News Alerts. Oct. 21, 2013. Evening Edition. #RealEstate

Linking ≠ endorsement. Enjoy and share:

  1. Roads Less Travelled – The Economist News Alerts. Oct. 21, 2013. Evening Edition. #RealEstate

    Paying for the public roads to your real estate:

    PAYING for roads in the United States was once straightforward. Petrol (gasoline) taxes, easy to administer and collect, were directed into the federal Highway Trust Fund. Those revenues were in turn distributed to the states for maintenance and investment. State petrol taxes provided further funds. And because petrol consumption was a rough proxy for road use, the system satisfied the principle that consumers should pay for a product in proportion to their use of it.

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  2. Board’s quake-insurance strategy is recipe for disaster –

    Question: Our association’s board downright refuses to purchase earthquake insurance. Instead they’ve instructed every owner, whether of a condominium, a single-family dwelling or a vacant lot in our development, to purchase loss assessment coverage, thinking if a big earthquake happens they’ll specially assess every owner and the problem will be solved. What is loss assessment coverage, and will this work?

    Answer: Gambling with titleholder assets is a fool’s game. As fiduciaries who are responsible for overseeing other people’s assets, the board directors have a duty to look after the best interests of the association and its owners, to safeguard against future loss and liability and to provide sound advice to owners based on reasonable investigation and consultation with experts. The plan you describe appears to be an attempt by the board to bypass duties owed to all owners. That plan, however, is not a plan — it is a recipe for disaster.

    Source …,0,2776783.story

  3. Regulators weigh proposal for minimum 30% down payments on loans –

    WASHINGTON — Federal agencies haven’t been functioning much this month, but six of them are looking at a proposal that could squeeze huge numbers of buyers out of the mortgage market: a mandatory 30% down payment for borrowers who seek the best rates and terms.

    Just how much better would those “best rates and terms” be? Without knowing that, isn’t it difficult to take a position?

    Source …,0,6931943.story

  4. Bad And Good News On Euro Area Inflation News Alerts. Oct. 21, 2013. Evening Edition. #RealEstate

    The euro area average figure of just 1.1% is a cause for concern because it is so low — only a little over half what the ECB (rightly) considers compatible with its goal of maintaining price stability. Moreover, it has been falling rather continuously over the year. This is no surprise given high and rising unemployment and the huge amount of slack in the economy. If circumstances were different — a “normal” downturn — below-target inflation might be good news, in that it signals that the central bank or fiscal policymakers have scope to loosen policy. But in the current context of a liquidity trap and with austerity certain to continue, albeit in milder form, it is worrying. It implies low pricing power for firms, and thus limited incentive to invest, virtually no disincentive to postpone purchases and, not least, very slow erosion of the real value of outstanding debt.

    There is some good news, though.

    The remainder of the article is short but somewhat technical. It is insightful though.

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  5. Reviewing the “Too Low For Too Long” Evidence | Economics One News Alerts. Oct. 21, 2013. Evening Edition. #RealEstate

    In her article “Alan Greenspan: What Went Wrong” in the Wall Street Journal Alexandra Wolfe considers whether monetary policy played a role in exacerbating the housing boom going into the financial crisis by holding interest rates “too low for too long.” I’ve argued that it did (along with regulatory lapses) and wrote about it in a 2007 Jackson Hole paper.

    Alan Greenspan disagrees with that paper, as Alexandra Wolfe reports, but she also reports that “Prof. Taylor stands by the paper in which he presented the idea. ‘The paper provided empirical evidence…that unusually low interest rates set by the Fed in 2003-2005 compared with policy decisions in the prior two decades exacerbated the housing boom,’ he wrote in an email. Other economists have corroborated the findings, he added, and ‘the results are quite robust.'”

    Understandably, there’s not enough space in such an article to list the corroborations that I mentioned, so here is a summary:

    We agree with Prof. Taylor.

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  6. Dollar Drops to 8-Month Low as Risk Appetite Swells on Fed Bets – Bloomberg

    The dollar slid to the weakest since February as appetite for higher-yielding assets rose on bets the Federal Reserve will delay tapering stimulus after a last-minute deal pushed the political battle over U.S. spending into 2014.

    We’re surprised the article didn’t touch on inflation and US exports, both of which (all other things being equal) should increase.

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  7. The Top 10 Biggest U.S. Real Estate Deals EVER!* | News Alerts. Oct. 21, 2013. Evening Edition. #RealEstate

    See the asterisk? That means this is not a conclusive list, much less a permanent one. In fact, this ranking is largely drawn from a list that was put together in 2010—when, by and large, major real estate deals weren’t happening—so I’ve already had to make a couple updates to this list, which was published by With that said, feel free to add any corrections or nominations in the comments section, and remember that I included an asterisk in the title, so go easy on me if the list has any inadvertent omissions.

    …Oh yeah, and they’re all in New York City.

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  8. Phoenix Office Rents Rise, Market Shows Recovery – Daily News Article – News Alerts. Oct. 21, 2013. Evening Edition. #RealEstate

    PHOENIX-Phoenix’s Q3 2013 office market saw strong absorption rates, with 880,000 square feet in gains after a weak first half. Meanwhile, asking rents increased 1% year-over-year, according to a Colliers International report.

    Compared the first half of 2013, the number of $10 million-plus office deals in Phoenix during Q3 more than doubled. Fewer distressed properties on the market pushed median sales prices up by $40 per square foot, to $104.

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