Housing

[Alex Linder]

California Foreclosures > National New Home Sales

The Big Picture's quote of the day:

“National New Home Sales, on a monthly basis, don’t even add up to half of the total foreclosure activity in California alone in a single month.”

-Mark M Hanson

Let's go to the chart...



While the Census reported new home sales came at 36,000 for the month on an unadjusted basis, Foreclosure Radar reported:

Notices of Default, the initial step in the foreclosure process, rose by 11.8 percent to the second highest level on record at 45,691 filings. Year-overyear filings increased by 10.0 percent from June of 2008.

Mark is close (and things are horrendous), but they aren't quite that bad. So, please use the following quote going forward:

“National New Home Sales, on a monthly basis, don’t even add up to 80% of the total foreclosure activity in California alone in a single month.”

-Jake (EconomPic Data)

http://econompicdata.blogspot.com/20...ional-new.html

[Axel Faaborg]

Why would one buy a new home when a "used" home that's been foreclosed on is cheaper, and often times better(at least according to my values)?

[Kievsky]

this is a time to save up gold coin, even if just a few, and in a few years you'll be able to buy a farm or a multi-family for it.

If there is little or no available credit, the price of housing will have to come way way way way down, down so low so people can buy it with cash. I'm talking in the 5,000 to 10,000 range.

Ideally, get a multi-family on multiple acres, so you can use your tenants as share-croppers.

[-JC]

Anonymous said...
Don't forget that some notices of trustee sales are a bluff. I'd want to know which sales were actually consummated.

About a year ago, I did go to one of those auctions by a huge outfit that advertises on TV and the staff wears black tie formal. It wasn't the bloodbath I'd expected, as everyone had done their homework and bids were much higher than I'd expected.

My sense is that prices have a long, long way to fall yet and those buying presently are much more optimistic than I am.

August 8, 2009 9:50 AM

[-JC]

I owned it on 5 1/4" floppies, so you know it was some time ago. You plugged-in current rents, home prices, interest terms, etc., and you got their answer that, of course, didn't include a lot of things that we might consider. But it was/is useful.

Someone with more time might contact them and see if it is available anymore.

Real Estate Center
2115 TAMU
College Station, TX
77843-2115

Phone: 979-845-2031
Fax: 979-845-0460

<li class="g">Real Estate Center Data

Homes sales and rural land data for Texas metropolitan areas. ... 2009. Real Estate Center at Texas A&M University. All rights reserved.
recenter.tamu.edu/Data/ - Cached - Similar
<li class="g">Master of Real Estate Program | Mays Business School | Texas A&M ...

Mays Business School at Texas A&M University. ... Our program integrates the studies of real estate and business through a broad curriculum, ...
mays.tamu.edu/mre/ - Cached - Similar
<li class="g">[PDF] A Homeowner's Rights Under Foreclosure

File Format: PDF/Adobe Acrobat
Texas A&M University. Revised September 2008. © 2008, Real Estate Center. ..... Texas real estate market into the 1990s. Even though the ...
http://www.sml.state.tx.us/.../tdsml...oreclosure.pdf - Similar
<li class="g">The Gals Blog : Texas A&M Real Estate Center reports on Existing ...

May 31, 2008 ... EXISTING HOME SALES DOWN IN TEXAS TEXAS (Real Estate Center, ... to MLS data compiled by the Real Estate Center at Texas A&M University. ...
www.austinrealestategals.com/.../texas-a-m-real-estate-center-reports-on-existing-home-sales-in-texas.aspx - Cached - Similar

[richyrichard]

Originally Posted by Axel Faaborg

Why would one buy a new home when a "used" home that's been foreclosed on is cheaper, and often times better(at least according to my values)?

I assume that many of these homes that have been foreclosed have been resold to someone else. The media doesn't report that side of the ledger. They keep screaming about the number of homes under foreclosure but don't mention how many have been either re-financed or sold to someone else.

Same with jobs. The media reports and emphasizes the number of jobs lost but don't report the number of new ones. Also, our economy normally turns over a large number of jobs every year anyway, so its only the increase in turnover that is significant.

I still don't think we are really in a recession. I think we are suffering from over-production due to federal programs to "help the poor" and "to help minorities achieve the American dream". The government artificially stimulates production through deficit spending, but the deficit spending devalues the dollar so the people cannot consume the increased production. Thus, the federal government is the cause of the problem, and more of it is not the solution.

[Mike Parker]

Commercial Real Estate Faces More Trouble Ahead: LeFrak

Published: Friday, 14 Aug 2009
By: JeeYeon Park

There are new signs of trouble in the capital markets, which will ultimately affect the commercial real estate sector, said Richard LeFrak, president of The LeFrak Organization.

Watch the Full Interview

“The shadow banks have evaporated,” LeFrak told CNBC. “They were supplying 35 percent of the capital in the industry and they just disappeared.”

Other than paper backed by Fannie Mae [FNM 1.03 -0.03 (-2.83%) ] and Freddie Mac [FRE 1.41 -0.04 (-2.76%) ], LeFrak said mortgage funds have "disappeared," including portfolio lenders who are reducing their holdings in hopes of reducing their exposure to the real estate space.

Commercial real estate has been targeted as the next economic shoe to drop, with offices downsizing due to rising unemployment and rent reduction for retailers and hotels. As a result, banks and lenders have been cautious to provide loans to real estate buyers.

“So other than for their very best customers, [banks] are out of the market and there’s a huge gap today in terms of what’s going to be needed,” LeFrak said.

“There’s $800 billion of refinancing that has to be accomplished in 2010-2011.”

The Federal Reserve’s Term Asset-Backed Securities Loan Facility program (TALF), launched in March, was supposed to be a mechanism by which securitization would restart. But the there is not enough money available in the TALF, said LeFrak.

“It’s a very conservative program in terms of the amount of proceeds and there’s a huge gap between what the TALF will do and what the industry needs,” he said.

http://www.cnbc.com/id/32416800

[Julian Lüchow]

Originally Posted by richyrichard

Same with jobs. The media reports and emphasizes the number of jobs lost but don't report the number of new ones. Also, our economy normally turns over a large number of jobs every year anyway, so its only the increase in turnover that is significant.

The jobs keep disappearing because our businesses out-source thousands of jobs each year. Those jobs are not coming back. What do you think happened to the industrial sector of our economy? These int'l capitalist jerks have bled this country dry and no, it ain't getting better unless we fix it because those assholes don't give a shit about us.

I still don't think we are really in a recession. I think we are suffering from over-production due to federal programs to "help the poor" and "to help minorities achieve the American dream". The government artificially stimulates production through deficit spending, but the deficit spending devalues the dollar so the people cannot consume the increased production. Thus, the federal government is the cause of the problem, and more of it is not the solution.

What you still don't see is that this country used to have an actual productive base, i.e., manufacture. It doesn't anymore except for industrial farming and perhaps car-making. This sector of the economy used to employ most working-age men and they could support families working a single manufacturing job. Compared to the old days, the modern American worker is poor and that is no accident.

This has changed because the Jewish "free trade/free market" creeps who owned the means of production realized that by selling their workers down the river they could pocket vast sums of money. That's what they really mean when they say "gains from trade." It's good to be at the top of the Ponzi - otherwise you're fucked.

Modern capitalism is thoroughly Jewish and it must be gotten rid of like the cancerous parasite it is.

[Paul R.R.]

But they (banks & gov.) still give out housing loans to niggers
and they will never pay one cent back........
Just have to love this country......yea right.

[Mike Parker]

Commercial Real Estate Lurks as Next Potential Mortgage Crisis

by Lingling Wei and Peter Grant
Monday, August 31, 2009

Federal Reserve and Treasury officials are scrambling to prevent the commercial-real-estate sector from delivering a roundhouse punch to the U.S. economy just as it struggles to get up off the mat.

Their efforts could be undermined by a surge in foreclosures of commercial property carrying mortgages that were packaged and sold by Wall Street as bonds. Similar mortgage-backed securities created out of home loans played a big role in undoing that sector and triggering the global economic recession. Now the $700 billion of commercial-mortgage-backed securities outstanding are being tested for the first time by a massive downturn, and the outcome so far hasn't been pretty.

The CMBS sector is suffering two kinds of pain, which, according to credit rater Realpoint LLC, sent its delinquency rate to 3.14% in July, more than six times the level a year earlier. One is simply the result of bad underwriting. In the era of looser credit, Wall Street's CMBS machine lent owners money on the assumption that occupancy and rents of their office buildings, hotels, stores or other commercial property would keep rising. In fact, the opposite has happened. The result is that a growing number of properties aren't generating enough cash to make principal and interest payments.

The other kind of hurt is coming from the inability of property owners to refinance loans bundled into CMBS when these loans mature. By the end of 2012, some $153 billion in loans that make up CMBS are coming due, and close to $100 billion of that will face difficulty getting refinanced, according to Deutsche Bank. Even though the cash flows of these properties are enough to pay interest and principal on the debt, their values have fallen so far that borrowers won't be able to extend existing mortgages or replace them with new debt. That means losses not only to the property owners but also to those who bought CMBS — including hedge funds, pension funds, mutual funds and other financial institutions — thus exacerbating the economic downturn.

A typical CMBS is stuffed with mortgages on a diverse group of properties, often fewer than 100, with loans ranging from a couple of million dollars to more than $100 million. A CMBS servicer, usually a big financial institution like Wachovia and Wells Fargo, collects monthly payments from the borrowers and passes the money on to the institutional investors that buy the securities.

CMBS, of course, aren't the only kind of commercial-real-estate debt suffering higher defaults. Banks hold $1.7 trillion of commercial mortgages and construction loans, and delinquencies on this debt already have played a role in the increase in bank failures this year.

But banks' losses from commercial mortgages have the potential to mount sharply, and the high foreclosure rate in the CMBS market could play a role in this. Until now, banks have been able to keep a lid on commercial-real-estate losses by extending debt when it has matured as long as the underlying properties are generating enough cash to pay debt service. Banks have had a strong incentive to refinance because relaxed accounting standards have enabled them to avoid marking the value of the loans down.

"There is no incentive for banks to realize losses" on their commercial-real-estate loans, says Jack Foster, head of real estate at Franklin Templeton Real Estate Advisors.

CMBS are held by scores of investors, and the servicers of CMBS loans have limited flexibility to extend or restructure troubled loans like banks do. Earlier this month, it was no coincidence that CMBS mortgages accounted for the debt on six of the seven Southern California office buildings that Maguire Properties Inc. said it was giving up. "During most of the evolution [of CMBS] no one ever thought all these loans would go into default," says Nelson Rising, Maguire's chief executive.

Indeed, many property developers and investors complain there is no way to identify the investors that hold their debt and that it is difficult to negotiate with CMBS servicers. In light of the complaints, the Treasury is considering guidance that would allow servicers to start talking about ways to avoid defaults and foreclosures sooner, according to people familiar with the matter. But investors in CMBS bonds argue that the servicers are ultimately bound contractually to the bondholders.

So Maguire will soon have a lot of company. In a study for The Wall Street Journal, Realpoint found that 281 CMBS loans valued at $6.3 billion weren't able to refinance when they matured in the past three month, even though 173 such loans worth $5.1 billion were throwing off more than enough cash to service their debt.

Mounting foreclosures in the CMBS sector would likely depress values even further as property is dumped on the market. And this would put pressure on banks to write down loans. "What's going on in the CMBS world is a precursor for what might be seen in banks' books," predicts Frank Innaurato, managing director at Realpoint.

The commercial-real-estate market could yet be salvaged by an improving economy and bailout programs coming out of Washington. In addition, capital markets are starting to ease for publicly traded real-estate investment trusts. Since March, more than two dozen REITs have managed to raise more than $13 billion by selling shares.

Still, most of the $6.7 trillion in commercial real estate is privately owned. Also, it is unlikely commercial real estate will benefit much from an early stage of an economic recovery. What landlords need is occupancy and rents to rise, and that means employers have to start hiring and consumers need to shop more. So far, there are few signs this is happening.

Write to Lingling Wei at [email protected] and Peter Grant at [email protected]

http://finance.yahoo.com/real-estate...ge-crisis.html