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The Norris Group Real Estate News Roundup 5/26/10

Wednesday, May 26th, 2010

Today’s News Synopsis:

The Commerce Department reports sales of new single-family homes rose 14.8 percent in April. Mortgage application volume increased 11.3 percent on a seasonally adjusted basis from one week earlier. The NAR predicts commercial vacancy rates will increase from 16.9 percent in the first quarter of this year to 17.6 percent in the first quarter of 2011. According to Freddie Mac, home prices declined 1.1% in quarter 1 of 2010 compared to the same quarter one year ago.

In The News:

Washington Post - “New home sales jump 14.8 percent in April” (5-26-10)

“The sales of new single-family homes rose 14.8 percent in April compared with the previous month to a seasonally adjusted annual rate of 504,000, according to Commerce Department data. It was up 47.8 percent compared to the same period a year ago.”

Mortgage Bankers Association - “Mortgage Refinance Applications Continue to Increase, Purchase Applications Decline Further in Latest MBA Weekly Survey” (5-26-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 21, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 11.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 10.3 percent compared with the previous week.”

NAR - “Commercial Real Estate Vacancies to Peak Near Early 2011″ (5-26-10)

“With an elevated level of sublease space available, vacancy rates in the office sector are projected to increase from 16.9 percent in the first quarter of this year to 17.6 percent in the first quarter of 2011, but should ease later next year. Annual office rent is likely to fall 2.3 percent this year and decline another 2.1 percent in 2011. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is forecast to be a negative 24.6 million square feet this year and then a positive 25.5 million in 2011.”

Mortgage Bankers Association – “MBA Study Examines Industry Risk Management Practices That Contributed to Housing Crisis” (5-26-10)

“Multiple factors including poor data, incomplete performance metrics, and, short-term focus and unrealistic optimism among senior business managers contributed to the collapse in the US housing and mortgage markets, according to a study released today by the Mortgage Bankers Association (MBA).”

Housing Wire – “Freddie Sees House Prices Down Slightly in Q110″ (5-26-10)

“Home prices declined 1.1% in Q110 compared to the same quarter one year ago, according to purchase-only edition of Freddie Mac’s (FRE: 1.17 +1.74%) Conventional Mortgage Home Price Index (CMHPI). Compared to Q409, prices are down 2.1%. However, despite the declines, prices in some regions of the country are still above 2005 levels.”

Bloomberg - “Toll Brothers Buys Land as Quarterly Home Orders Rise” (5-26-10)

“Toll Brothers Inc., the largest U.S. luxury homebuilder, increased its land holdings for the first time in four years in anticipation of a recovery in the market.”

Orange County Register – “4 big local landlords cut rent 5.3%” (5-26-10)

“Equity Residential, Essex Property, AIMCO and AvalonBay — own a combined 39,577 units in Southern California. (That’s a visual taste of their Orange County offerings above. Click for larger images!) Thanks to my trusty spreadsheet, this foursome’s collective SoCal rents — factoring in their relative number of local units owned — dropped 5.3% vs. a year ago. (RealFacts, which surveys numerous owners of large complexes, had Orange County rents down 4.8% in the year ended in the first quarter.)”

Orange County Register – “O.C. real estate giant to split into two companies” (5-26-10)

“The legacy component, consisting mainly of its title insurance and other insurance-related businesses, will be renamed First American Financial, trading on the New York Stock Exchange under the symbol of FAF. The newer, technologically advanced real estate and consumer data and analysis businesses formerly known as First American CoreLogic will form the second company, operating simply as CoreLogic. Its stock symbol will be CLGX.”

Bloomberg - “Home Prices in U.S. Cities Rise Less Than Forecast” (5-25-10)

“Home prices in 20 U.S. cities rose less than forecast in March from a year earlier, a sign the housing recovery is cooling. The S&P/Case-Shiller home-price index of property values in 20 cities increased 2.3 percent from March 2009, the group said today in New York. The median forecast of economists surveyed by Bloomberg News projected a 2.5 percent advance. Nationally, prices last quarter dropped 3.2 percent from the previous three months.”

Bloomberg - “Home Prices Decline 3.1% in First Quarter, FHFA Says” (5-25-10)

“U.S. home prices fell 3.1 percent in the first quarter from a year earlier as record foreclosures added to the inventory of houses on the market. The annual drop was double the 1.5 percent decline in the fourth quarter, the Federal Housing Finance Agency said today in a report. Measured from the prior three months, prices fell 1.9 percent in the first quarter, the Washington-based agency said.”

Housing Wire – “Moody’s Says Court Ruling Gives FDIC Broad Powers Over Failed Bank Assets” (5-25-10)

“A ruling by the Eleventh Circuit Court of Appeals is giving the Federal Deposit Insurance Corp. (FDIC) broad-reaching powers to dispose of the assets of failed banks, according to Moody’s Investors Service. In its latest credit outlook report, the rating agency said the ruling is likely to up the risk to bank-sponsored asset-backed securities (ABS), as recourse to compensation will be diminished, leaving involved parties little alternative than to sue the FDIC in instances of alleged grievance over the handling of these assets.”

Housing Wire – “Freddie Production Stays Flat Despite Delinquent Buy-Outs, Analyst Says” (5-25-10)

“The aggregate unpaid principal balance of Freddie’s mortgage-related investments portfolio grew by $3.9bn in the month, due to delinquent mortgage buyouts from Participation Certificate (PC) pools first announced in February. The total portfolio size is back to year-end 2009 levels, but securities holdings are down $61bn to accommodate the loan purchases. Net production of Freddie pass-throughs this year — including the effect of the buy backs — is flat, according to Jim Vogel, a strategist at FTN Financial, a financial services provider for the investment and banking community.”

Housing Wire – “New $3bn Foreclosure Prevention Program Added to Wall Street Reform Bill” (5-25-10)

“The Senate passed the Restoring American Financial Stability Act last week, approving a new program that would reduce mortgage payments for the unemployed. The program would provide $3bn from the Troubled Asset Relief Program (TARP) to lend up to $50,000 to unemployed homeowners, who could reasonably resume making payments again within two years. The program was modeled after the Homeowners’ Emergency Mortgage Assistance Program (HEMAP) in Pennsylvania.”

Looking Back:

One year ago, the S&P/Case-Shiller home-price index decreased 18.7 percent from March 2008. Freddie Mac estimated that the U.S. housing slump would end in June 2009. Orange County building industry lost 32,300 construction jobs from the September 2007 peak. President Obama signed a $500 million fraud protection bill.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 5/10/10

Monday, May 10th, 2010

Today’s News Synopsis:

Fannie Mae is asking for $8.4 billion in government aid. According to Fitch Ratings, Serious delinquencies among US Alt-A residential mortgage-backed securities (RMBS) declined in April. First American CoreLogic reports that underwater mortgages and borrowers with less than 5% home equity accounted for 28% of all residential properties. Statistics from Zillow show more than a fifth of U.S. mortgage holders owed more than their homes were worth in the first quarter.

Looking Back:

Mortgage Bankers Association – “Study: Americans Will Be Permanently Impacted by Recent Recession” (5-10-10)

“The historically slow recovery of the economy and lack of substantial job growth could cause negative, lasting effects on the current young generation and force many retirement age individuals to remain in the workforce, according to a study released today by the Mortgage Bankers Association (MBA). The impact of a higher unemployment rate for Americans aged 16 – 24 could have a lasting effect on lifetime earnings and attitudes toward risk and social policies. In addition, those nearing retirement are delaying retirement and reentering the labor force in an effort to rebuild some of the retirement wealth that was wiped out by the recession.”

San Francisco Chronicle – “Fannie Mae seeks $8.4B in aid after 1Q loss” (5-10-10)

“Fannie Mae has again asked taxpayers for more money — this time $8.4 billion — after reporting another steep loss for the first quarter. The taxpayer bill for rescuing Fannie and its sibling Freddie Mac has grown to $145 billion — and the final tally could be much higher.”

Housing Wire – “Alt-A RMBS Delinquencies Post First Decline in 4 Years” (5-10-10)

“Serious delinquencies among US Alt-A residential mortgage-backed securities (RMBS) declined in April for the first time in four years, according to the latest data from Fitch Ratings. Subprime RMBS delinquencies fell in the second straight month, and prime RMBS delinquencies rose slightly.”

Housing Wire – “Underwater Mortgages Stabilized in First Quarter: CoreLogic” (5-10-10)

“The number of borrowers with negative equity declined slightly in Q110, but underwater mortgages and borrowers with less than 5% home equity accounted for 28% of all residential properties, according to the latest data from CoreLogic. More than 11.2m, about 24% of all residential properties with mortgages were in negative equity at the end of Q110. That’s down slightly from 11.3m, or 24%, Q409. The state with the highest rate of negative equity mortgages continues to be Nevada, where 70% of all properties are underwater, followed by Arizona (51%), Florida (48%), Michigan (39%) and California (34%).”

Housing Wire – “Monday Morning Cup of Coffee” (5-10-10)

“Regulators closed four banks, bringing the running 2010 total to 68 failed banks so far. The closures, located in Arizona, California, Florida and Minnesota, are expected to cost the Federal Deposit Insurance Corp. (FDIC) Deposit Insurance Fund (DIF) a total $213.7m. Last week, regulators shut down seven banks at a cost of more than $7.33bn.”

Bloomberg - “Cemex, Vulcan Call Turn in Construction as Sales Rise” (5-10-10)

“A four-year slump in construction may be nearing an end, with the biggest U.S. building-material makers reporting higher monthly sales that have yet to spread industrywide. Cemex SAB, the largest U.S. cement producer, and Vulcan Materials Co., the top gravel supplier, just reported monthly volume increases for March and April, their first since 2006. The results exceeded estimates and may lead the Portland Cement Association, a trade organization that represents U.S. and Canadian companies, to increase its growth forecast this year, said Ed Sullivan, its chief economist.”

Bloomberg - “Fed Hinting on Mortgage-Bond Sales Brings Bernanke Tightening” (5-10-10)

“Words may speak louder than actions for Federal Reserve Chairman Ben S. Bernanke when the time comes to outline plans to raise interest rates and shrink the central bank’s balance sheet. Altering a pledge to keep short-term borrowing costs low or articulating plans to begin selling the $1.1 trillion in mortgage-backed securities it now holds will amount to a tightening of monetary policy because the announcements will send bond yields higher, raising borrowing costs, said Mitch Stapley, chief fixed-income officer at Fifth Third Asset Management in Grand Rapids, Michigan.”

Bloomberg - “Mortgage Holders Owing More Than Homes Are Worth Rise to 23%” (5-10-10)

“More than a fifth of U.S. mortgage holders owed more than their homes were worth in the first quarter as repossessions climbed to a record, according to Zillow.com. Twenty-three percent of owners of mortgaged homes were underwater during the period, up from 21 percent in the previous three months, the Seattle-based property data provider said today in a report. More than one in 1,000 homes were repossessed by lenders in March, the highest rate in Zillow data dating back to 2000.”

Looking Back:

One year ago,Campbell Communications reported only 23 percent of short sale transactions were being completed. Obama proposed making the Federal Reserve serve as a finance supercop.

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The Norris Group Real Estate News Roundup 4/28/10

Wednesday, April 28th, 2010

Today’s News Synopsis:

The MBA reports mortgage loan application volume decreased 2.9 percent last week. The House Financial Services Committee approved a bill to increase capital reserves in the Federal Housing Administration (FHA) and reduce risks to its insurance fund. Republicans voted against the Restoring American Financial Stability Act of 2010. New HUD regulations require all new lender applicants must hold at least $1 million.

In The News:

California Builder – “Selecting the Right Paint Color for Your Home” (4-28-10)

“A successful color scheme is a scheme that is pleasant to live with and reflects the moods and personalities of the people living in it. Creating living areas that allow us to rest and relax are just as important as creating other places that invigorate or stimulate us. Light and color affect our senses. Bedrooms, living rooms and kitchens all serve different needs.”

Mortgage Bankers Association – “Purchase Applications Increase, Refinance Applications Decline in Latest MBA Weekly Survey” (4-28-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 23, 2010.  The Market Composite Index, a measure of mortgage loan application volume decreased 2.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 1.9 percent compared with the previous week.”

Housing Wire – “House Committee Approves Bill to Tighten FHA Approval Standards” (4-28-10)

“The House Financial Services Committee approved a bill to increase capital reserves in the Federal Housing Administration (FHA) and reduce risks to its insurance fund. The bill will now move to the House floor for debate. The bill would amend the National Housing Act by increasing the cap of annual premium payments collected by the FHA from 0.50% to 1.5%. It would also hold approved lenders accountable for the FHA loans they write. Under the new bill, if the FHA pays out a claim on a mortgage it finds did not meet its underwriting standards or detects fraud involved with the origination of the loan, it could require that lender to pay reparations for the loss to the insurance fund.”

Housing Wire – “First American Title Launches AgentFirst iPhone, iPad Application” (4-28-10)

“First American Title Insurance launched a new application for the iPhone, iPad and iPod Touch devices that provides mobile access to real estate data including property information and characteristics, historic sales information, and tax information. First American Title Insurance said the data included in the AgentFirst app covers 97% of all US real estate transactions.”

Housing Wire – “Financial Reform Blocked in Senate, Again” (4-28-10)

“The Senate reconsidered S. 3217, the Restoring American Financial Stability Act of 2010, again today after Senate Republicans voted against debating the legislation on Monday. Once more, Republicans voted against debating the legislation today. The bill would create a consumer financial protection agency, impose a risk retention requirement on banks that sell and securitize mortgage loans, and bring greater transparency to the derivatives market.”

Housing Wire – “New FHA-Lender Restrictions Will Wreak Havoc: K&L Gates” (4-28-10)

“HUD finalized new regulations earlier in April that increase the net worth requirements of FHA-approved lenders and make these businesses liable for the oversight of mortgage brokers. Since, 1993, FHA required approved lenders to hold a net worth of at least $250,000. Effective immediately, all new lender applicants must hold at least $1m.”

Bloomberg - “‘Smart Capital’ Backs Real Estate, Zimpleman Says” (4-28-10)

“Principal Financial Group Inc. Chief Executive Officer Larry Zimpleman, whose firm owns or manages more than $30 billion of real estate assets, said new buyers are entering the U.S. commercial market and pushing up prices.”

Inman - “CalREDD announces plans to merge with MRMLS” (4-28-10)

“The California Association of Realtors today announced that calREDD, a service of CAR’s CALMLS subsidiary, plans to merge with Multi-Regional Multiple Listing Service Inc. (MRMLS) to form a 33,000-member multiple listing service that serves 22 Realtor associations.”

Looking Back:

One year ago, A survey from the NAHB showed that most baby boomers were planning to stay in their current residence for the rest of their lives. The S&P Index showed that home prices were declining at a slower rate. MDA Dataquick reported that notices of default rose in 76 of 84 CA Zip codes.

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The Norris Group Real Estate News Roundup 4/12/10

Monday, April 12th, 2010

Today’s News Synopsis:

According to First American CoreLogic, distressed home sales in Orange County are selling 34 percent under the typical market place. Altos Research reports a 0.5 percent in the national median home price. A modification becomes permanent through HAMP after the borrower makes all three monthly payments during the trial period. Fiserv estimates that home prices will not return to the past peak levels until 2025.

In The News:

My Desert – “Valley’s Housing Market Warming” (4-12-10)

“The median sales price of new and single-family homes rose 11 percent to about $200,000, about $20,000 higher than in February 2009. Home sales also rose 9.4 percent compared to the same period last year. Real estate sales have been outpacing sales from the previous year every month since October. Sales volume rose 31 percent in November, 29 percent in December, and 22.2 percent in January.”

Orange County Register – “Distressed home discounts at 6-month high” (4-12-10)

“Orange County homebuyers got a 34% price discount when they chose a distressed property vs. overall market prices in January, according to First American CoreLogic. That’s the biggest discount in six months.”

Wall Street Journal – “Second Mortgages Vex Borrowers” (4-12-10)

“Banks are coming under increasing political pressure to write off or at least write down second-lien and other junior mortgages as a way to help borrowers keep their homes or extract themselves from heavy debt. As the Wells Fargo suit shows, however, banks often are reluctant to give up on loans when they see a chance of recovering all or part of their money. This issue will be the focus of a hearing Tuesday by the House Financial Services Committee in Washington. Panel members are due to quiz executives from Wells Fargo, Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co. about their junior-lien mortgage policies.”

Bloomberg - “Bank Profits Dimmed by Prospect of Home-Equity Losses” (4-12-10)

“Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. may have to set aside an additional $30 billion to cover possible losses on home-equity loans, an amount almost equal to analysts’ estimates of profit at the three banks this year. The cost of these reserves was calculated by CreditSights Inc., a New York-based research firm whose prediction almost four years ago proved prescient after banks reported unprecedented mortgage-related writedowns. Recognizing the home- equity loan losses is unfinished business from the housing bubble, CreditSights said in a March 29 report.”

Housing Wire – “So, Where Will Housing Double Dip?” (4-12-10)

“Put in more plain terms, a state with a 1% foreclosure rate and an 11% delinquency rate should be expected to feel the impact of distressed properties moving through the pipeline far more than a state with a 5% foreclosure rate and a 5% delinquency rate, for example. The reasoning is simple: distressed property sales (short sales or REOs) are a drag on retail home prices. In markets that have seen comparatively less foreclosures relative to the volume of delinquencies stuck in the pipeline, the impact of those delinquencies will be felt proportionately more strongly as they are finally dealt with.”

Housing Wire – “Altos Sees House Price Decline Decelerate in March” (4-12-10)

“The median house listing price declined 0.5% in the Altos Research 10-city composite in March, improved from February’s 1.3% decline in an indication the pace of decline may be decelerating. March, the eighth consecutive month of decline, brings the Q110 price decline to 1.8%. But weekly price changes have shown a modest upward trend in the past seven weeks, which means a uptick in house prices could arrive in the coming months, Altos said.”

Housing Wire – “BofA Completes 33,000 Permanent HAMP Mods” (4-12-10)

“Bank of America (BAC: 18.66 +0.38%) completed almost 32,900 permanent mortgage modifications through the Home Affordable Modification Program (HAMP) through March, up from 20,666 in February. The Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. When Treasury first reported permanent modifications in November 2009, BofA reported 98 permanent modifications. A modification becomes permanent through HAMP after the borrower makes all three monthly payments during the trial period.”

Housing Wire – “Despite HAMP, Mortgage Delinquency Grows 21% over 2009: LPS” (4-12-10)

“The number of mortgages delinquent at the end of February 2010 is 21.3% higher than the same time last year despite government-led modification efforts, according to the latest monthly report from Lender Processing Services (LPS: 37.61 +0.94%).”

Housing Wire – “Peak House Prices Will Return to Sand States after 2025: Fiserv” (4-12-10)

“Housing markets that experienced the greatest inflation in house prices — including certain metro areas in sand states California, Florida, Arizona and Nevada — will not see a return of peak-level home prices before 2025, according to financial services technology provider Fiserv.”

Wall Street Journal – “AIG, Goldman Unwind Soured Trades” (4-12-10)

” The derivatives unit of American International Group Inc. has unwound most of its soured mortgage trades with Goldman Sachs Group Inc. still left after the insurer was bailed out by the U.S. government in 2008, according to people familiar with the matter. The move by AIG Financial Products to terminate credit-default swaps insuring about $3 billion of mortgage-asset pools arranged by Goldman caused AIG to realize a $1.5 billion to $2 billion loss last year, the people said.”

Bloomberg - “Pimco Says Investors to Hold Down U.S. Mortgage Rates” (4-12-10)

“Investor demand for mortgage-backed securities will keep U.S. home-loan rates down after the Federal Reserve ended its purchases of the debt, said Pacific Investment Management Co., manager of the world’s biggest bond fund. The Fed’s unprecedented program to buy $1.25 trillion of the securities that guide home-loan costs stopped U.S. housing prices from falling, Scott Simon, who is in charge of investing in the notes at Pimco, wrote on the company’s Web site.”

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The Norris Group Real Estate News Roundup 4/8/10

Thursday, April 8th, 2010

Today’s News Synopsis:

John Husing estimates that 10,500 new jobs will be created in Riverside during 2010. First American CoreLogic reports distressed sales accounted for 29 percent of the U.S. market. According to the Clear Capital Home Price Index, US home prices dipped 3.9% in the first quarter of 2010. The current rate for 30-year FRM loans is at 5.21%.

In The News:

The Press Enterprise – “Inland economy to improve in 2010: forecast” (4-7-10)

“Inland Southern California will start regaining some of the jobs it lost in the last two years, the area’s leading economist told a gathering of business leaders Wednesday. John Husing, whose forecast each spring is considered one of the clearest snapshots of the region’s economy, said Riverside and San Bernardino county residents will see about 10,500 new jobs created in 2010. If it happens, it would be the first annual growth for the area’s job base in three years.”

Housing Wire – “Distressed Sales Reach 29% of Entire Market: First American” (4-8-10)

“Distressed sales, including short sales and real estate owned (REO) transactions, accounted for 29% of the entire US market in January, according to First American CoreLogic. It’s the highest level since April 2009 and close to the February number calculated by Clear Capital, another analytics firm, which released a report showing how those transactions are pressing home prices down. Distressed sales took the largest chunk of the market in January 2009 when 32% of sales fell into that category, according to First American.”

Housing Wire – “REO Sales Push Home Prices Down 3.9% in March: Clear Capital” (4-8-10)

“After nine months of quarterly gains, US home prices dipped 3.9% from January to March as real-estate owned (REO) property takes more of the market, according to the Clear Capital Home Price Index. Home prices did grow 5.1% from last year, a sign that increases are flattening. In February, prices grew 5% on a yearly basis as well. All four US regions reported positive yearly gains for the first time since spring 2006. However, when Clear Capital analysts drilled down to the quarterly scale, they found renewed declines in regional prices.”

Housing Wire – “Freddie Mac Mortgage Rates Continue Climb for Fourth Week” (4-8-10)

“The Freddie Mac (FRE: 1.34 0.00%) weekly survey put the average interest rate for a 30-year fixed-rate mortgage (FRM) at 5.21% with an average 0.6 point for the week ending April 8, up from the previous week, when the average was 5.08%, and up from the same time last year, when the average rate was 4.87%. It’s the highest average rate for 30-year FRM since August 13, 2009, when it averaged 5.29%. It is the fourth week Freddie’s rates have inched upward.”

Orange County Register - “Homebuilder’s future in doubt?” (4-8-10)

“California Coastal Communities filed for Chapter 11 bankruptcy in October to gain more time to repay $182 million in debt due this spring. That debt grew to $204 million by the end of 2009, according an annual report the company filed with the Securities and Exchange Commission on March 30.”

Inman - “ZipRealty: Data shows rising median price” (4-8-10)

“A monthly review of multiple listing service data in 26 market areas found that the median price of for-sale homes rose 1.07 percent in March, to $263,753, according to real estate brokerage company ZipRealty. Prices have been reduced on 40.35 percent of homes that were for sale in March, which is down slightly from February. And the median price reduction on for-sale homes fell 3.02 percent in March, to $20,200.”

Realty Times – “Top 10 Home Buying Mistakes” (4-8-10)

“Going solo Buying a house is a complex transaction. It should be a team effort. You’ll need a real estate agent, lender, inspector, insurer, perhaps a lawyer and other team members to help you through each step of the way. Team build before you start the search. Love at first sight If you believe in fairy tales you probably shouldn’t be buying a home. You won’t live happily ever after if you emote your way through the home buying process. Your home should fit your real needs, not your yen for drama. Buy a home that fits your budget and your lifestyle. Be sure the home is in a community and neighborhood you desire. Visit neighborhoods several times before you buy to check out schools, noise and traffic patterns.”

Realty Times – “Nonresidential Construction Industry Continues to Struggle” (4-8-10)

“Associated Builders and Contractors (ABC) reports that its Construction Backlog Indicator (CBI) sharply declined by 9 percent between November 2009 and January 2010. CBI has slipped 16.3 percent during the last year and currently stands at 5.5 months, the lowest point reported in the 15 months ABC has gathered data. CBI is a forward-looking indicator that measures the amount of construction work under contract to be completed in the future.”

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The Norris Group Real Estate News Roundup 4/6/10

Tuesday, April 6th, 2010

Today’s News Synopsis:

A recent Fannie Mae survey shows that approximately two-thirds of Americans would still prefer to own a home. Independent mortgage bankers and subsidiaries made an average profit of $890 on each loan they originated in the fourth quarter of 2009. The National Bankruptcy Research Center claims that bankruptcies could total over 1.5 million this year. According to Reis Inc, rent prices declined by 1.6 percent from last year.

In The News:

CBIA - “Road to Recovery” (4-6-10)

“The economic downturn has put California in a critical position, but homebuilders could play a major role in helping with the state’s recovery. CBIA has focused on six pieces of legislation this session that could help lead the state on that road. None is more important than an extended homebuyer tax credit, but all six are vital to helping the state, and the building industry, move forward.”

CNN - “With caution, Americans still want a house” (4-6-10)

“Nearly two-thirds of Americans would still prefer to own a home, although the recent housing market turmoil and uncertain economy have made them a little more cautious about how and when, according to a survey released Tuesday. A nationwide survey conducted by mortgage lender Fannie Mae found 65% of the homeowners and renters believe there is still value in owning a home.”

Mortgage Bankers Association – “Production Profits Held Steady in 4th Quarter 2009, According to MBA Study of Independent Mortgage Bankers and Subsidiaries” (4-6-10)

“Independent mortgage bankers and subsidiaries made an average profit of $890 on each loan they originated in the fourth quarter of 2009, down from $902 per loan in the third quarter of 2009, but up from $296 in the fourth quarter of 2008, according to the Mortgage Bankers Association (MBA).”

Sacramento Bee – “California expected to cancel tax on forgiven mortgage debts” (4-6-10)

“Relief appears imminent for thousands of Sacramento homeowners hit with state tax bills for mortgage debts forgiven in 2009. State lawmakers said Monday they plan to cancel the state tax obligations with a vote Thursday.”

Inman - “Bankruptcies could exceed 1.5M this year” (4-6-10)

“More consumers filed for bankruptcy in March than in any other month after Congress overhauled federal bankruptcy laws in 2005, according to a release by the American Bankruptcy Institute. Monthly filings for March reached 149,268, a 34 percent increase from the month before when filings totaled 111,693, and a 23 percent year-over-year increase when consumers submitted 121,413 filings, the institute said. The findings are based on data from the National Bankruptcy Research Center.”

Housing Wire – “Lenders Look to Prevent Mortgage Fraud Before Origination With New Software” (4-6-10)

“Wells Fargo (WFC: 32.10 +1.87%) recently implemented mortgage fraud detection software, called LoanSafe Fraud Manager and developed by First American CoreLogic. At least 10 other lenders are following Wells’ lead and testing out the software to see how well it works against their current systems.”

Bloomberg - “U.S. Apartment Rents Decline as Vacancies at Record, Reis Says” (4-6-10)

“U.S. apartment rents dropped in the first quarter and the vacancy rate remained at a record as unemployment near a 26-year high limited tenant demand. Actual rents paid by tenants, known as effective rents, declined 1.5 percent from a year earlier, Reis Inc. said in a report today. Asking rents fell 1.6 percent, according to the New York-based property research firm. Vacancies were unchanged at 8 percent, the highest level since 1980, when Reis began tracking the number, said Victor Calanog, director of research.”

Looking Back:

One year ago, General Growth announced that its bankruptcy would not occur quickly. Altera Real Estate reported a total of 4,092 distressed properties in Orange County. One-third of California’s 267,000 foreclosure sales in 2008 were rental units

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The Norris Group Real Estate News Roundup 3/29/10

Monday, March 29th, 2010

Today’s News Synopsis:

A study from USC shows that immigrants are more attracted to mid-size cities. Goodman claims HAMP is bound to fail because of its failure to address negative equity. According to Realpoint, the delinquency rate among commercial mortgage-backed securities reached 6 percent last month. First American CoreLogic estimates the average home experiencing negative equity will not obtain positive equity until late 2015.

In The News:

NAHB - “New CRE Limits Could Jeopardize Housing and Economic Recovery” (3-29-10)

“Proposals by federal banking regulators to tighten restrictions on commercial real estate (CRE) lending could further exacerbate a severe acquisition, development and construction (AD&C) credit crisis that is choking off new home building activity and threatening the fragile housing recovery now under way, according to the National Association of Home Builders (NAHB).”

Orange County Register – “317,000 properties to get tax-cut review” (3-29-10)

“The Orange County Assessor’s office has announced plans to review the taxable value of 317,000 parcels this year to determine if their owners are eligible for further property tax cuts. That’s 35% of the nearly 900,000 real estate parcels in the county.”

Los Angeles Times – “Consumer spending up, sign of decent recovery” (3-29-10)

“The Commerce Department reported Monday that consumers boosted their spending by 0.3 percent in February. That was a tad slower than the 0.4 percent increase registered in January and marked the smallest increase since September. Still, the increase in spending was considered a respectable showing, especially given the snowstorms that slammed the East Coast and kept some people away from the malls. It marked the fifth straight month that consumer spending rose.”

Inman - “Study: Mid-size cities attract immigrants” (3-29-10)

“A growing number of immigrants are attracted to mid-size cities with lower housing costs, less competition for jobs, and increasing numbers of other immigrants, according to a recent study by the University of Southern California Lusk Center for Real Estate.”

Housing Wire – “Monday Morning Cup of Coffee” (3-29-10)

“Goodman criticized the first incarnation of the Making Home Affordable Modification Program (HAMP) because it did not address negative equity. According to her analysis, as long as borrowers are deeply underwater, they are unlikely to pay in the long term. Thus, the re-default rate will be very high, and the dead weight costs of foreclosure have not been avoided.”

Housing Wire – “New CMBS Projections Push 2010 Delinquencies into Double Digits” (3-29-10)

“In February 2010, the delinquency rate among commercial mortgage-backed securities (CMBS) pools reached 6%, up from 5.7% in January and, according to the analytics firm Realpoint, could be possibly heading toward 11-to-12% by the end of the year. Realpoint tracked delinquency data on $797bn of CMBS pools for the report. The total delinquent unpaid balance for CMBS increased $1.8bn in February, up to $47.8bn. It’s an almost 300% increase from one-year ago when $11.9bn was reported for February 2009 and is now 21 times more than the trough of $2.2bn in March 2007.”

Housing Wire – “Positive Equity Won’t Return For Most Underwater Borrowers Until 2015″ (3-29-10)

“First American CoreLogic estimates that the typical US homeowner who is in negative equity will not experience positive equity until late 2015 to early 2016. In severely depressed markets, the typical borrower in negative equity may not experience positive equity until 2020 or later. CoreLogic projects more than 11.3m — or 24% — of all residential properties with mortgages had negative equity at the end of the Q409. While the largest decreases in home prices appear to have already happened, it remains to be seen when borrowers will return to positive equity.”

Bloomberg - “Goldman Capitulation on Dollar Shows Reversal on U.S.” (3-29-10)

“The strengthening U.S. economy, subdued inflation and rising stock prices are propelling the dollar rally into its fifth month as traders seek refuge from Europe’s fiscal crisis and Japanese deflation. Goldman Sachs Group Inc. and Citigroup Inc. ended bets on a falling dollar last week after the trades lost 2.8 percent. Strategists are raising greenback forecasts at the fastest pace since last March, just before U.S. stimulus efforts that poured as much as $12.8 trillion into the economy ended the currency’s strongest rally in 28 years. Median predictions for the dollar against 47 currencies tracked in Bloomberg surveys rose an average of 1.4 percentage points in the month to March 24.”

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The Norris Group Real Estate News Roundup 3/15/10

Monday, March 15th, 2010

Today’s News Synopsis:

Builder confidence decreased by over 10 percent since the beginning of March. Sacramento home sales decreased by 26 percent from last year. According to LPS, the U.S. mortgage delinquency rate is currently at 10.25%. California contributed $2.6trn to the total $5.7trn of US housing wealth lost since the peak of 2006.

In The News:

NAHB - “Foreclosures Weigh on Builder Confidence in March” (3-15-10)

“Builder confidence in the market for newly built, single-family homes fell back two points to 15 in March as poor weather conditions and distressed property sales posed increasing challenges to both builders and buyers, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.”

Sacramento Bee – “A typical slow February for Sacramento home sales” (3-15-10)

“The Sacramento Association of Realtors reports this morning that home sales continue in their sluggish winter pattern, with 1,156 homes closing escrow during February in Sacramento County and the City of West Sacramento. February sales of existing homes were essentially flat from January, and down 26 percent from Feb. 2009, SAR reported. The median price of $179,900 was up from $170,000 in January and up 7.7 percent from Feb. 2009.”

Wall Street Journal – “Mortgage Fraud Declines but Remains Virulent” (3-15-10)

“First American CoreLogic, a real estate information supplier, compiles an index of the rate of fraud on home mortgages. A version of the index that excludes subprime loans peaked in 2007 at about 112 (on a scale that equates the early-2005 level to 100). It has since dropped to 84.”

Housing Wire – “Housing Recovery is Spelled R-E-O” (3-15-10)

“According to data from Lender Processing Services (LPS: 40.02 -1.43%), a whopping 7.4m loans are now non-current, compared to just 4.1m on average between January and June of 2008.”

Housing Wire - “Pace of Mortgage Delinquency Slowing: LPS” (3-15-10)

“The total loan delinquency rate of US mortgages is 10.25% as of January 2010 — a 2% increase from December 2009 and a 22.1% increase from January 2009, according to mortgage performance data and analytics provider Lender Processing Services (LPS: 40.02 -1.43%). Another 3.3% of foreclosure inventory brings the total non-current rate to 13.5% in January.”

Housing Wire – “In California, a Unique State of Mortgage Borrower Behavior” (3-15-10)

“The state contributed $2.6trn to the total $5.7trn of US housing wealth lost since the peak of the housing market in Q2 2006, according to US asset-backed securities research this week from Deutsche Bank.”

Bloomberg - “Housing Real-Estate Recovery Signaled as Fed Unwinds” (3-15-10)

“The U.S. housing market is poised to withstand the removal of government and Federal Reserve stimulus programs and rebound later in the year, contributing to annual economic growth for the first time since 2006. Increases in jobs, credit and affordable homes will help offset the end of the Fed’s purchases of mortgage-backed securities this month and the expiration of a federal homebuyer tax credit in April. Sales will rise about 6 percent this year, and housing will account for 0.25 percentage point of the 3.6 percent growth, according to forecasts by Dean Maki, chief U.S. economist for Barclays Capital in New York.”

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The Norris Group Real Estate News Roundup 2/24/10

Wednesday, February 24th, 2010

Today’s News Synopsis:

The MBA reports that mortgage loan application volume decreased 8.5 percent from last week. According to the Commerce Department, purchases of new single-family homes decreased by 11.2 percent in January. Informa Research Services announced that the average interest rate on 30-year fixed-rate jumbos dropped to 5.79%. Freddie Mac’s net losses for 2009 ended at $25.7bn.

In The News:

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (2-24-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 19, 2010.  The Market Composite Index, a measure of mortgage loan application volume, decreased 8.5 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 7.3 percent compared with the previous week.”

Los Angeles Times – “Jumbo mortgage market is beginning to thaw” (2-24-10)

“Two weeks ago, the average interest rate on 30-year fixed-rate jumbos dropped to 5.79%, a nearly five-year low, according to rate tracker Informa Research Services of Calabasas. It edged up to 5.88% on Tuesday, still very attractive by historical standards. The average is down from well above 7% in late 2008.”

Washington Post - “New home sales hit record low in January” (2-24-10)

“Purchases of new single-family homes dropped 11.2 percent in January from December to a seasonally adjusted annual rate of 309,000, the Commerce Department reported. Sales fell in every region of the country except the Midwest, and the raw number of new homes on the market rose for the first time in nearly three years.”

Inman - “CAR: Home prices up, sales down” (2-24-10)

“Median home prices increased 15 percent year-over-year in January, according to a report by the California Association of Realtors. Closed escrow sales of existing, single-family detached homes fell 10.6 percent year-over-year, to a seasonally adjusted annualized rate of 539,040 units, and fell 3 percent month-to-month, the report said.”

Housing Wire – “The GSEs Might Save Mortgage Rates After the Fed After All!” (2-24-10)

“Fed purchases since January 2009 consumed most of the new pass-through supply coming into the market from Fannie and Freddie (and a chunk of Ginnie’s too); Its demand has been a powerful tractor-beam pulling the spread between pass-through yields and mortgage rates over other high quality debt instruments to historic lows; Removing that demand could allow pass-through yields and mortgage rates to widen dramatically”

Housing Wire – “Backlog of California Homes Declines in January” (2-24-10)

“Nationwide, the credit rating agency Standard & Poor’s (S&P) estimated the “shadow inventory” of bank-repossessed properties, as well as distressed mortgages facing foreclosure, will take nearly three years to clear at the current national sales rate. As for the total amount of homes in the shadow inventory, Amherst Securities places the total at 7m. The Royal Bank of Scotland found 2.7m, and First American CoreLogic counted 1.7m.”

Housing Wire – “Freddie Mac’s Losses Narrow in Q409″ (2-24-10)

“Freddie Mac (FRE: 1.22 +1.67%) posted a loss of $7.8bn, or $2.39 per share, in Q409, bringing the government-sponsored enterprise’s (GSE) total loss in 2009 to $25.7bn. But Freddie said its net worth as of December 31, 2009 was $4.4bn, and no additional funding was required from the Treasury Department under the terms of the purchase agreement for the fourth quarter.”

Housing Wire – “NAR to Congress: Turn Fannie and Freddie into Non-Profits” (2-24-10)

“A trade organization for real estate agents, the National Association of Realtors (NAR) is recommending to Congress that the government-sponsored enterprises (GSEs) Fannie Mae (FNM: 1.02 +2.11%) and Freddie Mac (FRE: 1.22 +1.67%) be converted into non-profit secondary market authorities.”

Bloomberg - “Toll Says Loss Narrowed as Homebuilder Reduced Costs” (2-24-10)

“Toll Brothers Inc., the largest U.S. luxury-home builder, said its first-quarter loss narrowed as costs fell 31 percent. Orders almost doubled. The net loss for the three months ended Jan. 31 shrank to $40.8 million, or 25 cents a share, from $88.9 million, or 55 cents, a year earlier, the Horsham, Pennsylvania-based company said today in a statement. The average estimate of 10 analysts in a Bloomberg survey was for a loss of 29 cents a share.”

Looking Back:

One year ago, the CBIA announced that housing production fell to a record low. Ben Bernanke claimed that 2010 could be a year of recovery, if foreclosures stabilized. Case-Schiller reported that home prices declined at a record pace in the 4th quarter of 2009.

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The Norris Group Real Estate News Roundup 2/23/10

Tuesday, February 23rd, 2010

Today’s News Synopsis:

The NAR predicts that the commercial real estate market will not recover until after 2011. In California, single family home sales decreased by 3 percent during January. The Standard & Poor’s index shows that national home prices increased slightly during December. 702 banks made the ‘Problem List’ for the FDIC in 2009.

In The News:

NAR - “No Meaningful Recovery in Commercial Real Estate Before 2011″ (2-23-10)

“Lawrence Yun, NAR chief economist, said commercial real estate almost always lags the economy. ‘Because of the lingering impact from the deep recession over the past two years, vacancy rates will trend higher and many commercial property owners will need to make rent concessions,’ he said.”

CAR - “January sales and price report” (2-23-10)

“Existing, single-family home sales decreased 3 percent in January to a seasonally adjusted rate of 539,040 units on an annualized basis compared with December 2009. The statewide median price of an existing single-family home decreased 6.3 percent in January to $287,440, compared with December 2009. C.A.R.’s Unsold Inventory Index fell to 5.8 months in January, compared with 7.3 months in January 2009.

Los Angeles Times – “Home prices show small gain in December” (2-23-10)

“The Standard & Poor’s/Case-Shiller index of home prices in 20 metropolitan areas increased 0.3% from November on a seasonally adjusted basis, with 14 cities posting gains. Compared with a year earlier, the index was down 3.1% in December, but the year-to-year rate of decline moderated in all 20 cities.”

Housing Wire – “FDIC ‘Problem’ Banks Increased 27% in Q409″ (2-23-10)

“By the end of 2009, 702 banks made the ‘Problem List’ for the Federal Deposit Insurance Corp. (FDIC), a marked increase of 27% from 552 at the end of Q309. Additionally, the total amount of assets of insured institutions increased $137.2bn to $13.7trn in Q409. Bank investments in mortgage-backed securities (MBS) also increased by $44.8bn, overall, to $1.4trn.”

Housing Wire – “Lowe’s Profits Top $200m for Q409″ (2-23-10)

“Lowe’s Companies (LOW: 22.81 -1.13%), the world’s second largest home improvement retailer, reported profits of $205m, or $0.14 per share, for its fiscal fourth quarter ending January 29. The Q409 results are up 26.5% from one year ago, when Q408 net earnings were $162m, or $0.11 per share. For the fiscal year ending January 29, 2010, net earnings were $1.78bn, or $1.21 per share, down 18.8% from one year ago, when North Carolina-based Lowe’s earned $2.195bn. In Q309, Lowe’s reported net earnings of $344m.”

Housing Wire – “11.3m Homeowners Now Underwater: First American” (2-23-10)

“11.3m homeowners now owe more on their mortgages than the value of their home at the end of Q409, with the Sand States taking four of the top five negative equity, or underwater, markets according to research released by First American CoreLogic.”

MGIC - “MGIC to Lower Mortgage Insurance Rates for Good Credit Borrowers” (2-23-10)

“The new rates will be lower for borrowers with a credit score of 720 or greater and higher for borrowers with credit scores between 620 and 679. No change is expected for those with a score between 680 and 719, according to a form 8-K filed today with the Securities Exchange Commission.”

Housing Wire – “Home Depot Posts $342m Q4 Profit” (2-23-10)

“Home improvement retailer Home Depot (HD: 30.75 +1.42%) reported a profit of $342m, or $0.20 per share, for its fiscal year fourth quarter ending January 31. That’s an improvement from last year’s fiscal fourth quarter, when Home Depot lost $54m, or $0.03 per share. But it’s lower than Home Depot’s Q309 net earnings of $689m, or $0.41 per share. Home Depot said its sales performance was driven by gains in kitchen and bath, paint, flooring and plumbing as well as its international businesses.”

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