Monday, August 17, 2009

Sorry for not notifying you all of our vacation. The Norris Group Real Estate News Blog will continue. Here are some articles you may have missed...

CAR “Entry-level housing affordability reached 67 percent in Q2 09” (8-14-09)

“The minimum household income needed to purchase an entry-level home at $224,180 in California in the second quarter of 2009 was $39,930, based on an adjustable interest rate of 4.92 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,330 for the second quarter of 2009.”

Mortgage Bankers Association“MBA Study Shows Mortgage Banker Production Profits Marginally Improved in 2008, Helped by Changes in Product Offerings” (8-17-09)

“Mortgage bankers managed to make a marginal profit of $184 per loan on every loan they originated in the second half of 2008 despite lower net warehousing income and higher production operating expenses, according to the Mortgage Bankers Association (MBA). This modest profit marks an improvement over average per-loan losses in 2006 and 2007, according to the MBA’s Annual Mortgage Bankers Performance Report.”

CVBT “Nearly one-third of all mortgages underwater – and that’s the good news” (8-14-09)

“Nationally, more than 15.2 million U.S. mortgages, or 32.2 percent of all mortgaged properties, were in negative equity position as of June 30, according to newly released data from First American CoreLogic.”

Mish’s Global Economic Trend Analysis“Too Early For Housing Price Stabilization” (8-16-09)

“The current inventory of homes for sale relative to the rate of current sales remains very high. We’re above ten months of supply right now when the average for the entire period shown is much closer to a touch above 6 months. It’s relatively conventional wisdom (or at least has been in the past) that anything above 8 months means prices are still falling. So the first stop before beginning to feel better about life in the land of residential real estate is 8 months of available supply or less. We've got a ways to go yet.”

Calculated Risk“The Rentership Society” (8-16-09)

“The Obama administration, in a major shift on housing policy, is abandoning George W. Bush’s vision of creating an “ownership society’’ and instead plans to pump $4.25 billion of economic stimulus money into creating tens of thousands of federally subsidized rental units in American cities. The idea is to pay for the construction of low-rise rental apartment buildings and town houses, as well as the purchase of foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates.”

The Modesto Bee“Commercial real estate suffering” (8-14-09)

“The delinquency rate on commercial property loans pooled together into investments, estimated at $750 billion, hit nearly 3 percent in the second quarter, nearly tripling from where it was at the end of last year, according to Reis Inc.”

Bloomberg “Fed Extends TALF Program for Commercial Real Estate” (8-17-09)

“The Federal Reserve extended by three to six months an emergency program aimed at restarting credit markets, a move that may cushion the commercial real- estate industry from rising defaults and falling prices. The Term Asset-Backed Securities Loan Facility, with a capacity of as much as $1 trillion, will expire June 30 for newly issued commercial mortgage-backed securities, instead of Dec. 31, the Fed and U.S. Treasury said today in a statement in Washington. For other asset-backed securities and CMBS sold before Jan. 1, the plan was extended three months to March 31.”

Bloomberg “Mortgage-Bond Rally Halts as Dealers Prevent Drop” (8-17-09)

“Typical prices for the most-senior prime-jumbo securities were unchanged last week at 85 cents on the dollar, Barclays data show. Similar bonds backed by Alt-A loans with a few years of fixed rates held at 68 cents. The jumbo bonds are up from about 78 cents in early July, while the Alt-A bonds have climbed from 47 cents. The debt has rallied from 63 cents and 35 cents, respectively, in mid-March.”

Bloomberg “Goldman Sachs’s Cohen Says Recession Is Ending ‘Now’” (8-17-09

“The economy may grow by 3 percent in the next couple of quarters and expand by 1.5 percent to 2 percent next year, Cohen said. While consumer spending is likely to rise, it probably won’t increase as fast as at the end of prior periods when the U.S. was emerging from a recession, she said.”

Bloomberg “Lowe’s Falls After Net Misses Estimates, Forecast Cut” (8-17-09)

“Lowe’s Cos., the second-largest U.S. home-improvement retailer, fell as much as 11 percent in New York trading after posting profit that trailed analysts’ estimates and narrowing its full-year forecast. Net income plunged 19 percent to $759 million, or 51 cents a share, from $938 million, or 63 cents, a year earlier, the Mooresville, North Carolina-based company said today in a statement. Analysts projected profit of 54 cents, the average of estimates compiled by Bloomberg.”

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