August 2009

Buyers Rush to Beat Tax Credit Deadline

Real estate professionals report that first-time home buyers are flooding the sale market, pressed to finalize a deal before the federal government’s $8,000 tax credit offer expires on Nov. 30.

Because mortgage approvals, residential inspections, and other steps in the buying process typically take about two months, buyers hoping to take advantage of the incentive will need to have a contract by the end of September.

The new flurry of activity now as house-hunters try to meet the deadline is triggering bidding wars and energizing the property market, which historically is slow at the end of summer. As a result, more homes are getting their full asking price.

Source: Chicago Tribune, Kathleen Lynn

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Study: Americans Still Want to Be Home Owners

Despite all of the bad news in the media about homeownership and mortgages, most Americans still believe buying a home is a great investment, according to a new study commissioned by Bankrate.com.

Among the findings from the study:

* 92 percent say that a home is a good investment for the future.
* 48 percent worry about losing or being unable to afford their homes.

“These results provide an interesting illustration of the public’s mindset in a difficult economy,” says Julie Bandy, editor in chief at Bankrate. “While nine out of 10 still believe in the American dream of homeownership, nearly half worry about losing their homes.”

Source: Bankrate.com

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Florida Panel Urges Mediation on Foreclosures

A panel chaired by the Florida judiciary is recommending strategies to clear out the backlog of foreclosed properties in the state, including mediation for primary homes and a fast-track plan for vacant and abandoned properties.

The 15-member panel chaired by Circuit Judge Jennifer Bailey of Miami agreed that managed mediation should be required for primary homes in foreclosure unless both the borrower and the bank agree to opt out.

Opponents to the plan said mandatory mediation would slow the process.

Source: The Associated Press

Vacancies Still Strain Commercial Properties

Commercial real estate is feeling the pain as retailers cut back on rental space in light of unemployment and a weak economy.

Just this week, Maguire Properties Inc., which owns office buildings in Southern California, walked away from seven of its properties because it couldn’t pay the mortgages and may abandon others, according to rating agency Realpoint.

“The bottom line: defaults are exploding,” said Richard Parkus, an analyst with Deutsche Bank. “It’s terrible. It’s going to be worse than in the early ’90s.”

Source: The Associated Press, Alex Veiga

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

10 Cities Leading the Market Recovery

Here’s more evidence that housing is turning around. Forbes magazine identified 161 of the country’s largest metro areas where sales activity has increased compared to 2008, and where foreclosure sales as a percentage of total sales, are low.

The magazine considers these markets as on the road to recovery.
1. Miami-Ft. Lauderdale, Fla.
2. Lincoln, Neb.
3. Colorado Springs, Colo.
4. Salem, Ore.
5. San Luis Obispo, Calif.
6. Bremerton, Wash.
7. Denver, Colo.
8. Redding, Calif.
9. Santa Barbara, Calif.
10. San Jose, Calif.

Source: Forbes, Matt Woolsey

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

Mortgage Brokers Try to Change Appraisal Rules

The National Association of Mortgage Brokers spent nearly $1.1 million in the second quarter to persuade legislators that the new rules for home appraisals discourage sales and push down prices.

The new rules, which took effect May 1, prevent mortgage brokers from ordering appraisals. Only a mortgage lender can order an appraisal, and they must do it in a hands-off way.

The association lobbied Congress, the Federal Reserve, the Federal Trade Commission, and the Department of Housing and Urban Development, according to a filing with the House clerk’s office. In all, the mortgage brokers have spent $1.5 million lobbying in 2009.

Source: The Associated Press

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

U.S. Will Extend Lending Program

The Federal Reserve and the Treasury Department have agreed to extend the Term Asset-Backed Loan Facility (TALF), which frees up loans to build apartment communities, office complexes, and other income-generating properties.

The move comes even though the program has yet to make significant progress in resuscitating the ailing commercial property market–due to its relatively small size.

White House officials have no plans to pad the program with more federal resources, even as rising vacancies and declining rents leave building owners vulnerable to default. Some observers fret that a new wave of defaults is on the horizon, with $814 billion in commercial real estate loans on pace to mature between now and 2011.

Source: Washington Post, Annys Shin and David Cho

Commercial Market Shows Signs of Rebound

Analysts point out that competition in commercial lending is increasing on the West Coast, which they call a sign that the drought in the commercial loan business is ending.

Citigroup Inc. analyst Darrell Wheeler said there was “aggressive” competition among insurance companies and foreign banks to fund office properties. Other new lending programs include securities sales through the Federal Reserve and opportunity funds that are looking to buy debt-free assets.

“These disposition options would not have existed just two months back, so market conditions are changing very quickly,” Wheeler wrote.

He concluded that with increasing financing “valuations for these assets should quickly recover if the economy is recovering, and we now expect the number of voluntary defaults will start to drop off.”

Source: Reuters News, Al Yoon

——————–
Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

Hotels in Default on the Rise

An increasing number of owners of hotels are walking away from their properties and turning the keys over to the bank.

More than 1,000 non-casino hotel properties and 31 casino hotels are in default with a total loan value of more than $25 billion, according to research firm Real Capital Analytics.

Unlike other commercial real estate with long-term leases, guests can abandon a hotel overnight, leaving the management with little or no cash flow.

Many of the hotels in default are publicly traded. “Pricing for hotels really got out of control in 2005 to 2008 and the public companies were aggressive in buying assets, so they piled on a lot of mortgage debt,” says David Loeb, a lodging analyst with Robert W. Baird & Co.

Source: The Wall Street Journal, Kris Hudson

——————–
Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

Banks Plan to Keep Lending Tight

Banks tightened standards for all types of loans in the second quarter, the Federal Reserve reported Monday.

About 35 percent of senior loan officials said they tightened standards somewhat and none of the 51 responding banks said they loosened standards for prime mortgages. The rest said their standards for mortgages remained the same or were substantially stronger.

Banks also told the Fed that they expected to maintain strict lending standards until at least the second half of 2010.

“Most banks have woken up to the fact that there is a lot more risk in their loan books than they ever thought possible,” says Joel Conn, president of Lakeshore Capital LLC in Birmingham, Ala. That has caused many banks to reconsider their requirements for future lending, Conn says.

Source: Bloomberg, Craig Torres

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