Linking ≠ endorsement. Enjoy and share:
- FRB: Beige Book – September 4, 2013
Real Estate and Construction summary:
Activity in residential real estate markets increased moderately. The pace of sales of existing single-family homes continued to increase moderately in most Districts. Sales activity in New York City's co-op and condominium market was described as unusually strong in July and August, and the Cleveland District reported that year-to-date sales of existing single-family homes were up substantially relative to the same period last year. Reports from several Districts suggested that rising home prices and mortgage interest rates may have spurred a pickup in recent market activity, as many "fence sitters" were prompted to commit to purchases. Sales of new single-family homes stabilized during the past few months in the Cleveland District after accelerating earlier in the year. New home sales declined slightly in parts of the Philadelphia and Richmond Districts in July. Philadelphia conveyed that some borrowers apparently preferred to lock in a mortgage rate for an existing home rather than wait for a new home to be completed and chance higher mortgage rates. Home prices climbed in most Districts. Richmond and Boston reported that houses in some areas were staying on the market fewer days and increasingly receiving multiple offers. New York noted that bidding wars were common in the Buffalo area. Many Districts reported that limited inventories of desirable properties contributed to upward price pressures. Single-family home construction was strong in the Minneapolis and Dallas Districts, and Chicago reported that a number of builders are planning new developments to begin later this year. However, several Districts noted constraints on the construction of single-family homes. San Francisco pointed to shortages of construction workers. In the Kansas City District, some building materials, such as drywall and roofing shingles, were in short supply.
Demand for nonresidential real estate increased. Office vacancy rates a nd other indicators in markets for office space improved modestly in the major metropolitan markets in the New York, Richmond, and St. Louis and Districts. Rents for Class B office space in Manhattan have risen more than 10 percent over the past twelve months. Demand for commercial real estate showed strong growth in the Dallas District and moderate growth in the Minneapolis District. Both Districts reported new plans for construction of industrial space. Philadelphia, Cleveland, Richmond, Atlanta, Chicago, Kansas City, and San Francisco reported modest growth in demand for commercial real estate. Philadelphia highlighted a shift in recent leasing activity toward larger commercial spaces. The Boston, Philadelphia, Cleveland, Atlanta, Dallas, and San Francisco Districts all reported increases in construction of multifamily residential properties.
"…. many "fence sitters" were prompted to commit to purchases"? That runs contrary to the data we've seen. Of course, we're speaking in the aggregate, and perhaps the data was national where the Fed is referring to more regional/local.
Read the source article … http://www.federalreserve.gov/monetarypo licy/beigebook/beigebook201309.htm
- The Failure of Free-Market Finance by Adair Turner – Project Syndicate
Nearly the whole world with money was over leveraged but especially the middle and lower classes because they were the lesser able to afford a crash, the lesser protected, the ones with less political power, the ones with less ability to purchase such dominant control.
Five years after the collapse of the US investment bank Lehman Brothers, the world has still not addressed the fundamental cause of the subsequent financial crisis – an excess of debt. And that is why economic recovery has progressed much more slowly than anyone expected (in some countries, it has not come at all).
Most economists, central bankers, and regulators not only failed to foresee the crisis, but also believed that financial stability was assured so long as inflation was low and stable.
When times are good, rising leverage can make underlying problems seem to disappear. Indeed, subprime mortgage lending delivered illusory wealth increases to Americans at a time when they were suffering from stagnant or falling real wages.
But in the post-crisis downswing, accumulated debts have a powerful depressive effect, because over-leveraged businesses and consumers cut investment and consumption in an attempt to pay down their debts.
- Political games hurt homeowners in California | Smart Real Estate Investing
Homeowners who sold their homes in a short sale in the past eight months will be further penalized by being forced to pay state income taxes on money they never received, the California Association of Realtors (CAR) said today. Senate Bill 30 conforms California tax law to federal tax law, which already says sellers can't be taxed on forgiven mortgage debt. SB 30 failed to pass out of the Assembly Appropriations committee last Friday. The vote on the bill was along party lines with Democrats voting "no" and Republicans voting "yes." "We are disappointed that California Assemblyman Mike Gatto (D-Pasadena) failed to show the leadership necessary to provide relief to distressed homeowners who are already in dire financial trouble," said CAR President Don Faught. "These are real families in real financial need who may well be forced into bankruptcy by an unresponsive legislature. To heap an unfair tax bill on top of the pain and emotional duress of losing a home is unconscionable." Under current state law, when a lender forgives mortgage debt in a short sale, the seller must pay state income tax on the amount of forgiven debt. The previous California exemption lapsed at the end of 2012, so forgiven mortgage debt on short sales occurring in 2013 is considered taxable state income. The federal government does not charge federal income tax, and neither should the state. Unfortunately, Senate leadership, in an act of political gamesmanship, linked the enactment of SB 30 to a new tax measure in an effort to extort CAR's support for that tax measure.
Read the source article … http://www.smartrealestateinvesting.com/ political-games-hurt-homeowners-in-calif ornia
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