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The recent uptick in home sales, green shoots of new housing starts and rebounding stock market may suggest that the long-awaited turn in the U.S. economy is here.But is this daylight at the end of the tunnel or the beam of an oncoming locomotive of commercial real estate insolvency coming down the tracks on a collision course with a shaky economy? Commercial real estate (CRE), valued at $3.5 trillion in the U.S., has experienced a 39% decline in prices from the peak only two years ago, according to the MIT Center for Real Estate. This drop is greater than the...

Mortgage lenders say the flood of foreclosures has not yet crested. Highwater mark should come this fall.

Foreclosure rates in the U.S. remain near record highs. More than 13% of American homeowners with a mortgage are either behind on their payments or in foreclosure. The latest report from the Mortgage Bankers Association, released today, shows the percentage of loans that entered the foreclosure process dipped slightly to 1.36%, down from an all-time high of 1.37% in the first quarter. However, that number may soon rise again as mortgage delinquency rates continued to climb in the second quarter. That news is no surprise to Karen Weaver of Deutsche Bank. She startled everyone a few weeks ago when she...

The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.24 percent of all loans outstanding as of the end of the second quarter of 2009, up 12 basis points from the first quarter of 2009, and up 283 basis points from one year ago, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 64 basis points from 8.22 percent in the first quarter of 2009 to 8.86 percent this quarter.

Authorities in the United States and Canada intensified their search today for a reality TV show contestant named by police as a "person of interest" in the case of a 28-year-old swimsuit model whose dead body was discovered stuffed into a suitcase and dumped into a Buena Park trash bin. The dragnet is centered on Ryan Alexander Jenkins, a 32-year-old real estate developer from Calgary, Canada. A source close to the investigation said Jenkins married swimsuit model Jasmine Fiore in Las Vegas a few months ago and reported her missing on Saturday. Jenkins operates Skyhomes in Calgary, which sells million-dollar-plus...

Debt problems are hurting commercial real estate. And commercial real estate is hurting banks. So we’re in a vicious cycle. That’s what this Fox Business report looks at. This report calls commercial real estate "the next financial tsunami" and says that almost every deal financed between 2005 and 2008 will not be able to be re-financed without additional equity.

Is China the Next Real Estate Bubble? Weak export demand and looming Politburo changes are incentives to keep the monetary spigot wide open. By MICHAEL KURTZ Chinese policy makers have lately spooked markets into thinking they might soon take away the monetary punch bowl that's been fueling the local asset recovery. Don't be fooled. Beijing is likely to continue priming the monetary pump to support domestic markets. Exports remain weak despite positive signs from the U.S. and Europe, and domestic consumption has a long way to go to make up the gap. Spending on infrastructure is contributing massively to 2009...

Despite signs that the real estate market is bottoming out, millions of homeowners are likely to find themselves in worse shape within the next two years. Nearly half of the nation’s 52 million mortgage borrowers will have negative equity by the end of the first quarter of 2011, up from the 14 million at the end of this year’s first quarter, according to estimates in an Aug. 5 report by Deutsche Bank (DB). With so many borrowers underwater – or owing more on their home than it’s worth – the risk is high that they’ll default and their homes will...

Almost half of homeowners with a mortgage could be underwater by 2011, says Deutsche Bank. We asked how that will play out. NEW YORK (Fortune) -- Karen Weaver, global head of Deutsche Bank's securitization research division -- responsible for analyzing credit default swaps, collateralized mortgage obligations, and other exotic Wall Street products -- said last week that 48% of U.S. mortgage owners will end up owing more than their home is worth by 2011. The figure may have left many Americans wondering how this could be possible. But consider that 27% of U.S. homeowners with a mortgage are already "underwater."...

AS RECENTLY AS LAST MONTH, stories were being written about how the next shoe to drop on the economy would be in the commercial real estate sector. It did not take much of a Web search to find warnings going as far back as early 2008. The talk was that hundreds of billions of dollars of commercial mortgages would default. Yet, prices of commercial real estate investment trusts (REITs) have been soaring over the past few weeks and the technicals have not looked this good in a long time. Mr. Market does not quite agree with talking heads. While the...

Volume of 'subdivision' vacant lots overwhelms banks Some fire-sale prices on have dipped to 20 to 30 cents on the dollar By Paul Donsky The Atlanta Journal-Constitution 12:00 p.m. Saturday, August 8, 2009 You think it’s hard selling a house these days? Try unloading a subdivision. And not just any subdivision, but one with few if any completed homes and a weedy patch where the swim-and-tennis center was planned. That’s the reality many Georgia banks find themselves in amid a foreclosure crisis that has claimed not only individual homes but also entire failed developments. These idled, “zombie” subdivisions can be...

Much to their dismay, Americans learned last year that they “owned” Fannie Mae and Freddie Mac. Well, meet their cousin, Ginnie Mae or the Government National Mortgage Association, which will soon join them as a trillion-dollar packager of subprime mortgages. Taxpayers own Ginnie too. Only last week, Ginnie announced that it issued a monthly record of $43 billion in mortgage-backed securities in June. Ginnie Mae President Joseph Murin sounded almost giddy as he cheered this “phenomenal growth.” Ginnie Mae’s mortgage exposure is expected to top $1 trillion by the end of next year—or far more than double the dollar amount...

Green shoots...... Click to read, not sure of the rules but they can't be good with cnbc on here, so I didn't post anything. very short article, worth the laugh!

I'm helping the friend of a friend sell a farm/ranch. It's a unique property for the area and when I tried to find "comps," ("comparable properties") I was unable to do so. There just weren't any comparable properties in our area. They had it appraised in 2000 and again in 2009. It appraised at $315,000 and $376,000, respectfully. We listed the property at $376,000 and accepted an offer of $372,000. We were set to close but the day of the closing we learned that Chase Bank's (the buyer's lending institution) appraiser only appraised the property at $315,000, and Chase wouldn't...

<p>The $3.5 tn commercial real estate market is eroding, defaults are doubling on loans for apartment buildings, office buildings, housing complexes, strip malls, hotels, hospitals, and a staggering amount of loans must be rolled over this year into refinancings, or else go bellyup.</p>

More than 2,000 commercial properties in Maricopa County, Arizona have received 90-day foreclosure notices since the beginning of the year. In total, that represents $6.3 billion in real-estate loans. That foreclosure number is horrific. Arizona was one of the canaries in the coal mine of the housing bubble. If it’s playing that role for commercial real estate, we’re in for a lot of pain. Over the past decade the foreclosure rate has stayed around zero. Now foreclosures have skyrocketed, and local real estate brokers say they are still building momentum. Commercial-mortgage lenders are reportedly not modifying commercial-real-estate loans. But the...

"According to your many editorials on the subject, I'm one of the deadbeat borrowers because I've applied for not one, but two, loan modifications. I can't handle my debt so I'm a deadbeat, right? Wrong...

About $2.2 tn of U.S. commercial properties bought or refinanced since early 2004 have gone upside down on their loans, meaning, they've fallen below the price at which they initially were sold at, Real Capital Analytics says.ased on their vintage, approximately $1.4 tn of commercial real estate mortgage loans will be maturing within the next five years, and as much as $750 bn will be maturing in less than three years, says Steven Sandler, chief executive officer of the private equity firm Crosswind Capital in Rye, NY.An estimated $165 bn to $204 bn in U.S. commercial real estate loans could...

Interesting piece from Deutsche Bank on rapidly deteriorating Construction loans. DB predicts that “construction loans will be the epicenter of bank loan problems” • By far the riskiest type of loan product in bank portfolios; • Substantial portion represents loans to homebuilders; • Market currently penalizing properties with vacancy issues extremely severely; • Newly constructed (or only partially constructed) properties are the poster children for vacancy problems in CRE; • Values of most newly constructed properties are down massively; • Expect extremely high default rates and extremely high loss severity rates, both likely to be in excess of 50%; •...

My sister, who has lived outside of the US for almost 15 years, is moving back to the Norfolk, VA area in 2 weeks. She tells me that the real estate agents she has contacted have told her that she can't get a decent house for less than $350,000 (one she looked at online was $378k) and the houses in her price range are tiny, basically starter homes. Is this true for that area? Personally I find that hard to believe in this market. She is looking to live in Norfolk (her husband will be working there), Chesapeake, VA Beach,...

Richard Parkus of Deutsche Bank has updated his Commercial Real Estate outlook with Q2 data. Check out how much the situation has deteriorated since the end of Q1. First, here's where things stood at the end of Q1. The lines on the chart are the percentage of loans that are delinquent, measured by length of delinquency (the black line is the average). Deutsche Bank (bearish) was looking for 3.5% average delinquency by the end of the year. . And here's where they were at June 30. Deutsche Bank is now looking for 6%-7% delinquency by the end of the year....

Is history repeating itself at Goldman Sachs? In late 2006, Goldman shrewdly began backing away from the residential mortgage market. With little fanfare, the firm began aggressively hedging its exposure to home loans, in particular mortgages to borrowers with shaky credit histories. This savvy and somewhat stealthy strategy enabled Goldman to pawn off lots of its soon-to-be toxic mortgages and mortgage-backed securities on other institutions — forcing those foolhardy speculators to pay the price when the subprime market blew up. And much to everyone else’s chagrin, Goldman even made money off the housing meltdown when some of its hedges —...

We've seen lots of wild haircuts in the world of real estate, but nothing like this. Condovultures: A South Florida private equity group purchased 51 new, oceanfront condo-hotel units in the luxury One Bal Harbour complex at $63 per square foot, a discount of 94 percent off of the $1,100 per square foot average recorded sales price, according to a new report from Condo Vultures® LLC. Elcom Condominium LLC with Jorge E. Arevalo and Thomas D. Sullivan in South Miami paid $2.6 million for 41,047 square feet of saleable space in the 124-unit Regent Hotel tower located on the west...

From the SF Gate: S.F. tower's owners will forfeit it to lender (ht John, Jay) The owners of a premier San Francisco office tower plan to forfeit the property to their lenders, the city's second distressed transaction involving a major commercial building in recent weeks ... Hines and Sterling American Property decided to transfer their interest in 333 Bush St. to the original financers, following the surprise dissolution of law firm Heller Ehrman in September ... The 118-year-old law firm defaulted on its 250,000-square-foot lease, leaving the nearly 550,000-square-foot property 65 percent vacant. ... Hines and Sterling bought the tower...

Compliments of RealPoint, whice has provided this useful monthly report publicly, readers can enjoy for themselves the full effect of an economy shooting green on all cylinders. One can hope that RealPoint, which was recently selected for TALF rating-backstop purposes as an NRSRO, will parlay the knowledge contained herein into a fair and balanced assesment of all CMBS tranches that sellout firms S&P and Moody's undoubetdly deem to be a solid AAA+. The charts speak for themselves .

Get ready for another round of bad reporting: The $8,000 Fed tax credit (1st time buyers) and a $10,000 California tax credit (new homes only) likely helped out in NHS this month. Falling prices are also contributing to sales activity of the sector, which represents about 15% of the overall housing market. Here is the official New Home Sales: Sales of new one-family houses in June 2009 were at a seasonally adjusted annual rate of 384,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.0 percent (±13.2%)*...

Southern California Home Sales Surge to Highest Since 2006 La Jolla, CA---Southern California home sales rose in June to the highest level in 30 months as the number of deals above $500,000 continued to climb. June's sales gain, plus another rise in the region's median sale price, indicate buyers responded to price cuts on mid- to high-end homes and found it easier to secure financing for pricier abodes, a real estate information service reported. A total of 23,262 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month....

Drive through California's sprawling inland suburbs and you'll spot the familiar mileposts of a real estate bust: foreclosure signs, brown lawns and abandoned subdivisions. To see the damage in downtown San Diego, walk a few blocks. Then look straight up. There you'll see hundreds of unsold luxury condominiums stacked in vacant high-rises. Some units downtown are now selling for less than half what earlier buyers had paid during the market peak. These see-through buildings, with names evoking European sophistication like Aria and Vantage Pointe, are the opulent spatter from the bursting of one of California's flashiest housing bubbles.

The government says new U.S. home sales rose by the largest amount in nearly nine years last month, in another sign the housing market is finally bouncing back from the worst downturn in decades. The Commerce Department says sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000.

If you’re a fan of classic American firearms (such as the A5 self-loading shotgun, Model 1895 rifle, Model 1897 pump shotgun, model 1911 pistol, and the legendary M2 50-cal BMG), here’s an item of interest. The 8-bedroom Ogdon, Utah house originally built for John Moses Browning is on the market for $374,900. As John Moses Browning is widely considered to be a genius and the greatest American gun designer ever, this house is “hallowed ground” for Browning devotees. The house includes an attic suite with a room that served as Browning’s workshop. One wonders what remarkable designs were hatched in...

When big-box retailers close, other tenants look to shift or end leases. Vacant big-box retail space in shopping centers throughout metro Denver has left many neighboring retailers combing through their leases and looking for a way out. Many retail leases contain provisions known as "co-tenancy" clauses. The clauses take many forms, with some requiring a certain percentage of a shopping center to be leased and others naming specific retailers or categories that must remain open. If the conditions aren't met, the remaining tenants in a center can demand rent reductions or leave altogether. In other cases, tenants who are preparing...

Delinquencies on commercial mortgage backed securities soared $10 billion in June, hitting a 12-month high of almost $29 billion... California led the nation with the highest amount of delinquent loans, closely followed by Texas and Florida. Late loans across the country are up an “astounding” 585 percent from a year ago when just $4 billion were delinquent... California with almost $3 billion in delinquent loans, or 10 percent of the exposure, and Texas with $2.5 billion, or 9 percent of all delinquencies, "remain a major concern." In California, the delinquent properties are spread across the state, compared to Texas where...

Two of America’s biggest banks, Morgan Stanley and Wells Fargo, on Wednesday threw into sharp relief the mounting woes of the US commercial property market when they reported large losses and surging bad loans. The disappointing second-quarter results for two of the largest lenders and investors in office, retail and industrial property across the US confirmed investors’ fears that commercial real estate would be the next front in the financial crisis after the collapse of the housing market. The failing health of the $6,700bn commercial property market, which accounts for more than 10 per cent of US gross domestic product,...

"This time it's different" The state of commercial real estate was one of the most- asked-about subjects in questioning by lawmakers so far in Bernanke’s two days of testimony on the economy. Bernanke said today in the Senate and yesterday at the House Financial Services Committee that it’s too early to tell how effective the Fed’s main initiative in the area will be. As I have pointed out repeatedly for more than two years commercial real estate tends to lag residential in economic downturns by 12-18 months in terms of severity, and sometimes as much as by two years or...

During the boom years, Las Vegas wasn't just a place where gamblers could hit the jackpot, but where hard-working hotel maids and cocktail waitresses could, too. The city offered something almost no other place in America did: upward mobility for the working class. Now, that is evaporating. The recession has jolted Las Vegas in a fundamental way. Like other job-creating cities in the Sunbelt, Las Vegas saw its population, income levels and housing prices surge over the past decade. And like those cities -- including Phoenix, Orlando and San Diego -- it's been battered in the bust. But by many...

Drew Johnson and his wife, Tina had the life many Americans only dream of: A big house in a swanky suburb, a backyard hot tub, and a $100,000 deposit on a new condo with views of the Las Vegas Strip and 24-hour concierge service. They did it all on the salaries of a construction-equipment salesman and a cocktail waitress who brought in $1,000 a week in tips alone. But the recession has slashed their incomes by nearly half, and financing for the condo might not come through. "It's Vegas," says Mr. Johnson, who fears he could lose most of his...

The famous hotel could be open for bids next week The Watergate Hotel made famous by a presidential scandal is expected to be on the auction block next week. Alex Cooper Auctioneers is announcing that it will take bids Tuesday on the Washington landmark. [snip] The Watergate complex was made famous by the 1972 burglary that led to President Richard Nixon's resignation.

This is REALLY BIG folks: NEW YORK, July 16 (Reuters) - Mortgage insurer MGIC Investment Corp reported a wider quarterly loss and said it will stop writing new business as losses mount in the battered housing sector, sending its shares down 14 percent in premarket trade. You basically cannot finance a home purchase with more than 80% LTV (loan to value) without private mortgage insurance - that is, insurance that covers the lender if you default and they take a loss. MGIC (NYSE: MTG) is the largest issuer in this area. They said they will be "trying" to capitalize a...

Foreclosures at record high in first half 2009 despite aid Thu Jul 16, 2009 1:22am EDT By Lynn Adler NEW YORK (Reuters) - U.S. home foreclosure activity galloped to a record in the first half of the year, overwhelming broad efforts to remedy failing loans while job losses escalated. Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday. The number of properties drawing filings, which include notices of default and auctions, jumped 9.0 percent from the second half of 2008 and almost 15...

As property owners run into trouble paying their mortgages, neighborhoods around New York City have been witnessing a disturbing consequence: small and large apartment buildings are being abandoned in a state of disrepair, leaving tenants in limbo without basic services or even landlords. ... Many of these landlords, particularly those who bought in recent years when the real estate market was at its peak, are struggling to make mortgage payments, let alone pump thousands of dollars into buildings for repairs. Elected officials and tenant advocates place much of the blame for the distress of multifamily apartment buildings not on landlords,...

Will the $8,000 homebuyer tax credit be extended, or possibly even expanded? Maybe… Or maybe not. It’s politics after all. Currently there are FIVE bills flitting about Washington, D.C. that would, assuming they are signed into law, either extend or expand the currently existing $8,000 homebuyer tax credit due to end on December 1, 2009. Senator Johnny Isakson (R-GA) introduced Senate Bill S1230 – the Home Buyer Tax Credit Act of 2009 – on June 10. Senator Isakson created the original $15,000 homebuyer tax credit that morphed into the current $8,000 first-time homebuyer tax credit that became law when the...

Question: Is it true that the government is considering a plan that would reimburse new-home buyers if the value of their property declines later? Answer: One of the biggest supporters of such a plan is Joe Hanauer, who rose to fame while heading one of the largest real estate outfits in Chicago and now serves as chairman of Move Inc., which operates Internet realty giant Move.comHanauer has already met with several congressional representatives and officials at the U.S. Department of Housing and Urban Development to "sell" them on the proposal, which he believes could help jump-start the housing market by...

.S. lawmakers rang alarm bells about the troubled commercial real estate industry, which has been walloped by the credit crunch and an implosion of property values. "The commercial real estate time bomb is ticking," Joint Economic Committee Chairman Rep. Carolyn Maloney, D-N.Y., said in opening remarks to a hearing before her panel Thursday. U.S. Sen. Sam Brownback, R-Kansas, said he was distressed about the situation the industry is facing. Banks have yanked back on lending to developers of shopping malls, apartment complexes, hotels and office parks. Meanwhile, the securitization market - a key source of funding for the commercial real...

Treasury Works on 'Plan C' To Fend Off Lingering Threats Troubling Issues in Lending Could Still Disrupt Economy By David Cho and Binyamin Appelbaum Washington Post Staff Writers Wednesday, July 8, 2009 As the financial system tries to right itself after its near-collapse last fall, the Treasury Department has assembled a team to examine what could yet bring it down and has identified several trouble spots that could threaten the still-fragile lending industry. Informally known as Plan C, the internal project is focused on vexing problems such as the distressed commercial real estate markets, the high rate of delinquencies among...

New appraisal rules under fire Critics charge that a new system is fostering the use of appraisers willing to work for low fees and who are willing to conduct home appraisals far outside their typical areas of activity, leading to low-ball appraisals that can hurt builders, real estate agents, consumers and lenders. By Kenneth R. Harney Syndicated columnist WASHINGTON — It's by far the hottest controversy in real estate this summer and it could directly affect the value of your house — probably negatively — by tens of thousands of dollars. The issue concerns lowballed valuations and the new rules...

We noted earlier that real-estate in the northeast--and in New York City especially--hasn't fared nearly as badly as many other places in the country. Specifically, NYC real estate is now down 21% from the peak, according to the April Case Shiller index. That compares to 54% in Phoenix. Ah, but there's a catch. Phoenix real estate has fallen so far so fast that the rate of collapse is finally beginning to decelerate. Not so, NYC. In April, the NYC price decline accelerated to 13% year over year, a new record for this cycle. And it will probably continue to accelerate,...

The following post and its title are courtesy of Matthew Vadum, Senior Editor, Capitol Research Center (CRC). Matthew Vadum and the staff of CRC are looking out for taxpayers and exposing ACORN’s Web of Corruption.

Commercial Real Estate Takes a Beating Tuesday, June 30, 2009, Vol. 124, No. 126 ERIC SMITH | The Daily News SILVER LINING: The Wesley Highland Manor senior nursing facility at 3549 Norriswood Ave. near the University of Memphis sold for $7.3 million in May and was by far the top commercial deal for the month. -- PHOTO BY ERIC SMITH Commercial real estate suffered a sharp decline in May, with sales falling dramatically from the same month a year ago and the previous month. Shelby County saw just 35 commercial sales in May, marking a 49 percent dropoff from 69...

Fauquier County is working to get funds from the Neighborhood Stabilization Program. The latest information says that they're seeking a grant of $2 million with which to purchase foreclosed homes. They also acknowledge that they're more likely to get only $1 million. There are certainly still a fair number of foreclosed homes around. Out of the 75 homes sold in Fauquier last month, 28 of them were foreclosures. Out of those 28, 15 would fall into the price range (130K to 250K) that the county is looking at. But the number of foreclosures in the lower price ranges is shrinking...

Flawed appraisals are derailing real estate sales and depressing values across the United States, the National Association of Realtors said Tuesday as it reported that existing home prices declined 17 percent in May from a year earlier. "It's pointing to thousands of delayed or canceled transactions," Lawrence Yun, chief economist of the Chicago-based Realtors group, said in an interview. "We've had a massive inundation from members saying this is a big problem." Appraisal rules that went into effect on May 1 require lenders that sell loans to Fannie Mae or Freddie Mac to set up a firewall between appraisers and...