News Alerts. Sept. 30, 2013. Afternoon Edition. #RealEstate

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  1. Tech's Momentum Will Continue: CBRE – Daily News Article – GlobeSt

    Tech-office market is HOT!

    By Paul Bubny … As Yasukochi's observation and the rent growth numbers make clear, the benefits of the tech boom potentially extend well beyond the Bay Area and Manhattan's Silicon Alley. "Emerging and high potential markets represent opportunity for both occupiers and investors," according to CBRE's "US Tech-Twenty" report. Atlanta, Chicago, Los Angeles and Baltimore all have moved significantly toward growth leadership over the past year, while their office markets are showing stronger performance.

    It must be understood though that these are tech centers, not the entire country's office market, right?

    Read the source article … http://www.globest.com/news/12_701/natio nal/office/Techs-Momentum-Will-Continue- CBRE-338070.html


  2. Three Takeaways on the FHA's Financial Woes – Developments – WSJ

    By Nick Timiraos … The Federal Housing Administration, a major backstop of the U.S. mortgage market over the past five years, will require an infusion from the Treasury of at least $1 billion at the end of the month, The Wall Street Journal reported Wednesday, citing people familiar with the situation.

    The news isn't exactly a surprise to many that have followed the agency closely over the past five years, but it represents the latest reminder of the heavy role the government has played trying to clean up after the housing bust.

    The FHA is losing market share. The New Deal-era agency has backed as many as one third of new loans for owner-occupant buyers in recent years, and housing officials have repeatedly said they don't want the FHA to play as large a role in the market. That's finally happening, in part because the agency has continued to boost the monthly and upfront insurance premiums charged to borrowers. This has made private-sector insurance options more attractive.

    The problem for the FHA, however, is that this means less revenue is coming in the door.

    Read the source article … http://blogs.wsj.com/developments/2013/0 9/26/three-takeaways-on-the-fhas-financi al-woes/


  3. Real estate isn't forming another bubble, experts say, but it's likely to play a hand in the next crash | cleveland

    By Michelle Jarboe McFee … speculation about a potential wave of commercial distress as 10-year loans granted during the boom years come due.

    Commercial real estate, a popular place to park money in a low-return investment climate, has experienced a stronger rebound. Despite all the doomsday predictions, the industry never saw a typhoon of default and foreclosure.

    Research from Green Street Advisors, a firm that tracks publicly traded real estate companies, shows that commercial property values actually have surpassed their 2007 peak. Brokers say investors are snapping up single-tenant buildings, medical properties and strong shopping centers.

    But they're making those deals with more scrutiny, and less debt, than they would have before 2008.

    That sounds like an overstatement about the current commercial situation, which is improving but still lags with some exceptions such as but not limited to multi-family, senior housing, and medical. Office is still down in many areas, and warehouses are booming but mostly where needed as fulfillment for Internet orders. Commercial is coming back, but our reading of the general reporting on it is that it's been much slower than residential and still down as a whole.

    Michelle may have access to better info though.

    Read the source article … http://www.cleveland.com/business/index. ssf/2013/09/real_estate_isnt_forming_ano th.html


  4. 3 Reasons the Labor Market Will Continue to Frustrate the Fed | BlackRock Blog | Global Market Intelligence

    By Russ Koesterich … look under the surface and three factors still suggest a labor market that is far from healthy and that is likely to continue to frustrate the Fed:…

    …The Fed knows all of this and, given its dual mandate, is likely to continue to err on the side of more rather than less stimulus. Last week may not be the last time the Fed surprises with a dovish decision.

    The Fed needs to stop pushing on a string and rather use its tools in ways that force lenders to lend to worthy small businesses and start-ups for productive, profitable projects that will put more people to work earning good wages and salaries.

    Read the source article … http://www.blackrockblog.com/2013/09/26/ 3-reasons-labor-market-continue-frustrat e-fed/


  5. 19 charts that will restore your faith in the global economy – Quartz

    Do you want some positive news, optimistic news? This should do it.

    We know, we know. It's been a rough half decade for the global economy. The US financial crisis bled into a global recession, Europe spiraled into a debt crisis that threatened to fracture the common currency, and recently, some once-hot emerging markets have been having real difficulties (We're looking at you, India).

    But the world economy is not doomed. In fact, you don't have to search too far to find widespread signs that things are going reasonably well.

    Seriously, look:…

    Read the source article … http://qz.com/128924/19-charts-that-will -restore-your-faith-in-the-global-econom y/


  6. The Greek Economic Crisis and the Experience of Austerity: A Strategic Analysis | Levy Economics Institute

    Employment in Greece is in free fall, with more than one million jobs lost since October 2008—a drop of more than 28 percent. In March, the "official" unemployment rate was 27.4 percent, the highest level seen in any industrialized country in the free world during the last 30 years.

    In this report, Levy Institute President Dimitri B. Papadimitriou and Research Scholars Michalis Nikiforos and Gennaro Zezza analyze the economic crisis in Greece and offer policy recommendations to restore growth and increase employment. This analysis relies on the Levy Institute's macroeconomic model of the Greek economy (LIMG), a stock-flow consistent model similar to the Institute's model of the US economy. Based on the LIMG simulations, the authors find that a continuation of austerity policies would decrease GDP and increase unemployment. They find recent International Monetary Fund and European Commission projections for the Greek economy overly optimistic, and recommend a recovery strategy, similar to the Marshall Plan, to increase public consumption and investment—a strategy centered on an expanded direct public-service job creation program.

    An unemployment rate of 27.4% is very troubling. That's a Great Depression rate.

    Read the source article … http://www.levyinstitute.org/publication s/?docid=1836


  7. Aussies Swept by Rental-Home Mania Raising Bank Risks – Bloomberg

    Is Australia in a housing bubble?

    Dharmendra Singh has spent A$1.3 million ($1.2 million) since July on two houses 39 kilometers (24 miles) northwest of Sydney, drawing on an existing mortgage to pay a deposit on one and taking out two new loans.

    "Low interest rates and rental yields make it easy," said Singh, who now has three investment properties with his wife Pranita. "The rental and tax savings can pay off your mortgage. You just sit tight and wait for the property to appreciate."

    'Systemic Risk'

    The banks are "substantially more exposed to investment property loans than peers," UBS AG analysts, led by Jonathan Mott, said in a research note Sept. 24. Investment property accounts for 32 percent of Australian banks' mortgage books, compared with 20 percent in New Zealand and 12 percent in the U.K., they said.

    "Australia's large exposure to a very highly leveraged landlord population is a significant systemic risk," the UBS analysts said, while noting that Australian banks' mortgage books are generally considered to be very high quality.

    The price gains have made Australian homes the sixth-most overvalued globally and the house-price-to-income ratio was 21 percent above its long-term average, the Organisation for Economic Co-operation and Development said in in [sic] May.

    Is there really enough of a housing shortage to merit such appreciation?

    Also, many people have been reporting for quite some time that the Australian mining sector, which has been huge, is close to a severe downturn. Any such downturn would upset the Australian economy greatly and undercut the whole premise for the housing market's high prices.

    Read the source article … http://www.bloomberg.com/news/2013-09-26  /aussies-swept-by-rental-home-mania-rai sing-bank-risks.html


  8. Asia's Rebalancing Act by Lee Jong-Wha – Project Syndicate

    By Lee Jong-Wha … SEOUL — Rapid economic growth in China undoubtedly benefits the rest of Asia. Indeed, strong Chinese demand has supported its trading partners' export-led growth for much of the past three decades. But now, faced with a slowdown in China and significant downside risks there, the rest of Asia must abandon over-reliance on export-oriented development strategies and strive to ensure stable and sustainable growth domestically and regionally.

    China's vulnerabilities and risks — stemming from property bubbles, shadow banking, and local-government debt — have triggered concerns about a crisis not only there, but also in neighboring Asian countries. Some, indeed, now predict a Chinese banking or fiscal disaster; others predict long-term stagnation equivalent to Japan's lost decades.

    These "hard landing" scenarios are extreme. But the road ahead is bumpy and uncertain.

    The article is packed and a quick read.

    Read the source article … http://www.project-syndicate.org/comment ary/the-risks-for-asian-growth-from-chin a-s-slowdown-by-lee-jong-wha


  9. 3 Rent vs. Buy Market Myths | Trulia Pro Blog

    We like this post, but keep in mind that Trulia is working with a very finite set of variables concerning which your particular situation might not fit as well as the next person's. For instance, how much time will you spend on your owned home that you would not spend renting and where that time might be used while renting and in pursuit of income? Is Trulia's Rent vs. Buy Calculator actually comparing apples to apples in all cases?

    It doesn't ask whether you'll be maintaining the property yourself and then what you'll do with the time if you don't. What if the time you spend on private investments actually goes south, so to speak. You'd have been better off mowing the lawn.

    This is not a huge deal, but we just don't want to leave it unaddressed, leave people with the false impression that because Trulia's Rent vs. Buy Calculator says, it must be true.

    Read the source article … http://pro.truliablog.com/buyers/rent-vs -buy-market-myths/


  10. NMHC Research Notes: The State of Multifamily Debt Finance – – NMHC – National Multi Housing Council

    This is a good overview of the ups and downs of the GSE- versus non-GSE-mortgage market.

    There are neither institutions in the commercial mortgage market that correspond to Freddie Mac and Fannie Mae nor anything comparable to FHA. While there is a federal "backstop" for the banking industry in the form of the Federal Reserve, federal deposit insurance and considerable regulation of banks, S&Ls and insurance companies, none of that is specific to the commercial mortgage market, making the commercial debt market a little more volatile by comparison.

    … Without the GSEs or FHA, the residential mortgage market would presumably look a lot like the commercial mortgage market.

    Read the source article … http://www.nmhc.org/Newsletter.cfm?ItemN umber=61422


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