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Articles
Widespread Fear Freezes Housing Market, NYT
“In the financial markets, a lack of liquidity immediately leads to falling prices,” said Lou Barnes, the founder of Boulder West Financial Services. (Boulder West was acquired last year by Premier Mortgage Group.) “In the real estate market, something different happens,” he added. “Illiquid real estate markets freeze.” That is what is happening now. For months, the Obama tax credit had been the only grease in the housing market. Now that it is gone, the buying and selling of houses is essentially grinding to a halt.
You have to wonder sometimes what they’re smoking over there at the National Association of Realtors. On Tuesday, the self-proclaimed “voice for real estate” released its “existing home sales” figures for July. They were gruesome. Sales were down 27 percent from the previous month, and down 26 percent from a year ago. Annualized, the July sales figures would translate into fewer than 3.9 million homes sold this year — a staggeringly low figure. (The record high occurred in 2005, when more than seven million houses were sold.) The months-to-sale number was depressingly high; the Realtors group reported that it now takes more than a year to sell a typical house, compared with six months in a normal market. The amount of inventory is high. Lest we forget, these awful numbers are coming out at a time when the financial incentive to buy could hardly be stronger: the fixed rate on a 30-year mortgage is at an incredibly low 4.36 percent, according to an authoritative survey conducted by Freddie Mac.
By Joe Nocera, August 27, 2010 NYT
Link to article
08/28/10 NYT
Manhattan's Luxury Real Estate Sales Gain as Housing Stalls, WSJ
"This is August, when you would think nothing is doing, but when apartments are priced right at all price points they will sell in a week," said a Manhattan broker. Across the country, inventory of unsold apartments has been rising, but in New York, brokers say it has been tightening. Properties that had lingered on the market for many months during the housing downturn are getting sold, and not yet replaced with new inventory.
Despite rising gloom about home sales across the country, sales of apartments in Manhattan appear to have strengthened this summer, with median prices up, inventory down and an increase in the number of apartment closings.The figures suggest that the Manhattan market, buoyed by a resumption of hiring and a healthy Wall Street bonus season ahead, has so far escaped much of the distress across the country. The National Association of Realtors reported Tuesday that existing home sales nationwide plummeted by 27% in July, following the expiration of federal housing tax credits.The tax credits, worth as much as $8,000, had much less of an impact in the Manhattan market because the credits made up a much smaller percentage of sale prices than in lower-priced markets. July's median home sale price in Manhattan was $900,000, compared with $182,600 nationwide.Still, there is some worry among some brokers here that economic uncertainty may stall luxury sales in the fall, as buyers become more reluctant to sign contracts. Some also fear a rush to sell by owners worried about likely increases in capital gains tax rates next year could push down prices. Dolly Lenz, a top-selling broker at Prudential Douglas Elliman, said that buyers have begun holding back. "There is a lack of confidence and a lack of direction," she said. "You can feel the mood and it is not a good mood. There is no rush to buy and people are gambling that prices are going down."
By Josh Barbanel, August 25, 2010 WSJ
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Snowmass Bankruptcy Crystallizes Hypo Bank's U.S. Property Woes, BB
“It’s good news that there
seems to be some path forward,” said a real estate broker whose
offerings include a two-bedroom, two-bath penthouse for $1.25 million.
“The truth is that this is a great opportunity for anyone who loves
skiing. In the long run, this project will be awesome.”
ASPEN SNOWMASS REAL ESTATE - Snowmass Village, the Colorado ski town
neighboring Aspen, got a lift in 2007 when Hypo Real Estate Holding AG
agreed to arrange $520 million of loans to complete a $1 billion
year-round resort. Three years later, construction has halted on parts
of the 19-acre Base Village in Snowmass, where some buildings are
wrapped in plastic, and Hypo has been seized by the German government.
When the lender, whose 2009 implosion was Germany’s biggest bank failure
since World War II, tried to foreclose on the developers in July, it
was met by a countersuit that accused it of a “shameful repudiation” of
its obligations.
The resort’s fate is a microcosm of all that has gone wrong for the bank
as it handed out more than $8 billion to finance U.S. real estate
projects during the property bubble. They include the Landmark, a luxury
condominium and retail development near Denver, and a stalled
hotel-condominium project in Phoenix. Hypo has taken control of both
properties in the past 18 months, according to Real Capital Analytics.
By Jonathan Keehner and Oliver Suess, Aug 25, 2010 Bloomberg
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Plunge in Home Sales Stokes Economy Fears, WSJ
"At this point in the recovery, every little bit counts," said
economist Paul Dales of Capital Economics. "A double dip in the housing
market and house prices would not be enough to generate another
recession. It would certainly help to hold back the recovery." He
expects home prices to fall another 5% after a 30% decline during the
recession.
U.S. home sales plummeted in July to a level not seen in more than a decade, spurring fears of renewed weakness in housing prices and the broader economy.Sales of previously owned homes fell 27.2% from June to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday, the lowest level since the industry group started its tally in 1999.The expiration of a home-buyer tax credit in the spring was expected to damp buying, though less severely. Economists said the sales drop—together with a corresponding rise in the inventory of unsold homes—meant another decline in housing prices was on the horizon. House prices had stabilized last year after declining since 2006. High unemployment and meager wage growth already are driving many Americans' reluctance to make major purchases, so a return of falling home equity could further depress confidence and consumer spending.
By Sudeep Reddy and Nick Timiraos, August 24, 2010 WSJ
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Housing Market Plunged in July, Fueling Anxiety, NYT
Americans’ long infatuation with owning a home, which even the economic collapse of 2008 could not kill, shuddered and stalled
last month. Housing sales in July plunged 25.5 percent below the level of a year ago, the National Association of Realtors said on Tuesday, as buyers lost the spur of a government tax credit. The steep descent surprised nearly every analyst and put the volume of single-family home sales at the lowest level since 1995. The financial markets took the news badly, with the Dow Jones industrial average closing down 134 points to a six-month low. As investors sought security, the yield on the two-year Treasury note fell to a record low. Mortgage rates are the lowest in modern memory while affordability, because of price declines of 30 percent in many areas, is the highest in at least a decade. The government is allowing buyers to put only a token amount down, guarantees lenders against default and regularly issues proclamations that the worst is over. Apparently, all of that is not enough to put a floor under housing. With unemployment steady for month upon month at more than 9 percent, and with millions heavily in debt or simply skittish, many potential buyers are lost to the market. No region was immune in July, with sales in the Northeast dropping 30 percent, the Midwest falling by a third, the South down 20 percent and the West off 23 percent.
By David Streitfield, August 24, 2010 NYT
Link to article
Articles
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Housing Fades as a Means to Build Wealth, Analysts Say, NYTAug 22, 2010
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Upper-Income Taxpayers Plan for Capital Gains & Income Tax Hike, WSJAug 21, 2010
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Goodbye, Glitzy Condo Pitches, Hello Re-Invention, NYTAug 20, 2010
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Billionaire Land Swap Triggers Colorado Dust-Up, WSJAug 20, 2010
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