"L.A. County's median rises 6.6%, the smallest advance in six years, to $520,000. Volume sinks."

"Los Angeles County's home prices in July rose at their slowest pace in six years while San Diego County's continued to fall, more evidence that the Southland's real estate market is slumping, data released Friday show."

"Buyers are not rushing into deals, with sales in Los Angeles County plunging 25% versus year-earlier volumes — the eighth consecutive month of declines, according to La Jolla-based research firm DataQuick Information Systems."
OC Register - "Humblest homes" (8-13-06)

"Properties on the low end of Orange County real estate – single-family homes under $500,000 – are scarce and usually come with major flaws, market watchers say." - "Developers offer condo sales incentives" (8-13-06)

"The hip Atria condos have a lot to offer young professionals and empty-nesters - a prime downtown address, skyline views, gym, rooftop deck and units starting at $300,000."

"Developers are even throwing in free plasma TVs and $5,000 home renovation gift certificates to lure skittish buyers in what had been one of the nation's hottest real estate markets." - "Come right in, folks" (8-13-06)

"As the real-estate market cools, the open-house ritual is back in play, but does it help sell houses?"
CNN - "Bumpy ride fans, this week's for you" (8-13-06)

"The week ahead brings a slew of reports that address the slowdown in the economy and the rise in inflationary pressures. Get ready."

Saturday, August 12, 2006 - Job Openings for San Diego REO departments

For those of you who attended the California "Only" Investor series, the REO contact list bonus will most likely change quickly. It took us over two months to create the list of over 350 contacts but in the midst of the project, we saw how fast things were changing. Many banks did not even have an REO department. Times are changing.

Friday, August 11, 2006

CNN - "Bubble sitting: The pros and cons" (8-11-06)

"Waiting for home prices to drop before buying a home is tempting, but making the right call isn't simple."

"Some - known as bubble sitters - are acting on their conviction. They're cashing out by selling their homes and renting, figuring they'll return to the market after prices have fallen."

"Bubble sitters also include those people who have never owned a home and are waiting to take the plunge, along with folks who are relocating and holding on to their cash until the market in their new hometown softens."

"Many experts have labeled the majority of U.S. housing markets either overvalued or severely overvalued, but is it wise to count on prices falling?"
Market Watch - "Toll's quarterly home contracts slip 45%" (8-9-06)

"Residential builder cuts 2006 delivery estimate again, sees land write-offs"
USA Today - "San Francisco: Out-of-luck sellers give up, pull out" (8-7-06)

"Last week's light earthquake in Northern California probably didn't scare people in San Francisco as much as the number of "For Sale" signs that have been hanging in front of homes for weeks instead of days. Sales of single-family homes plunged 21% in June, according to the most recent data available. The number of homes listed for sale has nearly doubled since the start of the year. Prices are still rising, but more sellers are simply taking their homes off the market if they can't get the price they want, says John Yen Wong, a broker at Prudential California Realty."
UC Berkly News - "The odds of economic meltdown" (8-7-06)

"With interest rates and oil prices rising and consumers spending beyond their means, we may be headed for recession – and worse"

"So: Never say that a recession is coming. Say only that a recession is here, or that there might be a recession on the way. Which, in fact, is what I'm saying today. As of the beginning of August 2006, a recession is not here, and I'm not going to violate my own rule by saying one is coming. But there is a good chance — for the first time since 2003 — that there might be a recession in progress six months from now."

"Why? Three factors: 1) A Federal Reserve that finds itself with less inflation-fighting credibility than it thought it had; 2) upward pressure on inflation from rising energy and, perhaps, import prices; and 3) millions of middle-class homeowners who for too long have treated their houses as gigantic ATMs, using home equity loans and refinancing to generate extra spending money."

SF Biz Journal - "Housing slowdown leads to boom in mini-storage units" (8-9-06)

"Rising interest rates and concerns over the direction of housing prices are prompting more potential home buyers to remain on the sidelines, spurring increased demand not only for apartments but for mini-storage units as well, said Hans Lapping, an attorney with Miller, Starr & Regalia in Walnut Creek."
NAR - "NAR President Says Fed Decision is Good For Housing" (8-9-06)

Stevens said the Fed’s decision indicates it realizes the economy has slowed, especially the housing economy. “We can’t continue to raise rates without expecting the housing economy to suffer. That translates into higher costs for home buyers, slower sales and a lower level of economic activity in housing, which accounts for one-fourth to one-fifth of the gross domestic product,” he said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
Real Estate Journal - "Strapped Homeowners Start To Feel the Pain of Rising Rates" (8-11-06)

"Mortgage delinquency rates hit 2.32% in the second quarter after bottoming out at 2.06% in the fourth quarter of 2005, according to an analysis by Equifax/Moody's The portion of adjustable-rate mortgages that were at least 90 days past due has climbed 141% in the past year, according to a recent study by Credit Suisse that looked at loans made to borrowers with good credit. That compares to a 27% rise in such delinquencies for fixed-rate mortgages."

"Many borrowers who run into trouble have relatively low incomes or scuffed credit records. But housing counselors say they are also hearing from a growing number of middle- and upper-middle-income borrowers who borrowed heavily to finance spending or buy a house they could barely afford. NeighborWorks Homeownership Center in Sacramento, Calif., says that 38% of the borrowers it's seen this year have "moderate or above-moderate" incomes, up from 24% last year."

CNN - "Builder: Oversupply slump worst in 40 years" (8-9-06)

"Waiting for home prices to drop before buying a home is tempting, but making the right call isn't simple."

"With many potential buyers on the sidelines right now, we believe there is growing pent-up demand that will come into the market once buyer sentiment improves," said CEO Robert Toll. - "Goodbye Condo Mania" (8-4-06)

"Buyers get better deals as the froth fizzles and sellers offer concessions."
"The supply of existing condos for sale increased by almost two-thirds during the year that ended in April. At the same time, sales fell slightly, according to the National Association of Realtors. Investors -- about one-third of all condo owners, according to mortgage-data tracker LoanPerformance -- have been fleeing like proverbial rats."

"Sale prices of existing condos have fallen a bit, too. At $222,000, the nationwide median price of a condo is once again less than that of a single-family home ($222,700). Condos had been appreciating more quickly than single-family homes because they are concentrated in high-cost metro areas, where prices were rising rapidly. As home prices cool in overheated urban markets, the drop in condo prices is likely to be more precipitous."

Wednesday, August 09, 2006

OC Register - "Doors open for buyers" (8-9-06)

"Housing shifts away from seller's market, flat-fee broker says."

"Amanda R. Wheeland, owner of Cinch2Sell in Dana Point, says one of her biggest challenges is getting sellers to adjust their expectations on price and the length of time it might take to sell a property."
OC Register - "Builders walk on land deals" (8-9-06)

"Builder profits previously were dulled by the cost of prospective buyers walking away from deals. Now it's the builders themselves axing contracts and denting profits. Recent profit snapshots from several publicly owned homebuilders from across the nation describe steep costs incurred for choosing not to build on properties that they signed up to develop. Here's a handful ..."
LA Times - "Fed Opts to Hold Interest Rates Steady" (8-9-06)

"Analysts are divided on whether central bankers will resume tightening credit next month."

"The Federal Reserve called at least a temporary halt Tuesday to its 2-year-old campaign to raise short-term interest rates, suggesting that a slowing economy and previous rate hikes might cool inflation."

"The Fed's policymaking Federal Open Market Committee acknowledged its central predicament: How to steer the economy between the perils of inflation and sluggish economic growth. Inflation has been rising, it said in a statement explaining its action, even as 'economic growth has moderated from its quite strong pace earlier this year.'"
CNN - "Builder: Oversupply causing home slump" (8-9-06)

"Toll Brothers slashes outlook on new homes as orders plunge and revenue misses forecasts."

"Homebuilder Toll Brothers said the current slump in residential construction is unlike any it has seen in 40 years as it became the latest to warn of a glut in new homes for sale and a slowdown in the closely watched real estate market."

"The slowdown 'is the first downturn in the forty years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors,' Toll said in his statement."

"'With many potential buyers on the sidelines right now, we believe there is growing pent-up demand that will come into the market once buyer sentiment improves,' Toll said."
CNN - "Mortgage applications bounce back" (8-9-06)

"Mortgage Bankers Association reports that applications rose nearly 5 percent last week coming off four-year lows."
NAR - "Home Sales To Hold Fairly Steady For Balance of Year" (8-8-06)

"The housing market is in a process of stabilizing with little change in overall sales volume expected over the balance of the year, according to the National Association of Realtors®."

David Lereah, NAR’s chief economist, said the indicators already are leveling-off. “We’ve seen a minor easing in closed transactions of existing-home sales, and a slight increase in the leading indicator of pending sales based on contracts,” he said. “New-home sales and housing starts have been fluctuating, so the overall market is stabilizing.”
Inman - "Overnight real estate rates inch up" (8-9-06)

"30-year fixed rate at 6.09%; 10-year Treasury yield at 4.92%" - "Fed move will factor stagflation" (8-8-06)"

Add it up. Inflation plus a stagnating economy = stagflation."

"That's the equation facing U.S. Federal Reserve Board chairman Ben Bernanke today when the central bank's policy-setting arm decides whether or not to increase the federal funds rate for the 18th consecutive time, by one-quarter of a percentage point to 5.5 per cent."

"The chance the U.S. economy will slip into a recession has the markets anticipating the Fed will stop raising rates -- if not today then probably soon -- even though inflation pressures from higher energy costs to rising wages are hitting at the same time growth is slowing." - "Foreclosures jump 90% in S.J." (8-3-06)

"Second-quarter foreclosure activity in San Joaquin County took a year-to-year jump because the slower housing market made it tougher for homeowners in financial trouble to pay off their mortgages via home sales."

"In a report released Wednesday, La Jolla-based DataQuick Information Systems said that in San Joaquin County, the number of foreclosure notices was up almost 90 percent from a year ago, rising from 318 in the second quarter of 2005 to 604 in this year's last quarter."

Sunday, August 06, 2006

MSN - "Even if the Fed pauses, the trend is down" (8-7-06)

"As I have said for weeks now, the Federal Reserve won't raise rates Tuesday, but that doesn't mean our big economic problems have gone away. In fact, they're getting worse." By Bill Fleckenstein
LA Times - "Rate Pause Likely -- but Then What?" (8-6-06)

"Unless Federal Reserve policymakers want to risk triggering the equivalent of a major earthquake in global financial markets Tuesday, they will finally halt their two-year-long credit-tightening campaign."

"But the glee that the idea of a Fed pause generated in the U.S. stock market say, three months ago, is missing now. Many investors seem fearful that the central bank has gone too far with interest rates." - "Hot ... or not: Nearly 8,000 more homes on drawing board" (8-6-06)

"Demand has softened," acknowledged Kerrie Miller, vice president of sales for Sacramento-based Reynen and Bardis Communities, which controls a substantial portion of Laguna Ridge.

But the slower pace of sales hasn't diminished the upbeat game face of builders. They promise their new neighborhood will be second to none in the Sacramento area. Marketing staffs have named the community Madeira, after an island off the coast of Portugal and a variety of wine produced there. It's also a tip of the hat to Elk Grove's Portuguese heritage.

OC Register - "Homebuilder's sales, profit down" (8-6-06)

"Hovnanian Enterprises Inc., New Jersey's largest homebuilder, said profit in the quarter through July was as much as 27 percent lower than forecast after the pace of sales slowed and potential buyers canceled."
OC Register - "O.C. mortgage defaults spike 83.6% for 2nd quarter" (8-2-06)

"Banks sent delinquent borrowers 1,280 notices of default in the quarter, an increase of 83.6 percent from a year ago, according to DataQuick Information Systems. Lenders typically send such notices, which are the first step to foreclosure, after borrowers skip three or more payments."
The Providence Journal - "Homebuilding industry is taking a hit" (8-2-06)

"Going forward, many economists say, the biggest question is whether the orderly real-estate slowdown the Fed has engineered thus far will continue. 'Outside the threat of surging energy prices,' Zandi said, 'the most significant threat to the expansion is that the housing correction turns into a housing crash.'"

"The fact that mortgage rates remain low by historical standards offers one reason to doubt that a crash will happen. The average rate on a 30-year conventional mortgage was 6.8 percent last week, up from 5.7 percent a year earlier, according to the Fed."

"On the other hand, the boom of recent years has pushed housing prices out of reach for many families along the coasts. Already, some homeowners have resorted to creative loans, such as interest-only mortgages, to afford a house, and even modest increases in mortgage rates have the potential to cause a significant drop in demand for new houses." - "Foreclosure warnings grow in area" (8-3-06)

"Sacramento County recorded 1,352 notices of default - documents filed with the county recorder's office when homeowners miss at least two consecutive mortgage payments - during the second quarter of 2006. That was 108.6 percent higher than the second quarter of 2005." - "Mortgage defaults increase" (8-3-06)

"A growing number of homeowners in the Bay Area and throughout California fell behind on their mortgage payments in the second quarter."

"In the Bay Area, 2,910 homeowners received default notices from their lenders for the April-to-June quarter, up 37.1 percent from 2,123 notices in the same quarter a year ago, according to DataQuick, a La Jolla (San Diego County) real estate research company. That increase is the highest since the first quarter of 2001, when there was a 46.5 percent rise."

The swell was bigger statewide as 20,752 default notices were sent out -- up 67.2 percent from the same quarter in 2005 and the highest increase for any quarter since DataQuick began tracking foreclosures 14 years ago."

MSN - "Home loan demand sinks to four-year low" (8-3-06)

"U.S. mortgage applications last week sank to their lowest level in over four years, an industry trade group said on Wednesday, further evidence that the once robust U.S. housing market is weakening."

" The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity , which includes both refinancing and purchasing loans, for the week ended July 28 decreased 1.2 percent to 527.6 -- its lowest since May 2002 -- from the previous week's 533.8."
Freddie Mac - "Freddie Mac Voluntarily Adopts Temporary Limited Growth For Retained Portfolio" (8-3-06)

"McLean, VA – Freddie Mac (NYSE:FRE) today announced that it will voluntarily limit the annual growth of the company's retained mortgage portfolio to no more than two percent above the level at June 30, 2006. This voluntary, temporary growth limit is in response to a request of the Office of Federal Housing Enterprise Oversight (OFHEO), the company's safety-and-soundness regulator."

Saturday, August 05, 2006

USNews - "A Reckoning With Risk - Will adjustable-rate loans lead to record foreclosures?" (7-30-06)

"Call it the worst worst-case scenario."

"The interest rate on your adjustable-rate mortgage jumps just as the housing market enters a prolonged slump."

National Post (Canada) - "U.S. home prices in peril" (7-28-06)

'Rapid' deterioration: Potential financial instability would spill into Canada

Even Canada's worried.
TODAY Show - "Real Estate: The Bubble Burst!" (7-2006)

NAR economist David Lereah interviewed on the housing market.

UCSD Economist Roundtable - "The California Economy: Housing Boom or Bubble." (2-16-06)

Christopher Thornberg, senior economist at UCLA's Anderson School of Management, offers his perspective on whether the recent cooling trend in residential real estate indicates an imminent bubble burst or just a lull in California's otherwise booming housing market in this edition of the Economics Roundtable at the University of California, San Diego. Series: "Economics Roundtable" [Public Affairs]

Definitely worth a look.

PMI Group

PMI Group - "Real Estate Economic Trend Report" (Summer 2006)

Friday, August 04, 2006

Inman - "Bond market speculates Fed will cut rates" (8-4-06)

"Winter could see lowered short-term funds rate"

"The Federal Reserve is done, says the bond market, now convinced that the Fed's next move will be to cut interest rates. Not soon -- winter, maybe -- but cut, and maybe a lot."

"The clincher was this morning's news that the unemployment rate rose from 4.6 percent to 4.8 percent in July, the highest since February, and a slim 113,000-job gain in July payrolls portends further increases in unemployment."

"Mortgage rates are falling again this morning, 6.5 percent on the low-fee deals, taken by the straight-line decline in the 10-year T-note to 4.88 percent."

Tuesday, August 01, 2006

Inman - "San Diego real estate shows signs of weakness" (8-1-06)

"The San Diego Association of Realtors reported that the sales volume of attached, existing-home unit sales in San Diego County fell 38.9 percent in June 2006 compared to June 2005, while the average sales price dropped 4.6 percent and the median sales price dipped 5.2 percent in June 2006 compared to June 2005. Meanwhile, sales of detached existing homes fell 30.1 percent, while the average sales price grew 5.39 percent and the median sales price increased 1.55 percent in June 2006 compared to June 2005."

"Freddie Mac said today it will follow a recommendation to cap its retained mortgage portfolio until the company begins releasing quarterly financial statements in accordance with generally accepted accounting principles some time next year." - Inman
Inman - "Overnight real estate rates retreat" (8-1-06)

"30-year fixed rate at 6.17%; 10-year Treasury yield at 4.98%"

"Long-term mortgage interest rates sank further Monday, and the benchmark 10-year Treasury bond yield sank to 4.98 percent."

"The 30-year fixed-rate average fell to 6.17 percent, and the 15-year fixed-rate dipped to 5.88 percent. The 1-year adjustable was down at 5.4 percent."

CNN - "Inflation again tops Fed targets" (8-1-06)

"Key core price gauge up 2.4% over 12 months, fastest in 4 years; spending, income numbers match forecasts."