February 27th, 2009
You'd think that a home buyer who put down a deposit of $1 million would be pretty much locked into a purchase, even in the toughest circumstances. But, as The New York Times reports today, buyers in Manhattan's expensive condo market are having second thoughts about properties they agreed to buy before the financial crisis. Buyers are leaving deposits of hundreds of thousands of dollars to more than $1 million on the table, the article says.
Even more surprising, some of the buyers who abandoned their massive deposits are back in the market, looking for better deals elsewhere.
February 26th, 2009
Existing, single-family home sales increased 100.8 percent in January to a seasonally adjusted rate of 624,940, according to the California Association of Realtors. The statewide median price of an existing single-family home decreased 40.5 percent in January to $254,350
C.A.R.’s Unsold Inventory Index was 6.7 months in January, compared with 16.6 months in January 2008
· The median number of days it took to sell a single-family home was 49.9 days in January 2009, compared with 70.8 days in January 2008
February 26th, 2009
BusinessWeek's Mara Der Hovanesian reports today on what passes for good news in the housing market. She's attending JPMorgan Chase's annual investor conference in New York.
Charlie Scharf, head of retail financial services at JPM, said today that the discounts for their real-estate-owned sales in California fell in 2008. That means the percentage they have to mark down a foreclosed house to sell got smaller. The number of days that foreclosed houses stay on the market before being sold shrank as well, Scharf says. Loss-severity numbers rose but appeared to stabilize in the second half. January 2009 was worse than December 2008, but not by a lot.
Scharf's hopeful bottom line: "There seems to be some bottoming in California. It's one place where we see a meaningful [stabilization of] ... house price deterioration."
Discounts for JPM Chase's owned or confiscated homes in California fell from 17.7% in January 2008 to 3.8% in December 2008, before ticking up to 5.6% in January 2009. Average days on market fell from 153 to 104 in December 2008, then crept back to 120 in January 2009. The percent of loss severity rose from 16.5% to 42.%, but that number has hovered from 36% in August to 41.6% in January 2009.
It's way too soon to call a bottom in the housing market in California, much less the nation as a whole. Not with the Commerce Dept. reporting today that sales of new homes nationwide dropped 10% in January to an annual pace of 309,000, the lowest level since data began in 1963. On the other hand, as Hot Property blogger Prashant Gopal observed recently, housing starts are extremely depressed. Whenever housing turns around, you can expect a "massive" jump in starts.
February 25th, 2009
Sales of existing homes fell in January to their lowest levels in nearly 12 years, with a real estate group saying buyers delayed purchases in anticipation of government programs to boost the housing market.
February 25th, 2009
Web tracking firm comScore, Inc. released an analysis of changes in Americans’ searching behavior resulting from the economic downturn, based on December 2008 data.
Searches for several terms related to the economic downturn showed dramatic gains during the past year. Among the most notable increases were searches relating to the deteriorating job market, including searches using the term “unemployment” (8.2 million searches) and “unemployment benefits” (748,000 searches).
Meanwhile, terms relating to housing, including “mortgage” (up 72 percent to 7.8 million searches), “bankruptcy” (up 156 percent to 2.6 million searches), and “foreclosure” (up 67 percent to 1.4 million searches) also grew strongly. And Americans, resilient as they are, are seeking ways to save money, as evidenced by the increase in the number of searches for “coupons” (up 161 percent to 19.9 million) and “discount” (up 26 percent to 7.9 million).
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Search Term Total Searches (000)
Dec-2007 Dec-2008 % Change
“Coupons” 7,637 19,921 161%
“Unemployment” 2,688 8,214 206%
“Discount” 6,271 7,928 26%
“Mortgage” 4,518 7,756 72%
“Bankruptcy” 1,012 2,589 156%
“Foreclosure” 824 1,373 67%
“Unemployment Benefits” 215 748 247%
Source: comScore Marketer
February 25th, 2009
Burnham USA Equities Inc. and affiliate Burnham-Ward Properties have purchased out of receivership South Coast Home Furnishings Centre in Costa Mesa, Calif., for approximately $35 million.
February 25th, 2009
Kenco Logistic Services, a Tennessee-based, privately held third party logistics provider, signed a five-year 517,000-square-foot industrial lease in Redlands, Calif.
February 24th, 2009
You know the economy is front and center in the national psyche when TMZ.com, the celebrity gossip site best known for breaking the news of Mel Gibson's drunk driving arrest is now writing about the bank bailout.
In this latest expose, big bank Northern Trust, a recipient of federal bailout funds is shown parting it up in Los Angeles, with not just a golf open but private parties at a Sunset Strip night club, Tiffany gift bags, petite Angus filets and concerts by Sheryl Crow and Chicago.
February 24th, 2009
The latest S&P/Case-Shiller home price index data came out today and the numbers are grim. Data through December 2008 show that prices of existing single family homes across the United States continue to set record declines. The national index recorded an 18.2% decline in the 4th quarter of 2008 versus the 4th quarter of 2007, the largest in the series' 21-year history. The 10-City and 20-City Composites also set new records, with annual declines of 19.2% and 18.5%, respectively. From the peak in the second quarter of 2006, average home prices are down 26.7% in the United States.
Four markets saw peak declines of greater than 40%. They were Miami, Phoenix, Las Vegas and surprise here, San Francisco, which prior to this seemed to be holding up better than other markets even in hard-hit California. “There are very few, if any, pockets of turnaround that one can see in the data,” says David M. Blitzer, Chairman of the Index committee at Standard & Poor’s. “Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and eight now with negative rates exceeding 20%.”
Separately, the California Building Industry Association announced today, that housing construction in January posted the lowest annual rate on record. According to statistics compiled by the Construction Industry Research Board, just 2,007 permits were pulled throughout California during the month of January, down 57 percent when compared to the same month a year ago and also down 57 percent from December. On a seasonally adjusted basis, the annual rate of production for total new units during the month was just 27,800, the lowest on record.
February 23rd, 2009
Wow. You think your personal portfolio has taken a hit, check out how much the government has lost so far on the Troubled Asset Recovery Program (TARP). According to an index put together by a corporate ethics advocacy group called Ethisphere, we’ve lost $107.7 billion or 55% of our money so far. This amounts to a loss of $768 for each taxpaying household.
Here are the results through February 20, 2009
Biggest losers
1. Citigroup (C) – loss of $21.8 billion or 87.2 percent
2. Bank of America (BAC) – loss of $20.0 billion or 79.9 percent
3. Wells Fargo (WFC) – $16.3 billion or 65.2 percent
4. JP Morgan (JPM) – loss of $12.5 billion or 50.0 percent
Biggest gainers
1. Morgan Stanley (MS) – gain of $699.4 million or 7.0 percent
2. BB&T Corporation (MSDXP) – gain of $63.9 million or 2.0 percent
3. 1st Source Corporation (SRCE) – gain of $17.5 million or 15.7 percent
Top performers on a relative basis include:
1. Great Southern Bancorp (GSBC) – gain of 27.1 percent or $15.7 million
2. Monarch Community Bancorp (MCBF) – gain of 17.7 percent or $1.2 million
3. 1st Source Corporation (SRCE) – gain of 15.7 percent or $17.5 million
Worst performers on an absolute basis include:
1. US Bancorp (USB) – loss of $4.1 billion or 62.6 percent
2. SunTrust Banks (STI) – loss of $3.8 billion or 78.8 percent
3. PNC Financial Services (PNC) – loss of $3.8 billion or 50.2 percent
Worst performers on a relative basis include:
1. Huntington Bancshares (HBAN) – loss of 85.1 percent or $1.2 billion
2. Webster Financial Corp (WBS) – loss of 80.5 percent or $321.9 million
3. Marshall & Ilsley Corporation (MI) – loss of 79.4 percent or $1.4 billion
