July homes sales fall to 1995 levels

Sales of previously occupied homes plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas.

July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.

SOURCE: MSN

Real estate prices "stickier" in top tier SF neighborhoods

In a sign of the uneven toll the housing downturn has taken on San Francisco homeowners, home values in some of the city's poorer neighborhoods have fallen more steeply than in tonier areas. Median home values fell most sharply in Bayview and Visitacion Valley on the city's southeast fringe, dropping 36% and 28%, respectively, in June from four years earlier, according to real-estate website Zillow.com. The declines were less dramatic in more affluent neighborhoods such as Glen Park and Pacific Heights, where median home values dropped 7% and 6% over the same period.

SOURCE: WSJ

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

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

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

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

First-time buyer credit may be extended, increased

Bills to extend the maximum $8,000 tax credit for first-time home buyers, which expires Nov. 30, are pending in both the U.S. House and the Senate.

Sen. Christopher J. Dodd, a Connecticut Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Republican Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.

Senate Majority Leader Harry M. Reid of Nevada favors an extension of the current credit. He was quoted by the Las Vegas Sun saying, "It's something we can get done."

Odds are that the credit will be extended and broadened to cover all buyers next year, but the chances of the amount increasing aren’t as good, observers say.

SOURCE: REALTOR MAGAZINE

Low mortgage rates fueling increase in sales

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 5.14 percent with an average 0.7 point for the week ending August 27, 2009, up from last week when it averaged 5.12 percent. Last year at this time, the 30-year FRM averaged 6.40 percent.

The 15-year FRM this week averaged 4.58 percent with an average 0.7 point, up from last week when it averaged 4.56 percent. A year ago at this time, the 15-year FRM averaged 5.93 percent.

"Long-term mortgage rates were barely changed this week, remaining historically low, which is helping to sustain a high level of affordability in the home-purchase market," said Frank Nothaft, Freddie Mac vice president and chief economist." Low rates contributed to existing home sales rising for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007, according to the National Association of Realtors®.

"Similarly, new home sales rose for the fourth month in a row to 0.4 million, the strongest pace since September 2008, the Commerce Department reported. The sales gain helped to reduce the number of new unsold houses on the market to the lowest amount since March 1993. In addition, house prices in June rose nationally for the second consecutive month, according to the Federal Housing Finance Agency's purchase-only house price index."

SOURCE: REAL ESTATE CHANNEL

New homes sales increase 9.6% in July

Purchases of new homes in the U.S. jumped more than forecast in July, adding to signs that the economy is rebounding from the worst recession since the 1930s.

Sales increased 9.6 percent, the most since February 2005, to a 433,000 annual pace, figures from the Commerce Department showed today in Washington. The number of houses on the market dropped to the lowest level in 16 years.

The gain in sales, together with rising purchases of existing homes and steadying prices, indicate the housing slump may be ending as Federal Reserve efforts to thaw credit and the Obama administration’s first-time homebuyer incentives lift demand. Job losses and mounting foreclosures mean any rebound in construction may be limited.

SOURCE: BLOOMBERG

Mission Bay ready for its close up

It's taken four mayors and three planning directors to create what is now the last swath of San Francisco land where planners can create a neighborhood from scratch. So far, 3,000 people have moved into the 300-acre rail yard south of the Giants baseball park. The neighborhood is 35 percent built, and 15 years from now, it's expected to have 11,000 residents.

Mission Bay feels as if it escaped the economic downturn - stores are opening, buildings are going up, and young professionals are zipping out of $700,000 condos to get to work. Most live in a six-block area north of Mission Bay Creek. These pioneers say it's now starting to feel like a place worth staying in on the weekends.

"It's changed a lot. It's way more crowded now," said Claudia Arrenberg, 27, who shopped for pasta and fruit with her 2-year-old daughter at the new Mission Bay Farmers' Market.

All in all, it's starting to feel like a neighborhood. Hopefully SWL 337 won't take as long to complete.

SOURCE: SFGATE

The Price is Right (in Miami)

Are you listening, San Francisco developers? Want more sales? It's all about pricing. Get in front of the market again and you'll make sales.

Are the good 'old days of real estate back? It appears so in Downtown Miami.

In recent weeks developers have sold hundreds of condos, in a flurry of activity they haven't seen since the peak of the housing market. Some builders are actually running out of inventory. The first building to sell out, Brickell on the River, happened quietly and quickly selling 120 units in just six weeks time.

"It's pretty impressive when you walk into a sales office and you have 20-30 people waiting to see units. Sounds crazy but it's actually happening now," Andres Asion, with Miami Real Estate Group, told CBS4's David Sutta.

Before Asion could deposit the checks, he had sold out the entire building out; something developers in this area have not been able to do for the past three years.

So how did Asion do it?

Price. They dropped it roughly a $100 thousand under their closest competition. The final prices were half of what units sold for at the peak of the market.

"You could see it in the pricing. When you could buy a two bedroom condo for $220,000 in which before it was $450,000 people are really pulling the trigger," Asion said.

SOURCE: CBS 4

VIDEO: Mortgage delinquencies increase for prime loans

Resales jump 7.2% in July - largest increase in 2 years

Sales of previously owned U.S. homes jumped 7.2 percent in July to mark the fastest sales pace in nearly two years, an industry survey showed Friday, in a strong sign that housing is pulling out of a three-year slump.

Sales in July rose for the fourth straight month to hit an annual rate of 5.24 million units, the highest rate since August 2007, the National Association of Realtors said, beating market expectations for a 5 million unit pace. Sales in June had been at a 4.89 million pace.

July's increase was the largest monthly gain since the series started in 1999. The last time sales rose for four consecutive months was in June 2004, the NAR said.

SOURCE: CNBC

Chinese investors buying mortgage-back securities

Not so "toxic" to the Chinese, so it seems.

China's $200 billion sovereign wealth fund, which suffered big paper losses on stakes in Morgan Stanley (MS, Fortune 500) and Blackstone (BX), is set to invest up to $2 billion in U.S. mortgages as it eyes a property market recovery, two people with direct knowledge of the matter said Monday.

China Investment Corp. (CIC) plans to invest soon in U.S. taxpayer subsidized investment funds of toxic mortgage-backed securities, which it sees as a safer bet than buying into the Federal Reserve's Term Asset-Backed Securities Loan Facility (TALF).

Under the Public-Private Investment Plan (PPIP) launched earlier this year, the U.S. government plans to seed a number of public-private investment funds that would combine taxpayer money with private capital to buy as much as $40 billion in toxic securities from banks.

Compared with TALF, the new and smaller PPIP program focuses on safer toxic securities, which must have triple-A ratings from at least two agencies, and are debts guaranteed by the Federal Deposit Insurance Corporation (FDIC), sources explained.

"In this case, CIC feels safer to invest and the safer it feels, the more confident it will naturally feel about its investments, as well as in the prospects for the U.S. economy," said one of the sources.

SOURCE: CNN

Single family starts and permits up in July

Production and permitting of new single-family homes continued on an upward trajectory in July, according to newly reported numbers from the U.S. Commerce Department today. Meanwhile, substantial declines on the multifamily side dragged down the overall numbers, with combined single- and multifamily starts down 1 percent to a seasonally adjusted annual rate of 581,000 units and combined single- and multifamily permits down 1.8 percent to a 560,000-unit rate.

“The latest report marks a fifth consecutive month of improvement in single-family housing starts and a fourth consecutive month of improvement in single-family permits,” noted NAHB Chief Economist David Crowe. “This is exactly in keeping with our latest member surveys, which indicate that builders are cautiously optimistic about single-family sales conditions over the next several months. That said, the significant drop-off in multifamily construction and permitting shown in recent months’ reports may be a harbinger of the financing challenges facing all home builders going forward. A severe lack of credit for acquisition, development and construction financing, along with other issues tied to low appraisals and the upcoming expiration of the first-time buyer tax credit, could derail the progress made so far. Government action is required to ensure that housing can help generate jobs and economic growth in the days ahead.”

The good news is tempered by the potential expiration of the first-time buyer credit, due to expire in November:

“With the impending expiration of the first-time home buyer tax credit at the end of November, July was probably the last month in which to get homes permitted and started in time for customers to take advantage of that valuable incentive,” noted Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. “Builders were responding to improved demand related to that upcoming deadline and also to the first signs of an economic recovery.

However, it remains to be seen what happens after the tax credit expires, and the severe credit crunch that has curtailed many multifamily projects is looming over single-family builders as well. Congress and the Administration need to take action now in order to maintain the momentum toward a housing and economic recovery.”

SOURCE: NAHB