Tuesday, September 8, 2009

Dr. Doom sounding less gloomy

"I believe that the basic scenario is going to be one of a U-shaped economic recovery where growth is going to remain below trend ... especially for the advanced economies, for at least 2 or 3 years," he said at a news conference here.

"Within that U scenario I also see a small probability, but a rising probability, that if we don't get the exit strategy right we could end up with a relapse in growth ... a double-dip recession," he added.

Roubini, a professor at New York University's Stern School of Business, said he was concerned economies which save a lot, such as China, Japan and Germany, might not boost consumption enough to compensate for any fall in demand from "overspenders" such as the United States and Britain.

"If U.S. consumers consume less, then for the global economy to grow at its potential rate, other countries that are saving too much will have to save less and consume more," he said.
SOURCE: REUTERS

201 Folsom on hold for up to 3 years



Via Socketsite comes news about 201 Folsom, Tishman Speyer's project across from the Infinity:
Tishman Speyer has been granted a 3 year extension to start construction on two approved residential towers of “350 and 400 feet above an 80-foot podium, with up to 725 dwelling units, 750 off-street parking spaces, 38,000 square feet of commercial space, and 272 replacement off-street parking spaces for the adjacent USPS facility” at 201 Folsom.
SOURCE: SOCKETSITE

Friday, September 4, 2009

Mortgage rates dip this week

Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.08 percent with an average 0.7 point for the week ending September 3, 2009, down from last week when it averaged 5.14 percent. Last year at this time, the 30-year FRM averaged 6.35 percent.

The 15-year FRM this week averaged 4.54 percent with an average 0.6 point, down from last week when it averaged 4.58 percent. A year ago at this time, the 15-year FRM averaged 5.90 percent.

“Bond yields pushed mortgage rates slightly lower this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Low mortgage rates are helping to keep housing very affordable. Seven of the top eight most affordable months occurred during this year, according to the National Association of Realtors’® (NAR) Housing Affordability Index, which dates back to 1971. As a result, pending sales of existing homes rose for the sixth straight month in July, a trend not seen since the NAR began reporting data in 2001. Moreover, July’s sales were the strongest since June 2007.

“Overall, inflation remains in check while certain sectors of the economy are experiencing some improvement. The core price index on consumer expenditures, a key indicator tracked by the Federal Reserve, rose 1.4 percent in July from the same time a year earlier and represented the smallest 12-month increase since October 2003. Meanwhile, the manufacturing industry expanded for the first time in 19 months, according to the Institute of Supply Management.”
SOURC: FREDDIE MAC

Thursday, September 3, 2009

Millennium Tower over $100 Million closed

MBA proposes new secondary market framework

The Mortgage Bankers Association (MBA) today released a new paper outlining a proposed framework for a refined government role in the secondary mortgage market designed to ensure liquidity for mortgages without presenting unnecessary risks for the taxpayer. The paper, Recommendations for the Future Government Role in the Core Secondary Mortgage Market, is the result of work by MBA's Council on Ensuring Mortgage Liquidity, a 23-member task force representing MBA's diverse membership base.

"It's now been more than two years since the secondary mortgage market collapsed," said Michael D. Berman, MBA's Vice Chairman and Chair of the Council on Ensuring Mortgage Liquidity. "Rebuilding the secondary market is critical to restoring liquidity and confidence. The government has an important, limited role to play to ensure a stable flow of funds for mortgages."

The centerpiece of MBA's recommendation is the creation of a new line of mortgage-backed securities (MBS). Each security would have two components - a loan level guarantee provided by a privately-owned, government-chartered and regulated mortgage credit-guarantor entity (MCGE) and a security-level, federal government-guaranteed wrap.

The wrap would be an explicit government guarantee focused on the credit risk of these mortgage securities, similar to that on a Ginnie Mae security. Fannie Mae and Freddie Mac's infrastructure, including their technology, human capital, standard documents and relationships, could be used as the foundation for one or more MCGEs.
SOURCE: REAL ESTATE CHANNEL

Economy to grow 3.3% in Q3

For the third quarter, economists at Goldman Sachs & Co. predict the U.S. economy will grow by 3.3%. "Without that extra stimulus, we would be somewhere around zero," said Jan Hatzius, chief U.S. economist for Goldman.
Time to start building again, guys...

SOURCE: WSJ

Fed: recession ended in August

With the economy on the mend, Federal Reserve policymakers last month felt comfortable slowing the pace of one of its economic revival programs and not changing any others, according to documents released Wednesday.

Minutes of the central bank's closed door deliberations, held Aug. 11-12, also showed Fed Chairman Ben Bernanke and his colleagues striking a much more hopeful note about the economy's prospects compared with an assessment made in late June. Many Fed officials saw "smaller downside risks," the documents stated.

Fed officials expected the pace of the recovery to "pick up" in 2010, but there was a range of views — and considerable uncertainty — about the likely strength of the upturn because of concerns about how consumers will behave.

After being pounded by the recession, consumer spending finally appeared to be leveling out, the housing market was firming and manufacturing was stabilizing, the Fed said. Plus, the outlook for other countries' economies improved, auguring well for the sale of U.S. exports.
Have we reached the "bottom" of our real estate market? It's starting to look more and more like the answer is yes. Loyal followers know we've been critical of economic conditions for the past 6 months (which is why most of our postings have been about economic news) but the stabilization of the economy and the local market seems to be real and sustained, at this point. Of course conditions can change (if interest rates jump up; if unemployment takes it's toll on the technology industry; if foreclosures continue to rise without loan modification workouts), but we should be fine in San Francisco for the time being.

As such, we're now comfortable getting back to providing information about specific properties and buildings. So if you're interested in new San Francisco developments, like Blu, Soma Grand, the Infinity, One Rincon Hill, Millennium Tower, or the Arterra, or a classic San Francisco home in another neighborhood, our agents are here to help. Feel free to email us at highrisesf@gmail.com.

SOURCE: AP

Wednesday, September 2, 2009

Q2 home prices rise 1.7% nationwide

The average price of homes bought with mortgages funded by Freddie Mac rose 1.7 percent during the second quarter and for the first time in two years there were gains in every part of the U.S.

The quarterly increase followed a 1.5 percent drop during the first quarter, according to a report today from the McLean, Virginia-based mortgage buyer. Measured from a year earlier, home prices fell 6.7 percent, slower than the first quarter’s 8.5 percent annual decline.

Demand is returning to the U.S. housing market after a three-year slump cut values nationwide and led to record foreclosures. The number of contracts to buy previously owned homes rose more than forecast in July and increased for a record sixth consecutive month, reinforcing signs that the housing market is steadying.

“The pickup in home price growth rates is consistent with other housing market indicators that show home sales and single- family construction up in the second quarter,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
SOURCE: BLOOMBERG

Mortgage applications drop week-to-week

Mortgage applications filed last week decreased a seasonally adjusted 2.2% compared with the week before, even though mortgage rates improved somewhat, the Mortgage Bankers Association reported on Wednesday.

Applications for the week ended Aug. 28 were up an unadjusted 22.7% from the same week in 2008, the MBA said. The Washington-based MBA's survey covers about half of all U.S. retail residential mortgage applications.

The week-to-week drop marked a downturn from the comparable 7.5% increase in filings for the week ended Aug. 21.

Mortgage applications to purchase home for the latest week were down a seasonally adjusted 1.0%, compared with the week before. Included within those purchase applications, government-insured mortgages, such as those through the Federal Housing Administration, were up a seasonally adjusted 0.5% from the prior week, according to the MBA's survey.

The government-insured share of mortgage purchase applications for August stood at 40.4%, up from 38.3% in July. The increase put government-insured mortgages at the highest proportion seen since February 1991, the MBA said.

Meanwhile, applications to refinance existing home loans were down 3.1% on a week-to-week basis.

Refinancings accounted for 56.5% of all filings last week, unchanged from the prior week. Adjustable-rate mortgages made up 5.6% of all mortgages, down from 6.5%.
Good stats here: refis dropped (in spite of dipping rates); ARMs only make up 5.6% of applications (showing future stability in lending). Will next week or two weeks from now show an increase in applications (as we enter the typically strong post-Labor Day period? We'll see soon. And that will give us a good indication of what the market will do for the rest of the year.

SOURCE: MARKET WATCH

Tuesday, September 1, 2009

WWJD: What Whould Jim (Cramer) Do

Housing Is Back, Despite Media's Worries
By Jim Cramer
RealMoney Columnist
8/27/2009 6:03 PM EDT

Sometimes the misdirection in the media's interpretation of the mortgage/foreclosure market simply drives me up a wall. Take this morning's fret story, "Loans That Looked Easy Pose Threats to Recovery," in The New York Times. This one is played big online, much bigger than another story, "Signs of Life as Sales of New Homes Improve." The gist of the big story? Option rate ARMs are going to crimp anything good that could happen from the housing recovery.

But you know what? The amazing thing here is the number of option ARMs that they say we are in trouble on: 500,000 homes. Sorry, I know that number is meant to scare people, but it is truly small, especially when you consider that 17 million homes traded during the period from 2005 to the first quarter of 2007, when the reckless lending set in. Given the charges we have taken in the banking system, the reserves we have, the bottom in housing and the robust market we have -- and it isn't just for first-time homebuyers, and it isn't just for low-dollar homes, despite the impressions made by the media -- you have to take this worry and throw it out.

It's like the foreclosure worry. Somehow we keep hearing that the foreclosures are overwhelming the markets. If that's the case, how can new-home sales soared 9.6%? How can home inventories be down 37% year over year and the foreclosure market be ballooning inventory at the same time? Of course the trick here is twofold: very few new homes being built - one-quarter of the peak -- and household formation -- almost a million new homebuyers every year.
We then hear that the buying is all $8,000 tax credit related. To which I say, you have to be kidding me. The demand for homes is real because they are affordable, a combination of price declines and mortgage rates.

Plus, and this is an important plus, we continually hear that the banks are holding back foreclosed homes. First it was because of moratoriums. Now it is because banks don't want to take the losses. Oh come on, they are selling what they have to sell, and they are watching house prices appreciate. We can keep endlessly coming up with reasons why the bottom isn't real. But let's be very clear, this option ARMs problem is not that big, not that big at all.

As a housing bull, I found the piece gratifying.
SOURCE: FORECLOSURES.COM

VIDEO: Lawrence Yun, Chief Economist, National Association of Realtors

Pending home sales continue to rise; up 3.2% from June to July

Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors®.

The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7.

Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said.
SOURCE: NAR