The Norris Group Blog

Today’s News Synopsis:

According to the CBIA, condominium sales were 39 percent higher from last year. The MBA’s weekly survey shows that mortgage loan application volume increased by 14.3 percent from last week. Jumbo residential mortgage-backed securities increased to 9.2 percent from December 2008 to December 2009. All but two of the Federal Reserve districts reported increased activity or improved conditions.

In The News:

CBIA - “California New-Home Market Dips Slightly in November, CBIA Announces” (1-13-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 4 percent below November 2008, representing a less impressive result than last month’s year-over-year increase, but was nevertheless an improvement from most months in 2009. During November, 1,860 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,934 in November 2008. Sales of single-family homes were down by 18 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were up 8 percent and sales of condominiums were 39 percent higher than a year ago thanks to strong sales at projects in the Los Angeles and San Diego areas.”

Mortgage Bankers Association – “Mortgage Refinance Applications Increase While Purchase Applications Remain Flat in Latest MBA Weekly Survey” (1-13-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 8, 2010.  The Market Composite Index, a measure of mortgage loan application volume, increased 14.3 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 66.0 percent compared with the previous week, which was a shortened week due to the New Year’s holiday.”

San Francisco Chronicle – “State adopts greenest building codes in U.S.” (1-13-10)

“The new code, dubbed Calgreen, will take effect next January and requires builders to install plumbing that cuts indoor water use, divert 50 percent of construction waste from landfills to recycling, use low-pollutant paints, carpets and floorings and, in nonresidential buildings, install separate water meters for different uses. It mandates the inspection of energy systems by local officials to ensure that heaters, air conditioners and other mechanical equipment in nonresidential buildings are working efficiently. And it will allow local jurisdictions, such as San Francisco, to retain their stricter existing green building standards, or adopt more stringent versions of the state code if they choose.”

Housing Wire – “Prime Jumbo RMBS Delinquencies Swell to 9.2%: Fitch” (1-13-10)

“Delinquency of more than 60 days among prime jumbo residential mortgage-backed securities (RMBS) nearly tripled to 9.2% in December 2009, from 3.2% at the end of 2008, according to Fitch Ratings.”

Housing Wire – “GSEs Could Lose $448bn of MBS Guarantee Business, Says Amherst” (1-13-10)

“Losses on the combined credit-guarantee books of government-sponsored enterprises (GSEs) Freddie Mac (FRE: 1.41 +2.17%) and Fannie Mae (FNM: 1.14 +1.79%) could reach 9.6% – or $448bn – according to market analysis by Amherst Securities Group.”

Housing Wire – “Housing Sales Up, Prices Remain Steady: Beige Book” (1-13-10)

“All but two Fed districts reported increased activity or improved conditions, with Philadelphia and Richmond seeing mixed results. In the December 2 edition of the Summary of Commentary on Current Economic Conditions, commonly called the Beige Book, eight districts reported an uptick in their perspectives economy. The book is published eight times a year and is a nationwide economic indicator compiled from the 12 Fed districts.”

Housing Wire – “Government to Earn Billions on Bailouts” (1-13-10)

“The US Treasury Department expects profits of at least $19bn from bank investment programs under the Troubled Asset Relief Program (TARP), according to market commentary Wednesday by the American Bankers Association (ABA). Originally projected to cost $76bn according to the ABA, the outlook for TARP bank programs was updated in December in anticipation of actual profits.”

Housing Wire – “FinestExperts Ranks Top 2010 Real Estate Investment Markets” (1-13-10)

“FinestExpert.com named Dallas-Fort Worth as the hottest real estate investment market for 2010. After analyzing more than 10,000 real estate markets to identify stable, growth-oriented for investors, San Francisco-based FinestExpert.com formed its first top-20 hottest real estate investment market list for 2010.”

Housing Wire – “Cancelled Foreclosures Outnumber Sales in California: ForeclosureRadar” (1-13-10)

“The amount of California foreclosure cancellations increased 26.5% in December to 13,243, primarily due to loan modifications. And for the first time this number overtook foreclosures reaching real-estate owned (REO) status, according to ForeclosureRadar, which tracks foreclosure activity in the state. In December, the amount of foreclosures heading back to the banks, REO, dropped 11.9% from the previous month to 12,437. Significant declines in foreclosure discounts by lenders drove the decrease in sales to third parties, according to the report.”

Bloomberg - “Obama to Announce Fee on 20 Banks to Recoup TARP” (1-13-10)

“President Barack Obama will announce tomorrow his intention to impose a fee on roughly 20 of the country’s largest banks and financial institutions to help recoup taxpayer bailout money and trim the federal budget deficit. Obama will outline his proposal to raise as much as $120 billion at 11:45 a.m. local time at the White House, Obama’s press secretary, Robert Gibbs, told reporters. Gibbs said the president’s economic team has worked on a structure to prevent the levy from being passed onto consumers.”

Bloomberg - “Real Estate Bull Laub Sees Unprecedented Workout From Bad Debt” (1-13-10)

“Kenneth Laub has been through three commercial real estate boom and bust cycles during almost five decades as a broker and consultant to corporations such as Hess Corp. and International Paper Co. He says the current downturn will overshadow all of the others, Bloomberg Markets reports in its February 2010 issue.”

Looking Back:

One year ago, the NAHB encouraged congress to use a portion of the $700 billion bailout to increase credit for home purchases, and to stem foreclosures. California lost a total of 144,000 people from 2008 to 2009. Ben Bernanke warned that a fiscal stimulus would not cause an economic recovery. In November of 2008, 4 percent of homes were bought with adjustable rate mortgages.