June 2010

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Real-Estate deals found in bankruptcy court

Submitted by jbonica on Wed, 06/30/2010 - 10:07

Bubblenomics

NEW YORK (MarketWatch) -- Investors scouring for cheap real estate assets are starting to find opportunities in bankruptcy courts, where companies are selling assets they no longer can afford to keep.

Three Strikes… Residential Real Estate is Out

Submitted by jbonica on Wed, 06/30/2010 - 10:03

Bubblenomics

-Three strikes and residential real estate is out: A troika of ugly numbers, and what they mean going forward
-Evidence central banks may continue scarfing up gold
-Why “the worst is not in yet” for the euro… and what to do about it
-Congress punts on constitutional duty… Middle-class taxpayers beware
-Readers write: Central bankers and gold, expatriation and taxes

The U.S. real estate market stepped up to the plate this week… and struck out, again. Completely whiffed on three pitches, in fact.

End of Home Buyer's Credit Spells Doom for Housing Sales

Submitted by jbonica on Wed, 06/30/2010 - 10:00

Bubblenomics

The month of May was a record-breaking disappointment for the residential real estate market after potential buyers, no longer buoyed by a generous federal tax credit for home sales, held off on purchases.

This morning the Commerce Department reported sales of newly built homes fell by almost a third during May, confounding analyst expectations and dropping to a record low level.

Sales of new homes have never been slower since the government started measuring in 1963 and that's put home builders' confidence into a tailspin.

A residential real estate malaise?

Submitted by jbonica on Wed, 06/30/2010 - 09:55

Bubblenomics

We pretty much knew it was coming. Home sales were bound to take a dive after the federal home buying tax credits ended in April.

But maybe we didn't realize the extent of the hangover until my colleague Molly Bloom checked in recently with real estate pros in MPR's Public Insight Network.

Many of the responses she got back show a deep frustration right now among typically upbeat people whose livings are tied to residential real estate.

No one used the word malaise (yes, I'm old enough to remember Jimmy Carter's "malaise" speech) but that's what it feels like.

Existing home sales take surprise tumble

Submitted by jbonica on Wed, 06/30/2010 - 09:53

Bubblenomics

Sales of existing homes dropped 2.2 percent in May compared with April, surprising forecasters who expected a 6.6 percent rise, according to data released moments ago by the National Association of Realtors.

Housing Market Threatens U.S. Recovery as Sales Slide

Submitted by jbonica on Wed, 06/30/2010 - 09:50

Bubblenomics

The U.S. real estate market threatens to undercut the Obama administration’s stimulus-driven economic recovery as home sales resume their record slide following the end of the federal homebuyer tax credit.

New-home sales tumbled 33 percent last month to a record low annual pace of 300,000, the Commerce Department said in a report today. Sales of previously owned homes unexpectedly fell 2.2 percent in May, the National Association of Realtors said yesterday, even as mortgage rates remained near an all-time low.

Fannie and Freddie in the Financial System

Submitted by jbonica on Wed, 06/30/2010 - 09:46

Bubblenomics

The original mission of Fannie Mae when it was created in 1938 was to stabilize the badly battered home mortgage market of the Depression with a focus on first-time homebuyers.

The idea was that banks could create loans and sell them to Fannie Mae, freeing up balance sheet capacity. Like many government programs, initially success may be evident, but as in the “open-ended fallacy” that economist Thomas Sowell exposes, monstrous results can emerge as momentum for more subsidization builds.

Uncertainty Dogs Commercial Real Estate Even As Capital Returns

Submitted by jbonica on Wed, 06/30/2010 - 09:40

Bubblenomics

NEW YORK (Dow Jones)--Even as capital returns to commercial real estate, fundamental problems such as unemployment and uncertainity over property prices are likely to hamper recovery, according to a detailed analysis of this segment by PIMCO.

The bond investment company undertook a comprehensive study of commercial real estate similar to its overarching analysis of the housing market in 2005 that led to its prediction of a crash. For the latest study, PIMCO's Investment Committee dispatched people to 10 cities and met with more than 100 market participants to gather data.

Can Commercial Real Estate Ride Out the Impending Storm?

Submitted by jbonica on Wed, 06/30/2010 - 09:38

Bubblenomics

GREENSBORO, N.C., June 16 /PRNewswire/ -- Vacancies have leapt. Rents have plunged. Tenants are suffering declining sales. Needs for warehouse and manufacturing space are contracting. Mortgage delinquency rates are on the rise.

This is a snapshot of an industry facing its day of reckoning.

While the residential real estate industry has been the poster child for the struggles of the financial markets over the past couple of years, the commercial real estate industry must now come to terms with its own challenges.

Homebuilders Lose Confidence After Homebuyer Tax Credit Expires

Submitted by jbonica on Wed, 06/30/2010 - 09:36

Bubblenomics

It was the tax credit, after all. Or so it seems.

One of the timeliest leading indicators for real estate prices -- the homebuilder confidence survey published by the National Association of Home Builders/Wells Fargo -- dropped five points, or 22 percent, in June to a reading of 17. That's the lowest level since March, when the housing tax credit started pushing buyers into the market.

Mike Larson, real estate analyst at Weiss Research, points out it's also the biggest monthly drop since the depths of the recession in November 2008.

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