Commercial real estate showing signs of recovery

Following sharp declines and painful deleveraging in the wake of financial and economic turmoil, commercial real estate (CRE) is showing signs that the deterioration of industry transactions and fundamentals has started to plateau, and early stages of recovery may be imminent, according to Deloitte's "Commercial Real Estate Outlook: Top 10 Issues in 2011 - Generating Momentum for Recovery ."

"Uncertainty is the most significant issue for commercial real estate in the post-recession environment, as market participants — owners and operators, lenders, investors, developers, and tenants — look for a signal that economic and industry fundamentals have hit bottom and started a sustainable recovery," said Bob O'Brien, vice chairman and real estate sector leader, Deloitte LLP. "While this signal remains elusive, positive developments like increased deal flow, improved real estate capital markets, stabilizing office, apartment, industrial and hotel fundamentals, and the REIT rebound offer hopeful signs of recovery."

Finding apartments online

It's never been easier to find an apartment and it's possible to do so these days from a different city or state. While you need to take some additional steps to make sure you can really believe what you see, finding just the right apartment before you move to another location is fairly simple with today's technology. Let's say you want to find an Apartment in Durham, NC, using websites like nc-apartments.com you can view the apartments that are available.

You can look at floorplans, videos, pictures and get details as to what each apartment community offers. When you think you've found the apartment of your dreams you can be pre-approved on line. Some apartment communities even offer the ability to pay for your rent, get utilities and help with moving companies all right from your home computer. This means whether you are looking for apartments in North Carolina or apartments in California, your first place to start, should be the internet.

U.S. Home Sales at Lowest Level in More Than a Decade

From today's New York Times, the news isn't that good -- when it comes to home sale numbers.

Housing sales in July plunged to their lowest level in more than a decade, exceeding even the grimmest forecasts.

The National Association of Realtors said Tuesday that the seasonally adjusted annual sales rate of 3.83 million was 25.5 percent below the level of July a year ago.

The financial markets took the news badly, with the Dow Jones Industrials down about 100 points in early afternoon trading.

July was the first month that buyers could not qualify for a tax credit of up to $8,000, so analysts were expecting weak results. But their consensus called for a decline of about 13 percent.

Jennifer H. Lee, senior economist for BMO Capital Markets, called the numbers “truly gut-wrenching.”

The Myth of the American Dream

There's no written link to this story on NPR, Home Ownership: The Myth Of The American Dream it is only an audio link, but it's one I recommend taking a few moments to listen to.

Wind farms don't impact property prices

Recommended article from New Scientist, Wind farms don't affect property prices. This is especially important with the increased focus on alternative energy sources. Part of the article:

As part of a US government-funded study, Hoen's team recorded the sale price of around 7500 homes in nine states and then devised mathematical models to reveal how, all other things being equal, proximity to a wind farm affected their value.

Not much, it turns out. Homes less than 1.5 kilometres from a wind farm sold for no less, on average, than homes 8 kilometres away. Similarly, home values tended to remain stable long after wind farms sprung up.

Nearly one-third of those who obtained home loans during the boom years of 2005 and 2006 couldn't get one today

That to me is troubling, because of the degree of governmental control over the mortgage industry and it conflicts with the message that the government actually wants people to have that American dream...recommended Washington Post piece, part of which:

Now the pendulum has swung to the other extreme. Only one lender of consequence remains: the federal government, which undertook one of its earliest and most dramatic rescues of the financial crisis by seizing control a year ago of the two largest mortgage finance companies in the world, Fannie Mae and Freddie Mac.

While this made it possible for many borrowers to keep getting loans and helped protect the housing market from further damage, the government's newly dominant role -- nearly 90 percent of all new home loans are funded or guaranteed by taxpayers -- has far-reaching consequences for prospective home buyers and taxpayers.

The government has the power to decide who is qualified for a loan and who is not. As a result, many borrowers among both poor and rich are frozen out of the market.

Nearly one-third of those who obtained home loans during the boom years of 2005 and 2006 couldn't get one today, according to mortgage industry analysts. Many of these borrowers were never really able to afford their homes and should not have gotten loans. But many others could, and borrowers like them are now running into tougher government standards.

At the same time, taxpayers are on the hook for most of the loans that are still being made if they go bad. And they are also on the line for any losses in the massive portfolios of old loans at Fannie Mae and Freddie Mac, which own or back more than $5 trillion in mortgages.

Bright spot in the housing industry

Interesting piece on NPR that I recommend, here's just a bit of it:

Like many other parts of the country, the Quad Cities region has weathered some tough patches in the housing market. But Realtor Caroline Ruhl says during March and April, her company sold nearly a third more homes than it did a year ago. She attributes the jump in part to pent-up demand after six months of inactivity.

These days, about half of the homes sold in the country are foreclosed or distressed properties. That's not the case in the Quad Cities, where, despite the economic downturn, the combined 6.4 percent unemployment rate is below the national average of 9.4 percent.

In many areas, it's a buyer's market

While it is not great news for those trying to sell a home in many parts of the country, if you are looking to buy a home it's been stated time and time again that this is a buyer's market. In my area as an example, home prices in some cases are 10-30% less than what they were a year ago. With all of the discussion on the mortgage crisis, you may have the impression that it is impossible to get a mortgage. That is not the case in all scenarios. While credit guidelines have been made more stringent in some cases, if you are in the mortgage industry there are companies like Equileads that specialize in helping you find quality mortgage leads.

When you look at their pricing and their guarantee, you'll also notice that you can sign up for the service for free and there is no minimum number of leads that you have to purchase. They also offer an affilate program that might be of interest to those of you who read here that are involved in the mortgage/real estate industry.

It's bigger than subprime...

Highly recommended piece in Time about how the mortgage issue has gone beyond just those impacted by the subprime crisis, how it happened and how that impacts you. A selected portion:

The thing is, subprime isn't the entire story. In fact, looking forward, it's not even the biggest problem. While the raw percentage of subprime loans in delinquency and foreclosure still far outstrips any other sort of mortgage, the types of loans that are now going downhill the fastest are ones that were generally sold to more credit-worthy borrowers.

"Originally, the loan product was driving a lot of the delinquencies," says Steve Berg, managing director of loan-tracker LPS Applied Analytics. "Now you have widespread house-price deterioration and people losing their jobs. If you lose your job, it doesn't matter if you have a good loan product, you still might not be able to make your payment."

It's easy to see the shift by looking at bands of FICO scores — a popular measure of a borrower's creditworthiness. In January, 18.58% of loans associated with a FICO score below 688 were delinquent by one measure — a large number, but just half a percent more than in December. By contrast, the number of delinquent loans in the top tier (752 or higher), jumped by nearly 7% in January. The overall percentage of problem loans remained small by comparison — the delinquency rate rose from 1.45% to 1.55% — but the quickening pace of homeowners falling behind on their payments signifies more trouble ahead. "Those are tomorrow's foreclosures," says Ted Jadlos, senior managing director of LPS, which provided the numbers from its database of 40 million home loans, which covers about 70% of all mortgages.

This means of course any governmental action planned that only addresses the subprime issue is not going to fully address the foreclosure impact this is going to have in communities all over America.

House prices in much of the U.S. will bottom out in fourth quarter

The Wall Street Journal, reporting information stated by Moody's Economy.com most recent report predicts that the the bottom will finally be reached in the fourth quarter of this year and then from there? Things are expected to start to move upward, not everywhere though which makes me wonder if there are additional areas predicted to not improve until 2010 or 2011:

On average, house prices nationwide will hit bottom in this year's fourth quarter at a level 36% below the peak reached in the first quarter of 2006, the report says. The price measure is based on the Fiserv Case-Shiller index.

But some areas will be hit much harder. For instance, the Naples-Marco Island, Fla., area is expected to bottom out in the fourth quarter of 2010 with prices 70% below the peak. The report projects that peak-to-trough declines for metro areas will be 66% in Miami, Fla., 63% in Riverside-San Bernardino, Calif., 58% in Phoenix, 56% in Las Vegas, 53% in Los Angeles, 38% in Washington and 33% in New York. Within those metro areas, different neighborhoods are likely to show very divergent performances; the most desirable areas near good schools and jobs are faring much better than other places.

The peak-to-trough decline will exceed 10% in nearly 62% of the nation's 381 metro areas, the report says, and the drop will be above 20% in about 100 metro areas.

FHA still offering low money down mortgates

Article at CNN tells you how you can qualify for one of the low money down mortgages that the FHA is still offering.

For lenders, income is the main factor in determining who qualifies for an FHA loan. The agency's guidelines dictate that that buyers spend no more than 31% of their gross income on mortgage payments.

Lenders do look at buyers' credit histories, but the interest rates that FHA borrowers pay aren't actually based on their credit scores, as they are for most home buyers, according to Keith Gumbinger of HSH Associates, a publisher of mortgage loan information. Instead, FHA borrowers get the same interest rate that any conforming borrower with a good credit score would receive.

One catch: Borrowers with scores of 500 or less are generally required to pony up a down payment of 10% rather than the 3.5% minimum.

The FHA also charges insurance premiums, which pay to cover any defaults. Borrowers pay an up-front fee of 1.5% to 2.5% of the dollar-value of loan, as well as an annual fee of 0.5%.

It's still a buyers market when it comes to real estate...

While for some trying to get a mortgage right now can be a bit more of difficult proposition, that's not the case for everyone and if you have made arrangements for a home loan, in many parts of the county not only is it a buyers market but, you can find some excellent homes for sale by very motivated sellers. You can pick just about any part of the nation, let's say as an example you were looking for Leander TX homes for sale, you'd discover rather quickly that this area outside of Austin has some really nice homes available.

Quite a few of them have not only two car garages but swimming pools, yes if I was going to dream about living out west, sitting here December with it being below freezing, I'd want to dream about having a pool. For those yearning for an Urban Cowboy type lifestyle, they also have quite a few manufactured housing units listed for sale.

The social networking of Dean Graziosi

Almost anyone who pays attention to the real estate market most likely recognizes either the name Dean Graziosi or the title of the book, Be a Real Estate Millionaire, yet what you might not know is that thanks to the wonders of technology there is an interactive website designed for those following Dean's program to buying and selling real estate. Based on the popular social networking concept, you can ask questions, learn and communicate with experts and novice alike at the Real Estate Investment Center.

There are even contests, like the most recent, "Send Me Away Dean" one where one lucky winner gets not only the vacation of a lifetime but will partner with Dean on a real estate deal. Partnering with Dean alone would be a prize and while that contest is winding down, there is still quite a bit of information that just might help you be the next millionaire...

Is a move to Boston in your future?

Websites and companies that deal with Boston Real Estate catch my eye at times because my husband was actually born in Boston, and he still has some family that live there. It's one of those places that I pay attention to since real estate prices and the market does have an impact on them and at times we talk about leaving here and heading east (or west) with Boston being one of the areas we've discussed.

I'm not sure that our lifestyle will ever reach the point that we would be looking for Boston Luxury Lofts but one can dream and I enjoy looking at the beautiful loft designs. I spent quite a bit of time looking at Strada 234, the views are breathtaking. I've always thought living in a loft in a downtown area would be an amazing experience. Bushari Group Real Estate has a variety of different listings, so if you want to dream about moving to Boston or are actually planning to move to Boston, stop by and see what they have to offer...

Stars at night...big and bright...

The lyrics from that song "Deep in the Heart of Texas" always come to mind whenever I think about Texas. I also think more about topics like round rock texas real estate when the snow and ice season starts here. On my recent trip with my daughter out west there were quite a few really nice towns that caught our eye that not only had some unique home designs but the people we met along the way were very friendly. Money Magazine in 2008 listed Round Rock as the 7th best American small city to live in and their area schools are ranked very high as well. They even have their own minor league ball team, the Round Rock Express.

Many don't realize $7,500 tax credit has to be paid back...

Highly recommended article at CNN that points out the positives and some of the negatives with the $7,500 tax credit for first time home buyers. A few points of special interest:

Buyers must to start paying back the loan within two years, at a rate of no more than $500 a year for 15 years. When the the home is sold, any outstanding balance will be repaid from the profit; if it's sold at a loss and the difference will be forgiven.

"It's not going to provide first-time home buyers with cash up front," said the Consumer Federation of America's Allen Fishbein. "You have to apply to get the credit after the fact. There's a delay before you get the financial advantage."

And there are concerns that borrowers may treat the credit as a windfall, spending it as if it doesn't have to be repaid.

"It may appear to be free money," said Fishbein. "Consumers have to have their eyes open about how this works."

Other economists caution that while the credit may be helpful, it's hardly a solution to the crisis.

"It will not turn things around," said Jared Bernstein, an economist with the Economic Policy Institute. "Given the economy, it will only push a precious few first-time home buyers over the edge right now."

It's also important to point out that the first time home buyer has to have the money to be able to put down first...It's also a bit of a misnomer to call it a first time home buyers credit, since if it has been three years since you owned a home you would qualify.

One way to get office space...

My husband's family lives in Connecticut and they would love for him to return living there. During their most recent visit his mother made it clear that if we were to move there that we would have a house to live in that was much larger than what we presently have. It would be large enough for me to have my own blogging office though with the close proxemity to so many other family members I might want to check out office space Connecticut for a bit farther away location...

100 best places to live your dream...

Recommended article by CNN that looks at the top 100 places to make the dream of starting your own business and a new life happen. I looked at the list to see if there were any places I had dreamed of living at...Some of the places surprised me like Bethesda as one example, others I had never heard of like American Canyon. Blue Ash was the only Ohio town on the list at number 62.

Count us in the numbers...

Most middle class still can't buy a house, many of us are still stuck renting, it's not so much the monthly payment aspect, it's the downpayment. Especially with the current mortgage situation and even here in Toledo where the median home price is much lower.

Although home prices fell in 161 of those markets in the 12 months ending September 30, 2007, according to the study, home costs were still too high for typical working people in most markets.

In Chicago, for example, the median home sold for $262,000. Assuming that a buyer would put 10 percent down and had a spending ceiling of 28 percent of gross income for housing, they'd have to earn $85,589 to buy a home.

But registered nurses earned a median of only $63,938 in Chicago. Customer service representatives grossed a median of $39,876, office clerks $42,441, retail salespeople $23,056 and food service workers $21,786. For these people, home ownership remains far out of reach.

Taxpayer bailout for Countrywide?

The title of this post caught my attention BofA's awesome Countrywide tax break, the subtitle gives you the main jist of it:

Brace yourselves, taxpayers of America. You're going to help Bank of America finance its $4 billion buyout of Countrywide.

A friend of mine has his mortgage through Countrywide so I've been paying closer attention even when I have not blogged about this issue. I recommend reading the article for all of the full details but I really do have to wonder about our current tax code when it comes to situations like this one.