Linking ≠ endorsement. Enjoy and share:
↑ Will loan amortization solve the underwater borrower problem? – OC Housing News
If they don’t kick the can on these loans, we will see many more foreclosures, which will certainly help with our depleted inventory problem.
“I think a lot of investors would be very unhappy with extending this program forever,” Piskorski said. “The whole point of HAMP was not just to help borrowers but to help investors preserve money. Investors might prefer foreclosure to getting very low payments for another 10 or 20 years.”
At the end, finally a grain of truth. Washington enables Wall Street to ransack Main Street, and these loan modifications are a clear example.
Loan modifications were intended to kick the can long enough for house prices to rise to the peak where lenders will rescinded the perceived entitlement. This has partially succeeded over the last two years, but house prices are running into resistance at the affordability ceiling, and since the mortgage regulations changed how real estate markets work, it’s not likely lenders will be able to fully reflate the bubble and resolve all their bad loans with equity sales.
↑ Settlement: Citizens will pay for professionally recommended rep – FOX 13 News
Florida’s state-run insurance company is settling more than 300 sinkhole-related lawsuits by providing “managed repairs.”
Citizens Property Insurance will pay for underground repairs recommended by a professional engineer and performed by a pre-approved list of contractors.
The insurance company will also pay for any additional above-ground damage caused by the sinkhole repair.
Managed repairs is a departure from the usual practice of writing a claims check.
In 2012, the Florida Legislature started requiring managed repairs for sinkhole claims. The lawsuits settled today pre-date that law.
↑ Newspaper being sued for rental ad | News | The Register-Guard | Eugene, Oregon
The state Bureau of Labor and Industries filed the suit on behalf of Melissa O’Brien and the Fair Housing Council of Oregon. O’Brien is the mother of two children who saw the ad when she was looking for a three-bedroom rental. She later filed a complaint with the state.
According to the lawsuit, the ad was published twice, once on Aug. 26, 2010, and again on Feb. 23, 2011. In between those two dates, the weekly newspaper and website were sold to a company owned by Rowland.
↑ Nine Chinese cities suffered more days of severe smog than Beijing | Environment | theguardian.com
Fang Lifeng, Greenpeace east Asia climate and energy campaigner, said: “China’s air pollution crisis usually makes the headlines when the smog cloud hits Beijing, but this research shows just how widespread this problem really is. There are now millions of Chinese people living in cities with air pollution above emergency levels for a third of the year, while other urban areas have gone a whole 12-month period with hardly any days of good-quality air.”
China is not the only country suffering air pollution problems, and far from the worst. Iran is home to four of the world’s most polluted cities, with Quetta and Peshawar in Pakistan also in the top 10 alongside Kanpur and Ludhiana in India, data from the World Health Organisation shows.
↑ PPI for final demand falls 0.1% in February; services decrease 0.3% and goods rise 0.4%
The Producer Price Index for final demand fell 0.1 percent in February. This decline followed advances of 0.2 percent in January and 0.1 percent in December. In February, the index for final demand services fell 0.3 percent and prices for final demand goods advanced 0.4 percent.
↑ Industries at a Glance: Rental and Leasing Services: NAICS 532
This section provides information relating to employment and unemployment in rental and leasing services. While most data are obtained from employer or establishment surveys, information on industry unemployment comes from a national survey of households. The following tables present an overview of the industry including the number of jobs, the unemployment rate of those previously employed in the industry, mass layoffs, data for occupations common to the industry, and projections of occupational employment change.
Employment, Unemployment, and Layoffs …
↑ Pension Tension: How States and Cities Are Coping | BlackRock Blog | Global Market Intelligence
Peter Hayes explains why pension reform in states and cities throughout the U.S. is becoming increasingly necessary, common and advantageous for muni markets.
Of course, the health of the city is to a large degree also the health of the investment properties within it.
↑ Keynes’ Liquidity Preference Trumps Debt Deflation in 1931 and 2008 | Fixing the Economists
I started this blog in 2010. At the time I was reading very little theoretical economics. I was really just picking through current events and economic commentary, trying to sort the wheat from the chaff. Since then I got interested in economic theory and undertook a Masters degree in the subject. In this time I gradually came to think that the only remotely reasonable approach to economics is what is generally known as the Post-Keynesian approach. Although this may make me sound ridiculously partisan, it seemed to me that every other school of thought — marginalist, New Classical, Neo-Keynesian, New Keynesian, Austrian and Marxian — were just crude, out-of-this-world metaphysical systems. Post-Keynesian economics was the only strain of thought that seemed to me remotely practical and applicable to real-world problems.
All the other systems of thought seem to be based on these Big Questions about things which really have no relevance for trying to figure out what is, for example, happening in the macroeconomy or in financial markets or what policies might make peoples’ lives better. But at the same time these doctrines spread a sort of poison in the minds of men. They encourage them think in weird ways and to make claims that would not be out of place in a cult. They give the adherents the characteristic of appearing to believe what “no man could believe who had not had his head fuddled with nonsense for years and years”, as John Maynard Keynes said in a similar context.
At the same time as coming to this realisation I also came to appreciate how important good economic theory is for organising our societies — not to even mention the fact that economic language is, in a very real sense, the language of power and governance today. This meant that not only were these crude metaphysical systems making poten tially thoughtful people say completely stupid things, but they were also acting as a significant blockage to human progress. Of course, this blog will not change the culture of metaphysics and garbage that passes for economic debate these days. But at the very least I hope to be able to chronicle the most patently silly absurdities — if for no other reason then at least for my own amusement.
I considered wiping out most of the old posts to ensure that the blog keep a consistent theme, given that these old posts are somewhat haphazard and misguided due to being, frankly, misinformed to a large degree (they were written when I had no real grasp of formal economic theory). However, I have decided to leave them in place perhaps reflecting a deeply held conviction that the essence of life is that things change and those who try to form a perfect, self-contained grasp of the world that can be applied in any situation regardless of context are completely misguided in their chasing of the ever elusive ghost of perfection and timelessness.
And that means fiscal spending while the private sector is too timid and is still liquidating.
↑ Fear of Wages – NYTimes.com
In the past, wage increases of around 4 percent a year — more than twice the current rate — have been consistent with low inflation. And there’s a very good case for raising the Fed’s inflation target, which would mean seeking faster wage growth, say 5 percent or 6 percent per year. Why? Because even the International Monetary Fund now warns against the dangers of “lowflation”: too low an inflation rate puts the economy at risk of Japanification, of getting caught in a trap of economic stagnation and intractable debt.
Over all, then, while it’s possible to argue that we’re running out of labor slack, it’s also possible to argue the opposite, and either way the prudent thing would surely be to wait: Wait until there’s solid evidence of rising wages, then wait some more until wage growth is at least back to precrisis levels and preferably higher.
… tightening the monetary screws anytime soon would be a very, very bad idea. We are slowly, painfully, emerging from the worst slump since the Great Depression. It wouldn’t take much to abort the recovery, and, if that were to happen, we would almost certainly be Japanified, stuck in a trap that might last decades.
↑ Offshore yuan centres not the biggest threat to Hong Kong’s financial sector | South China Morning Post
… it is not all negative news for Hong Kong because when the capital controls are lifted, it will be easier for mainlanders to trade in Hong Kong’s stocks and other investment products.
The key question is whether the local bourse and financial firms in the city are well enough prepared for that day.
If they aren’t, won’t real estate there tank?
↑ Climbing cost of homeownership – Bankrate, Inc.
Why they rent:
Blomquist says. “For example, in Los Angeles County, the minimum qualifying income needed to purchase a median-priced home is at more than $95,000, up from about $68,000 just a year ago.”
Even with the increase in the cost of buying a home with a mortgage, it’s still cheaper to own in 91 percent of the counties analyzed than it is to rent a three-bedroom home. However, 20 percent of the population resides in the 29 counties where it is more expensive to own than it is to rent. They include counties in Southern California, the San Francisco area and the regions around Chicago and New York City.
↑ 4 reasons Americans are losing interest in owning a home – Yahoo Finance
More of why they rent: Rick Newman:
… fewer Americans are interested in owning a home, even if they could muster the down payment and get approved for a mortgage. “We’re just losing our general sense of optimism about housing,” real-estate expert Robert Shiller, a professor at Yale University, said in a recent conference call. “It’s not fun anymore.”
Americans now view a home as a poor investment. …
More young people may prefer renting. …
Institutional buyers may be largely responsible for the housing rebound. …
Americans are spooked about the entire economic outlook. …
↑ Schwarzman of Blackstone Made $375 Million in 2013 – NYTimes.com
Mr. Schwarzman, the co-founder and chief executive of Blackstone, personally made a total of $374.5 million in 2013, according to a regulatory filing on Friday [February 28, 2014?]. Most of that haul came from cash dividends he received on his partnership units, reflecting the profitability of the alternative investment firm.
The eye-popping compensation underscored yet again how lucrative the private equity business model was last year, as firms were able to reap big gains from selling their holdings into a soaring stock market. Blackstone, which made money selling shares in companies like Hilton Worldwide Holdings and Merlin Entertainments, also benefited from its growing real estate business.
↑ Abenomics struggles to deliver Japan public works boom | Reuters
Japan’s current Abenomics woes: Not enough skilled labor, too costly materials, and a general private-sector fear of fiscal inconsistencies.
When Tokyo asked for bidders to build what is expected to be the world’s largest fish market on the city’s vacant eastern edge there were no takers.
In a graphic illustration of how the hopes for “Abenomics” are falling short, the city was forced to raise by two-thirds its budget for the project to more than $1 billion before some of Japan’s top construction companies stepped forward.
↑ Blackstone real estate head: no US bubble, EM “very attractive”
Private equity firm Blackstone Group, which has made big bets on hotels, rental homes and other real estate in recent years, continues to be bullish on the sector.
“The U.S. is continuing with steady improvement. It’s not a rocket-ship, but we’re seeing good signs,” said Jonathan Gray, who manages about $80 billion of equity assets as Blackstone’s global head of real estate.
Gray said housing, hotels, warehouses and shopping centers were showing signs of a continued economic recovery in the U.S. He said the office space market was slower to improve, but was still gaining.
While Gray said the market wasn’t overheated, he noted there are few bargains left.
The slowdown is upon us. What will the Fed do? What will Congress do? We’ve seen lately that the White House may finally be getting it. We hope so anyway.
↑ The Mismeasure of Finance | Nick Dunbar
… studies have shown that adjusting for risk-taking would reduce financial sector contributions to GDP by 25-40%. If the financial sector contribution to GDP is largely a statistical mirage, then why isn’t the methodology changed?
↑ [Recommended] Coppola Comment: Deflation and the ECB
In an economy where the money supply depends principally upon bank lending, a credit crunch will become deflation unless the money supply is expanded by other means. For the last year, the ECB has allowed monetary conditions to tighten as banks repaid LTROs. It has justified its inaction on the grounds that the credit crunch (and associated deflation risk) only applies in periphery countries, and is a recognition by banks of higher sovereign risk in those countries. Structural reforms, therefore, should over time reduce the sovereign risk, allowing real interest rates to fall and enabling banks to lend. But these charts show that lending is stagnant in Germany and France as well as the troubled Spain and Italy. Evidently, the credit crunch does not apply only in periphery countries.
↑ Why The Worst Is Still Ahead For Turkey’s Bubble Economy – Forbes
Turkey’s economic bubble is likely to pop as a result of rising short and long-term interest rates, and may coincide with the popping of the overall emerging markets bubble. As the U.S. Federal Reserve follows through with its QE taper — which is expected to be completed this year — the flow of “hot money” to emerging markets will reverse, which will cause those countries’ currencies to decline and bond yields to climb. Turkey’s $129.1 billion short-term external debt that will come due over the next year is an additional related catalyst that will likely contribute to the popping of the country’s bubble.
Here is what to expect when Turkey’s economic bubble truly pops:
- The country’s runaway credit boom will turn into a bust
- Countless construction and property development projects will turn sour
- Many banks and property developers will go under
- Many corporations that have large foreign currency debts will default
- Over-leveraged consumers will default on their debts
- Economic growth will go into reverse
- Unemployment will surge
- Government and corporate debt downgrades by rating agencies
- Property, the lira currency, stock, and bond prices will fall significantly, leading to higher interest rates
- Political backlash against the current leaders and more public protests
↑ Default Signals Growing Maturity of China’s Corporate Bond Market – NYTimes.com
A small producer of solar panels on Friday [March 7, 2014] became the first company in recent history to default in China’s domestic bond market. The development was welcomed by analysts as a sign that the nation’s huge but protected corporate debt market may be growing up.
The Shanghai Chaori Solar Energy Science and Technology Company, which makes solar cells and panels, failed to meet a Friday deadline to make an annual interest payment on a bond of 1 billion renminbi, or $163 million, that it sold to domestic investors in 2012, a company official said on Friday.
↑ Is a nationwide property tax essential for China?
Michael Klibaner, Regional Director, Head of Research, Greater China at Jones Lang LaSalle, says the property tax will be an important part of municipal finance reform.
↑ Real Estate Supply Problem `Everywhere’: Elliott: Video – Bloomberg
Alistair Elliott, group chairman at Knight Frank LLP, talks about the outlook for Asia property markets and his investment strategy. He speaks with John Dawson on Bloomberg Television’s “On the Move.”
Mr. Elliott seems more optimistic than most.
We didn’t here the word “taper.”
↑ [Recommended] RealtyTrac outing location of sex offenders, drug labs and toxic dumps on listing detail pages | Inman News
This is a great development in our view. Teke Wiggin:
In a bid to bring transparency in online real estate search to new heights, RealtyTrac has baked a batch of data on unpalatable neighborhood characteristics into its listing detail pages.
Distributed among 108 million addresses, the information — which could be construed as a massive collection of red flags — includes the location and details of environmental hazards such as underground spills, polluters and hazardous waste sites, as well as former drug labs, sex offenders and building permit activity.
The new data complements a host of other supplemental information that’s appeared on the site for some time, including school ratings, crime rates, comparable sales, occupancy rates, unemployment rates, and risk for natural hazards such as earthquakes, tornadoes and floods.
The latest data rollout won’t be RealtyTrac’s last. The firm is considering migrating more information from Homefacts.com to property pages, including census data like renter-to-homeowner ratios, the percentage of households with families, and racial composition.
↑ Economy Watch: 4Q GDP Growth Revised Downward; Fewer Homeowners Under Water; Pending Home Sales Down | Multi-Housing News Online
… the Bureau of Economic Analysis released its revised, or second, estimate for real U.S. gross domestic product in the fourth quarter of 2013, reporting that real GDP increased at an annualized rate of 2.4 percent for the quarter. The previous advance estimate was 3.2 percent. During 3Q13, real GDP increased at an annualized 4.1 percent.
The second 4Q GDP estimate is based on more complete source data than the advance estimate, which was issued in late January. …
Despite not growing as much as previously thought, according to the BEA real GDP did grow during the quarter, with positive contributions from PCE, exports, nonresidential fixed investment — including CRE — and private inventory investment, or businesses spending their money. Other contributions to GDP shrank, including federal government spending, residential fixed investment (housing) and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.
↑ Investors Rush To Auctions Before Foreclosures Dry Up – Investors.com
Even though overall foreclosure numbers continue to decrease across the U.S. year over year, auctions have picked up in many states recently as investors grab remaining bargains.
The increases come amid questions about the path ahead. Some industry watchers see foreclosures and auctions winding down early next year. Others note many markets are already at pre-bust levels or expect foreclosures will still be getting mopped up in certain markets well into 2015 and beyond.
What’s driving foreclosures and auctions? Price increases.
“When prices are falling, banks are much more willing to entertain short sales . . . as a way to cut losses,” says Daren Blomquist, vice president of RealtyTrac.
But with home prices now rising in many areas, he said, even if it takes six months to foreclose on a home “it’s going to be worth more (later) than it is today.”
↑ Britain: Filling a Hole With Real Estate – MoneyBeat – WSJ
It sounds like a bubble to us. Alen Mattich and Art Patnaude:
… those property flows are so big, a lot is riding on hope they’ll continue. If, instead, investors lose their appetite for British houses and office buildings, the British pound could slump—a similar process to that which played out in emerging markets like Turkey in recent months.
… the U.K. has historically had a large current-account deficit, and there are signs it could start to shrink, according to David Hutchings, European head of research at Cushman & Wakefield. And if the taps are turned off from current big sources of investment—such as China—other parts of the globe are likely to pick up the slack.
“In the U.K., history shows you one source of capital has tended to follow another,” Mr. Hutchings said. He says flows from Japan, Taiwan, Australia, Korea, Malaysia and Singapore are expected to increase over the coming years.
↑ Are you ready for deflation? – Brett Arends’s ROI – MarketWatch
Anyone who remembers the crazy 1970s, when prices rose by double-digits each year in most developed countries, flinches at the memory.
But today we may face the opposite threat: Deflation, or a general fall in prices.
Today money managers continue to tell the Bank of America Merrill Lynch monthly survey that they think bonds are overvalued. They continue to bet that inflation will pick up, and bonds will fall.
Perhaps they’re right. But at least for the past few months, as the Federal Reserve has started “tapering” its bond purchases, bonds have done pretty much the opposite of what was expected. Treasury bonds have gone up, and yields have come down.
That’s what we said would happen, and it’s not over yet.
How many cycles will Janet Yellen have to see before she believes? That’s the question we posed after the last Fed announcement that they were staying the course.
↑ Spain to the Fore as Property Investors Move Up the Risk Curve – CBRE
There are significant shifts in geographical preferences, with a strong rise in the proportion (19%) of investors seeing Spain as most attractive for purchases in 2014 — up from 6% from 2013. Madrid is now in second place to London as the most attractive city for investment, a dramatic change from last year, with Barcelona also in this year’s top ten choices. Investor appetite for opportunities in ‘recovery markets’ is further evidenced by the inclusion of Amsterdam and Dublin among the top ten.
↑ Steps to sell a home with tenants
This was actually a better article than we were expecting, not because of the site or author but because of the subject. Larque Goodson:
Selling an occupied rental can be a positive experience for everyone if you are upfront with your tenants and sympathetic to the inconveniences for them.
Larque provides some pretty good ideas.
↑ [Recommended] Whistleblower: Wells Fargo Fabricated and Altered Mortgage Documents on a Mass Basis | naked capitalism
A scathing report on Wells Fargo: Yves Smith:
… we have a problem of legitimate authority. If the note has not been conveyed to the trust properly, altering original mortgage documents arguably does not fall in the scope of servicing and administering the mortgages. Indeed, if the notes were not conveyed to the trust by the cutoff date, they are not the property of the trust and trustee lacks authority to take action. This is precisely the scenario that no one in the mortgage industry wanted examined closely, and why they’ve gone to such lengths to pretty up document trials to indicate otherwise.
It’s a fairly long read but worth it.
↑ Lessons Learned: Unpredictable Windstorms Force Insurers and Property Owners to Prepare
When it comes to windstorms on a global scale, it’s been a mean and unpredictable season. If an insurer is focused on the quiet 2013 Hurricane season in the Atlantic and quietly celebrating the low claim volume, the carrier is missing the larger picture. With hundreds of billions of dollars …
We are limited by claimsjournal.com to supplying only the first 50 words of the article.
↑ Denver’s Mariposa District: Supporting Healthy, Mixed-Income Living | HUD USER
Does this compete with private investors or serve a market that investors usually won’t touch?
The redevelopment of a distressed public housing development is now providing Denver residents with affordable and market-rate living options that offer easy access to the nearby 10th and Osage light rail station. Redevelopment of South Lincoln Park Homes, now known as the Mariposa District, follows the guidelines established by several local plans, including a citywide strategic plan to promote transit-oriented development (TOD) along Denver’s six light rail lines, a subsequent station area plan for the 10th and Osage station, and the Denver Housing Authority’s (DHA) master plan to replace obsolete public housing and add new units and commercial uses. Together, these efforts are expected to engender a healthy mixed-income community centered on access to light rail transportation. The redevelopment is a large effort, comprising nine phases to be constructed over seven years and resulting in more than 500 additional residences. With the first two phases completed as of October 2013, the Mariposa District, which won the U.S. Environmental Protection Agency’s 2012 National Award for Smart Growth Achievement in the Equitable Development category, moved closer to being fully realized.
↑ Real estate agent sentenced for scamming South Bay landlords for rent-free housing – San Jose Mercury News
A 52-year-old real estate agent was sentenced to jail for running a confidence scam in which she bilked landlords for rent-free three-month stints at pricey properties throughout the South Bay, prosecutors said.
Rebecca Violette would present herself to landlords as a well-dressed, affluent real estate agent in immediate need of a place to live, said Deputy District Attorney Katharina Wells of the Santa Clara County District Attorney’s Office. She would lie about her income and past evictions and convince them to lease her a home on the spot, without doing a background check. Then she would pay for first and last month’s rent with a bad check, Wells said.
“Before the unsuspecting landlord deposited the check, Violette moved into the property,” Wells said in a news release. “At that point, the only recourse for the landlord was an ‘unlawful detainer’ action that typically takes 90 days from filing to eviction.”
↑ Guest Column: Truck traffic from proposed sand mine will affect real estate market | MLive.com
… the real estate values in town will drop ….
What do you think?
↑ Treasuries Post Largest Weekly Gain in 2 Months on Crimea Unrest – Bloomberg
This will reduce interest rates on mortgages.
Treasuries posted the biggest weekly gain in two months as unrest in the Ukraine drove investors to the safety of U.S. government debt.
↑ In lawsuit, FDIC accuses 16 big banks of fraud, conspiracy – The Washington Post
The Federal Deposit Insurance Corp. has sued 16 big banks that set a key global interest rate, accusing them of fraud and conspiring to keep the rate low to enrich themselves.
The banks include Bank of America, Citigroup and JPMorgan Chase in the United States.
The banks rigged the London interbank offered rate, or Libor, from August 2007 to at least mid-2011, the FDIC alleged.
↑ Fallout From Refinancing – NYTimes.com
Homeowners who refinanced when fixed mortgage rates dropped below 4 percent will be less inclined to put their homes on the market as interest rates climb. And as a result, the limited property supply already impeding sales in many markets may not ease anytime soon.
↑ GeekWire Radio: Home prices, real estate and big data with Zillow’s Stan Humphries – GeekWire
This week on the GeekWire radio show, we’re diving into one of our favorite topics — real estate, home prices and the intersection of big data and technology. Our guest in the studio is Stan Humphries, the chief economist at online real estate company Zillow and the original creator of the Zestimate, the company’s algorithm for estimating home prices around the nation.
↑ Growing Your REO Business | Realtor Magazine
Bank-owned inventory is slowing nationwide, but markets with higher levels still exist and are in need of REO agents and brokers to service them.
According to Clear Capital’s Home Data Index, over the last 3 months (December 2013—February 2014) 14.3 percent of all sales were REO. While this percentage has improved, it’s still higher than precrisis levels, which hovered around 3 percent. At the metro market level, many still see elevated REO saturation rates.
Dayton, Ohio: 24.2%
Keep your eye on interest rates and rising property values. If they both stay lower or fall, more banks will want to move their REO.
↑ Airbnb is Raising the Ire of WeHo Apartment Managers and Tenants | WEHOville
Airbnb was launched in 2007 by Brian Chesky and Joe Gebbia, who were offering air mattresses and breakfast for up to three guests a night to help them cover the cost of their San Francisco apartment. Today Airbnb has gone global, with 500,000 listings in 33,000 cities and 192 countries. It is the exemplar of the so-called “peer to peer” marketplace in which individuals offer one another products and services without having to go through retailers or business owners.
In West Hollywood, as elsewhere in the country, Airbnb is raising the hackles of some apartment building owners and tenants and raising questions with the city’s code enforcement staff about violations of WeHo’s zoning laws.
There’re insurance liability issues involved too.
↑ Blackstone’s Home Buying Binge Ends as Prices Surge: Mortgages – Bloomberg
Blackstone Group LP (BX) is slowing its purchases of houses to rent amid soaring prices after a buying binge made it the biggest U.S. single-family home landlord.
Blackstone’s acquisition pace has declined 70 percent from its peak last year, when the private equity firm was spending more than $100 million a week on properties, said Jonathan Gray, global head of real estate for the New York-based firm. After investing $8 billion since April 2012 to buy 43,000 homes in 14 cities, the company has narrowed most of its purchasing to Seattle, Atlanta, Miami, Orlando and Tampa.
“The institutional wave has passed,” Gray, who oversees almost $80 billion in property investments, said in a telephone interview. “It’s at a much lower level than it was 12 or 24 months ago.”
↑ In the Balance : Housing Crash Continues to Overshadow Young Families’ Balance Sheets
Young Families Lead a Retreat from Homeownership
After peaking in 2004 at 69.0 percent, the national homeownership rate has fallen nine consecutive years, reaching 65.1 percent in 2013.5 Figure 4 shows that the homeownership rate first surpassed this level in 1979, some 34 years ago. The homeownership rate is not declining because the number of owner-occupiers is falling; in fact, their number has increased by about 0.4 million since 2004. But this represents a tiny fraction—about 5.6 percent—of the net new households that have formed since 2004 (numbering about 7.1 million); the rest have become renters.
Below the surface appearance of a roughly constant number of homeowners since 2004 lie complex movements of families choosing between renting and homeownership. Recent Census data show that young and, to a lesser extent, middle-aged families are leading a retreat from homeownership. Only the very oldest families, headed by someone aged 75 or older, are more likely to be homeowners now than before the recession.
↑ Study suggests MLS played little or no role in nearly half of 2013 home sales | Inman News
Andrea V. Brambila:
What’s the fate of multiple listing services, if nearly half of all homes sold last year were never listed in an MLS or were listed only after a buyer had already been lined up?
That’s the question facing MLS executives, following the presentation at an industry conference of a study by Jonathan Green of real estate information and technology provider CoreLogic.
↑ California home sales continue to drop | HousingWire
San Diego-based real estate analytics firm DataQuick is reporting the collapse in the short sale market in California is impacting overall home sales.
In March, 25,680 new and resold homes were taken off the market by buyers, compared to 28,719 in February.
Last month’s sales were 18.9% below the average of 31,660 sales for all the months of February since 1988, when DataQuick statistics begin.
↑ 2 Things Your Real Estate Agent Won’t Tell You
“I don’t mind leaving thousands of dollars on the table.”
Your real estate agent won’t ever utter the words above — at least not around you — but they’re true. A real estate agent doesn’t always have your best interests in heart.
The book Freakonomics uncovered agent-listed homes typically sell faster than homes listed for sale by owner, but they sell at lower prices. The reason, the book suggests, is selling a home cheap has little impact on the brokers.
What’s your take on this?
↑ The Welsh dairy farmers who bought 320 buy-to-let properties in Sweden – Telegraph
Their search for a better alternative to a traditional pension took three south Wales farmers to Lithuania, and from there to Sweden.
… the surge in property values, and the craze for buy-to-let, which has created an army of 1.4?million private landlords, has led to a number of residential property funds being launched in recent years.
↑ A riveting look at the blood sport of Manhattan real estate
In New York, where real estate is a blood sport, one building stands out: 15 Central Park West, the high-powered, two-tower luxury limestone property built in 2005 by third-generation developers and brothers Arthur and Bill Zeckendorf.
“… blood sport …”?
↑ Growth In Asia-Pacific Real Estate Investment Is Poised To Slow This Year – Forbes
Torrid growth in real-estate investment in the Asia-Pacific is poised to slow this year, and the region will underperform an expected double-digit increase in real estate investment globally, according to a report this week by Cushman & Wakefield, the global real estate consultancy.
↑ China plans investment and reform to ease urbanization drive | Reuters
Every city with more than 200,000 residents will be covered by standard railways by 2020, the plan said, with high-speed services connecting cities with more than 500,000 residents. The civil aviation network, meanwhile, will cover about 90 percent of the population.
Authorities are also targeting environmentally friendly growth, a serious issue for a nation that has been bogged down in pollution issues including toxic levels of smog, polluted waterways and so-called “cancer villages”.
These villages, hit by high levels of water, air and soil pollution, are a symptom of China’s many years of rampant economic growth, when environmental issues took a back seat to financial rewards.
↑ Inflation signs lurk in broader labor data Yellen seeks at Fed – Business – The Boston Globe
Janet Yellen says Federal Reserve policy makers need to look at a broader range of data to get a good handle on the job market. She hasn’t highlighted one labor indicator that economists say is sounding inflation alarms: short-term unemployment. With total joblessness at 6.7 percent in February, still higher than the Fed wants, the rate for those who’ve been out of work less than 27 weeks was just 4.2 percent. That’s near the lowest since April 2008 and 0.6 percentage point below the average since 1948, Labor Department data show. The depressed level suggests the labor market is tightening, raising the odds that a pick-up in wages will eventually lead to faster inflation, according to economists including Michelle Girard of RBS Securities. That’s important because Fed policymakers have cited a slack job market and subdued inflation as reasons for keeping short-term interest rates near zero even as the economy picks up.
We disagree. It seemingly tighter because employers have been refusing to hire the long-term unemployed and also because there is a lagged between when “help wanted” picks up at all and awareness by those who’ve been marginalized, as if having left the job market, as in not wanting a job (the low-participation-rate issue). Our point is that once word gets out and people get revved up again for job searching, the downward pressure on wages is back on and inflation fears are then premature.
↑ China may make the weather despite Fed and Ukraine | Reuters
World markets were upended last week by the first Chinese default on a domestic bond and the prospect of more to come at the same time as evidence mounted that growth in the world’s second-largest economy is slowing.
The upcoming Chinese data calendar is light but the picture seems clear – growth in investment, retail sales and factory output have all slumped to multi-year lows, suggesting a marked slowdown in the first two months of the year.
Chinese premier Li Keqiang said the economy faced “severe challenges” in 2014 and hinted Beijing would tolerate a slower expansion while it pushes through reforms aimed at providing more sustainable growth in future.
↑ Crash, bang, boom: Down go all the major browsers at Pwn2Own | ZDNet
If there was ever any doubt that security is a process and not a product, the results of HP Zero Day Initiative’s (ZDI) annual Pwn2Own hacking contest will lay those doubts to rest. All the major Web browsers—Chrome, Firefox, Internet Explorer (IE), and Safari—were cracked by the end of the two day competition.
That appears to be minus any firewall or antivirus programs, etc. Correct?
↑ Paris restricts car use after pollution hits dangerous levels | euronews, world news
In Paris, pollution has reached such hazardous levels the French government has restricted car use.
From Monday, only vehicles with specific number plates will be able to enter the capital. It is only the second time since 1997 such curbs has been introduced, caused in large part by a week of unseasonably warm weather in France.
↑ New Greenland Ice Melt Fuels Sea Level Rise Concerns | Climate Central
The stability of the region is particularly important because it has much deeper ties to the interior ice sheet than other glaciers on the island. If the entire ice sheet were to melt — which would take thousands of years in most climate change scenarios — sea levels would rise up to 23 feet, catastrophically altering coastlines around the world.
Some models don’t call for it to take thousands of years. Nevertheless, half melting would be an 11.5 foot rise. That would still be dramatic. Even a quarter melt (5.75 feet) would radically alter coastal development (real estate …). How long will it take to get there if we don’t reduce CO2 emissions globally?
↑ What Can Take the Place of Fannie and Freddie? – Real Time Economics – WSJ
Make the “implied” guarantee explicit and require any successors to Fannie and Freddie to pay a fee for that guarantee, as the chart up top illustrates. Successors would compete for business, selling securities and taking initial losses before any guarantee would be triggered.
Get rid of those investment portfolios, or shrink them to the point where they don’t create systemic risks. This way, the firms wouldn’t be guaranteed by the government—only their securities.
Require more capital and tighter regulation, since too little of both is what got Fannie and Freddie into trouble. Just how much capital will be required will be a major point of contention, because having more will protect taxpayers but would also raise borrowing costs.
First, big banks and insurance companies could step into this role. That idea terrifies smaller lenders, of course, who are already afraid about big bank concentration. And it would exacerbate concerns about “too-big-to-fail,” as large banks would have far more control over the end-to-end loan production process than Fannie or Freddie ever did.
Second, some lawmakers have said new guarantors or private insurance companies could be created from scratch, and banks or insurance companies could be limited from becoming majority owners to limit the too-big-to-fail threat. Alternately, a government-run utility could do the job. One problem: it isn’t clear where the capital for these startups would come from.
Third, others say it would be easier to simply let Fannie and Freddie perform these functions in the new, reformed system. Of course, that doesn’t solve the too-big-to-fail problem either, as it recreates the old duopoly. Some have suggested placing limits on the firms’ size or requiring them to license their platforms to potential competitors as a partial so lution.
↑ Osborne Told to Curb U.K. Housing Aid to Prevent Bubble – Bloomberg
U.K. Chancellor of the Exchequer George Osborne should scale back his housing-market stimulus next week to prevent prices spiraling, according to a survey of economists.
Almost three-quarters of 33 analysts in a monthly survey by Bloomberg said property in the U.K. is at risk of overheating. The poll, published today, also showed that more than 80 percent said Osborne should use his March 19 budget to curtail the Help-to-Buy program, which allows people to buy a home with a down payment of as little as 5 percent.
↑ Zillow’s new housing confidence index shows consumers bullish on real estate | Inman News
Nationwide, renters had an aspiration index of 59.3, indicating that more renters than not aspire to be homeowners.
In addition, 10 percent of current renters nationwide said they plan to purchase a home within the next 12 months.
We don’t know all the “ifs” going through people’s minds when they are asked whether they’d like to own a home.
↑ What You Need To Know About Becoming a Landlord – Redfin Real Estate Blog
… becoming a landlord is like starting a small business. You should set goals and realize that you are taking on financial and legal responsibility. You also need to spend time thinking about the relationship that you want to have with your customer (your tenant). To help you think through everything, here are the five components of a typical rental process:
Finding Tenants: …
Screening Tenants: …
Preparing and Signing the Lease: …
Collecting Rent: …
Handling Maintenance Requests: …
Read the article for more details.