Today’s News Synopsis:
An amendment was passed which allows federal regulators to dismantle financial firms considered to be “too big to fail”. According to PMI Group, new home sales decreased by 3.6 percent. The NAHB estimates that families earning the national median income can afford 70.1 percent of the new and existing homes sold in Q3 of 2009. First American CoreLogic reports that home prices declined by 9.8 percent in September from the previous year.
In The News:
NAR - “Commercial Real Estate Forecast Uncertain” (11-19-09)
“The first commercial mortgage bond deal in over a year shows the Federal Reserve’s efforts to sell securities through the TALF program can be fruitful, but the level of activity is well below what is required to resuscitate the commercial market. Credit availability needs to significantly rebound for any hope of a meaningful commercial recovery in 2010.”
DQNews - “California October Home Sales” (11-19-09)
“An estimated 41,280 new and resale houses and condos were sold statewide last month. That was up 2.6 percent from 40,216 in September, and down 2.4 percent from 42,293 for October 2008. California sales for the month of October have varied from a low of 25,832 in 2007 to a peak of 70,152 in 2003, the average is 44,451. MDA DataQuick’s statistics go back to 1988. ”
Mortgage Bankers Association – “Delinquencies Continue to Climb in Latest MBA National Delinquency Survey” (11-19-09)
“The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.64 percent of all loans outstanding as of the end of the third quarter of 2009, up 40 basis points from the second quarter of 2009, and up 265 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 108 basis points from 8.86 percent in the second quarter of 2009 to 9.94 percent this quarter.”
Inman - “Fannie: ‘Recovery is here’” (11-19-09)
“The deepest and longest recession since the Great Depression appears to be over, Fannie Mae economists say, projecting sales of new and existing homes will jump 11 percent next year and that national home prices will stabilize, remaining essentially flat.”
Housing Wire – “Freddie’s Weekly Mortgage Rates Near Record Lows” (11-19-09)
“Freddie Mac’s (FRE: 1.16 -1.69%) weekly survey of average interest rates put the 30-year fixed-rate mortgage (FRM) at 4.83% with an average 0.7 point for the week ending Nov. 12, down from the average rate of 4.91% the previous week. That’s a mere 5bps shy of Freddie Mac’s record low of 30-year FRM rates, reached twice in April this year. Last year, the rate was 6.04%.”
DQNews - “Bay Area median sale price tops year-ago level for first time since ‘07″ (11-19-09)
“The median price paid for all new and resale houses and condos that closed escrow rose to $390,000, up 6.8 percent from $365,000 in September and up 4 percent from $375,000 in October 2008. The last time the median sale price rose on a year-over-year basis was in November 2007, when it gained 1.5 percent, according to MDA DataQuick of San Diego.”
Bloomberg - “General Growth Makes $9 Billion Debt Restructure Deal” (11-19-09)
“General Growth Properties Inc. reached a deal with some of its largest lenders to restructure about $9 billion of mortgage debt through its Chapter 11 case.”
Bloomberg - “California Scales Back Bond Sale 45% Amid Prison Legal Issue” (11-19-09)
“California, the most indebted U.S. state, sold $743.3 million of tax-exempt bonds today, scaling back the offer by 45 percent because of legal issues raised yesterday about a project at San Quentin State Prison. ”
Bloomberg - “Bankruptcies Will Rise Next Year, Weil’s Miller Says” (11-19-09)
“U.S. companies will increasingly declare bankruptcy next year as high-yield debt matures, said Harvey Miller, the lawyer who handled the reorganizations of Lehman Brothers Holdings Inc. and General Motors Corp. Filings from commercial real estate firms will be part of that increase, said Miller, a lawyer with Weil Gotshal & Manges LLP, speaking today at a conference in New York. ”
Housing Wire - “Fed Buys Another $16Bn of Agency MBS” (11-20-09)
“The Federal Reserve Bank of New York bought another $16bn of agency mortgage-backed securities (MBS) in the week ending November 18.”
Housing Wire – “House Amendment Allows Dismantling of ‘Too Big to Fail’ Firms” (11-20-09)
“A House Financial Services Committee amendment that passed this week would empower federal regulators to dismantle financial firms considered ‘too big to fail.’ The amendment, authored by House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises chair Paul Kanjorski (D-PA), was included to the Financial Stability Improvement Act with a vote of 38-29.”
Housing Wire – “ABCP Outstandings Slip 35% in 2009″ (11-20-09)
“Total US asset-backed commercial paper (ABCP) outstandings were at $455bn as of November 4, a 35% decline from the beginning of 2009, according to market commentary by Fitch Ratings.”
Housing Wire – “PMI Group Sees Mixed Housing Activity in September” (11-20-09)
“The seasonally adjusted rate of new home sales decreased for the first time in six months, down 3.6% to 402,000. PMI Group said this decline was due in part to concerns the first-time homebuyer tax credit would expire.”
Housing Wire – “Combined Loan to Values Swell to 107% in July 2009: Equifax” (11-20-09)
“The average CLTV, a ratio used to determine the risk of default when more than one loan is used, for current Alt-A loans ballooned from 75% in July 2005 to 107% in July 2009, according to the study. Home price declines and an increase in the popularity and size of second liens caused the rise, analysts reported.”
Housing Wire – “House Affordability Dips in Q309: NAHB” (11-20-09)
“Families earning the national median income could afford 70.1% of the new and existing homes sold in Q309, according to the National Association of Home Builders (NAHB) and Wells Fargo (WFC: 27.87 -1.59%) Housing Opportunity Index (HOI).”
Housing Wire – “Prices Down 9.8% in September: First American” (11-20-09)
“National home prices declined 9.8% year-over-year in September, according to First American CoreLogic’s home price index (HPI). In August, the year-over-year decline was 11.1% and on a month-over-month basis prices declined 0.4%, ending a five-month run of consecutive monthly price increases.”
Bloomberg - “D.R. Horton Shares Plunge as Losses Exceed Estimates” (11-20-09)
“D.R. Horton Inc., the second-largest U.S. homebuilder, dropped the most in more than a year after reporting a fourth-quarter loss that exceeded analysts’ estimates and saying the housing outlook remains difficult. The shares fell 15 percent. The net loss for the three months ended Sept. 30 was $231.9 million, or 73 cents a share, the Fort Worth, Texas-based company said today in a statement. The average estimate of 8 analysts in a Bloomberg survey was for a loss of 24 cents.”
Bloomberg - “U.S. Commercial Property Sales to Drop to $49 Billion” (11-20-09)
“U.S. commercial real estate deals are likely to fall to $49 billion in 2009, the lowest in records going back to 2001, Real Capital Analytics Inc. said today.”
Inman - “Google makes yet another big move into real estate territory” (11-20-09)
“A couple weeks ago we noted the company’s move to include a real estate overlay on Google Maps, which put listings smack-dab in front of millions of Google users who likely had no idea the company has spent the last several years quietly aggregating this content. Now, today, search engine land reports that Google has taken this one step further to include a unique page for every listing that includes photos, a map (including Street View) property details, directions, transit information and more. It’s a listing detail page, basically.”
Looking Back:
One year ago, 7,613 houses and condos closed escrow in the Bay Area. Economists expected economic activity to drop by .6 to .8 percent. The Commerce Department reported that housing starts fell lower than any single month on record.
Tags: Alt-a, bruce norris, CLTV, commercial, CoreLogic, credit, D.R. Horton, First American, Fitch, Google, Google maps, homebuilder, NAHB, PMI Group, real estate, tax, Wells Fargo