16,208 new and resale houses and condos sold in Southern California in November. The NAR claims 9 of the 10 most cost-effective home repair projects in terms of value recouped are exterior replacement projects. Keefe, Bruyette & Woods expects revenue from multifamily real estate investment trusts to grow at an annual rate of 4.6% in 2011. Investor confidence in U.S. commercial property is the highest since 2007, according to Bank of America.
“Builder confidence in the market for newly built, single-family homes remained unchanged in December from the previous month at 16 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.”
“A total of 16,208 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 3.2 percent from 16,744 sales in October, and down 15.5 percent from 19,181 in November 2009, according to MDA DataQuick of San Diego.”
“Nine of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. The steel entry door replacement remained the project that returned the most money, with an estimated 102.1 percent of cost recouped upon resale; it is also the only project in this year’s report that is expected to return more than the cost. The midrange garage door replacement, a new addition to the report this year, is expected to recoup 83.9 percent of costs. Both projects are small investments that cost little more than $1,200 each, on average”
“Revenue brought in by multifamily real estate investment trusts is expected to grow at an annualized rate of 4.6% in 2011, according to an outlook released by investment bank Keefe, Bruyette & Woods. That estimate is up from the firm’s previous estimate of 3.6% released in early December.”
“The rule changes the definition of ‘community development’ in CRA regulations to include loans, investments and services in areas targeted by the Department of Housing and Urban Development’s Neighborhood Stabilization Program. According to the final rule, high levels of foreclosures are expected into 2012 and beyond, which will continue to effect low- and moderate-income areas.”
“Investor confidence in U.S. commercial property is the highest since the 2007 market peak, a sentiment reflected in bonds of real-estate companies that own everything from New York skyscrapers to California strip malls. Yields on debt issued by real-estate investment trusts average 210 basis points more than Treasuries, the least since Nov. 12, 2007, according to Bank of America Merrill Lynch index data.”
Looking Back:
One year ago, home sales decreased by 13.3 percent in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange County. The Federal Reserve planned to leave interest rates at the record low. Research from Trulia and RealtyTrac showed that 43% of U.S. adults would consider buying foreclosed property. A survey from JBREC showed that 57 percent of home builders expected to receive more revenue in 2010 than 2009.
HAMP’s permanent loan modifications increased 5.9% by the Bank of America, while the number of applications for mortgages increased 13%. On the same note, according to the Mortgage Bankers Association the number fo refinancings for mortgages increased 17.1% in the previous week, while the amount of people filing for bankruptcy increased 20%. Fannie Mae and Freddie Mac began searching for any bad loans or dishonest loan applications, while in other news Barney Frank believes Fannie Mae and Freddie Mac should no longer be allowed to operate. However, there are no current plans for this to happen as the White House is trying to fix the problems. Also, as the demand on homes decreases, the merging and aquisition of homebuilders may rise. On a similar note, Veri-tax is now owned by Blue Horizon Capital. Finally, the Fed’s have come up with a plan to prepare for an increasing decline in the economy by using money made from securities to buy Treasuries.
“Bank of America (BAC: 13.4305 +1.67%) pushed its total number of permanent mortgage workouts under the Home Affordable Modification Program (HAMP) to 76,300 in July, a 5.9% increase from June.”
“The number of mortgage applications in the U.S. increased last week, propelled by a surge in refinancing as borrowing costs hovered near record lows. The Mortgage Bankers Association’s index rose 13 percent in the week ended Aug. 13, the Washington-based group said today. Refinancing jumped 17 percent to reach the highest level since May 2009, while purchases fell 3.4 percent.”
“Transaction prices of commercial properties sold by major institutional investors surged over 17 percent in the second quarter of 2010, according to an index developed and published by the Center for Real Estate at the Massachusetts Institute of Technology (MIT).”
“Fannie Mae and Freddie Mac should be abolished but this has to be done over a period of time, Rep. Barney Frank, chairman of the House Financial Services committee, told CNBC on Tuesday. Frank agreed that phasing out the housing behemoths would help bolster private mortgage financing, but stressed that the process would take time.”
“Homebuilder takeovers may increase as tumbling demand for new houses and a faltering U.S. economic recovery spur companies to consolidate to gain market share, according to Citigroup Inc.”
“For on-the-go home buyers, The Real Estate Book / RealEstateBook.com, the leading publisher of real estate information online and in print in North America, launches a new application that provides iPhone, iPod Touch and iPad users with access to all its listings – millions of homes for sale across the U.S. and around the world.”
“Blue Horizon Capital, a private investment firm based in Los Angeles, California, acquired Tustin, California-headquartered Veri-tax LLC late last month. A provider of tax verification and fraud management solutions for the mortgage lending and consumer credit industry, Veri-tax clients include two of the nation’s top four banks, as well as a slew of other lenders, originators, and financial institutions.”
“While mortgage delinquencies are easing, banks are facing a new round of losses from loans made just before the financial crisis, and the fight to keep them off their balance sheets is intensifying. Leading the charge to make originators repurchase their loans are Fannie Mae and Freddie Mac, the two government-owned finance agencies that guaranteed the mortgages. The firms are sorting through delinquent loans for signs of any violations of the representations and warranties, known as “reps and warranties.” In essence, they are looking for lies made by borrowers or lenders in loan applications.”
“Will Fannie Mae and Freddie Mac still be here in three years? Or will they be replaced by a new federal mortgage agency? Will the government begin a grand exodus from the housing market and leave the American Dream to the private sector?”
“Lenders seized fewer homes in July for a third straight month, repossessing nearly 10% fewer homes than in June. Meanwhile, default notices filed against homeowners who have missed three or more house payments increased 9% last month from June’s levels.”
“Real estate data provider Altos Research says its newest housing market report confirms what the company has been saying for some time: the mini “boom” of this spring was created by seasonal demand, with some extra help from the federal homebuyer tax credits.”
“The Deloitte Consumer Spending Index, which tracks consumer cash flow to predict future spending, declined for the third straight month in July due to weaknesses in the post-tax credit housing market.”
“The national mortgage loan delinquency rate – measuring the ratio of borrowers 60 or more days behind on their home loan payments – fell again in the second quarter of 2010, suggesting the credit conditions in the housing sector have begun to stabilize, according to TransUnion.”
“Realogy Corporation, a global provider of real estate and relocation services, announced that its chief executive officer Richard A. Smith traveled to Washington, D.C., today to participate in the Conference on the Future of Housing Finance. The invitation-only event is being hosted by Secretary of the Treasury Timothy Geithner and Secretary of Housing and Urban Development (HUD) Shaun Donovan.”
“The Fed’s move to begin buying long-term Treasuries with proceeds from maturing mortgage-backed securities opens up the possibility of quantitative easing if the economy declines further, according to Deutsche Bank.”
“The US does not intend to wind down completely Fannie Mae and Freddie Mac, the large government-sponsored mortgage companies that are eating up billions of taxpayer dollars, given the fragile state of the housing market.”