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- In a Healthy Apartment Market, Pockets of Worry - NYTimes.com
Minneapolis-St. Paul is hardly the only market being overrun by apartment construction as developers and lenders pursue new projects nationwide to sate pent-up demand and what they believe is a generational shift toward more renting and less owning.
Nor is it the only market where the overbuilding alarm is ringing. Developers will start construction on 260,000 units nationwide this year, about 20,000 more units than are typically started during nonrecession years, said Ron Witten, owner of the apartment researcher and consultant Witten Advisors, based in Dallas.
Yes, but low wages, high unemployment, and high student debts will cut two ways. They will keep more people living together with family and groups of friends packed in and they will keep rents lower than they otherwise might rise.
- Mortgage Rates Dropping At Fastest Pace Since Before 2009
Mortgage rates are down 0.35 percentage points over the past three weeks. That means that anyone who bought a home in June or July of this year could potentially save money via a refinance at today's rates.
The window to refinance, though, may be closing. There are a lot of events this week which could affect mortgage rates for the worse -- starting with the government shutdown.
To date, the shutdown has been good for conventional and VA mortgage rates. During the shutdown, furloughed workers are earning smaller paychecks and government agencies are spending less money. Both outcomes are slowing the U.S. economy which, so far, has boosted demand for mortgage bonds.
In addition, the U.S. Treasury will soon exceed its maximum debt load. This likelihood is affecting rates, too. As the October 17 deadline nears, businesses and consumers are expected to seek "safe" investments -- a class which include mortgage-backed securities.
The "Default Debate" help mortgage rates, too, up until the point where it doesn't.
A true default would be devastating for U.S.-backed debt.
Mortgage rates would soar on a default. Conventional loans could easily move past 6 percent. The same is true for FHA and VA mortgage rates.
- Top NYC REITs | Vornado Realty Trust | SL Green Realty
New York-centric real estate investment trusts took a hit in the third quarter thanks to "taper talk" from the Federal Reserve, according to the investment banking firm Sandler O'Neill + Partners.
In May, Federal Reserve Chairman Ben Bernanke announced that the Fed was considering scaling back its $85 billion per month bond-buying stimulus program, which has kept interest rates at record lows. Since then, REITs have underperformed in comparison to the Standard & Poor 500 Stock Index, according to Alexander Goldfarb, an analyst at Midtown-based Sandler O'Neill.
"Since Bernanke gave his May speech, anything interest rate-related has been hit hard," Goldfarb said, adding that REITS and other yield-bearing instruments have "definitely felt the brunt."
- States with the most 'zombie homes' - Slide Show - MarketWatch
There are more than 770,000 homes in foreclosure in the U.S. According to the latest data provided by RealtyTrac, roughly one in five of these, more than 150,000 in all, has been abandoned by its owners but remains unclaimed. These properties are referred to by the industry as "zombie" homes.
RealtyTrac provided 24/7 Wall St. with the latest foreclosure data by state, including the number of homes in foreclosure and the proportion of those homes that are vacant. In some states, the problem of zombie homes is particularly severe. In Indiana, for example, roughly 30% of the 16,618 foreclosed homes have been abandoned. 24/7 Wall St. identified those states with more than 10,000 homes in foreclosure, and at least a one-in-five foreclosure vacancy rate. These are the seven states with the most zombie homes.
- Capital Markets Report: Global Capital Chasing Real Estate Deployment Close To Peaking - CoStar Group
Central bank policies such as Quantitative Easing (QE) have artificially increased the attractiveness of real estate, relative to fixed income on a relative-value basis, in the eyes of multi-asset class investors.
The large scale asset purchase program of predominantly gilts and government-backed securities increased the value of the assets purchased, which lowers their yield.
The eventual unwinding of QE in the U.S. and throughout Europe is likely to reverse this positive trend, to some extent, with bond yields once again rising, reducing real estate's relative attractiveness, which is also expected to push out property yields, particularly in prime markets which have benefits from considerable yield compression in recent quarters.
Indeed, co-authors of the report - Nigel Almond, DTZ's head of strategy research, and analyst Lulu Yang - pointed to this probable outcome of QE unwinding: "The current attractiveness of real estate markets globally reflects the current low bond yield environment.
"Under a scenario in which we see a stronger than expected economic recovery, we could see Central banks respond by pulling quantitative easing sooner than planned with bond yields rising more quickly. Under such a scenario2 rental growth could suffer and yields could rise towards the end of our forecast period making markets less attractive as expected returns fall. This could impact the deployment of capital and fresh equity raising."
- Homeowners hope to cash in big on hot housing market, but buyers aren't biting on overpriced homes - VEGAS INC
Buyers increasingly are ignoring overpriced listings while homeowners who figured they'd sell to investors or others willing to pay anything are discovering that nobody's biting.
Wall Street investors had been buying cheap homes in bulk to turn into rentals but now are paring down on local purchases because of the rising prices they helped create.
Earlier this year, listings often received a dozen or more bids, many submitted sight unseen by investors. That frenzy has all but stopped, real estate agents say. ...
... No city can sustain a skyrocketing market forever, especially Las Vegas, which still has a sluggish economy and, as of July, a 9.7 percent unemployment rate.
Jobs and wages are key, but notice how much impact the pullback by institutional investors has made in slowing a building bubble.
- Next front to fight flood insurance rate hikes: lawsuits | Tampa Bay Times
The Florida Realtors this summer changed sales contracts to alert buyers they may need to get a flood certification to obtain flood insurance. By getting the certification, buyers should now know exactly how much their new premium will be.
The new contract language also makes a buyer's offer contingent on obtaining flood coverage by a certain date at a price not to exceed a cap that is written into the contract.
Investment rule: Always check flood-zone and other hazards info and insurance rates for covering the same.