Free Republic

Toll Brothers Inc. lost $111.4 million in the fiscal fourth quarter, but the luxury homebuilder is seeing signs of a turnaround in the housing market. Toll Brothers Inc. lost $111.4 million in the fiscal fourth quarter, but the luxury homebuilder is seeing signs of a turnaround in the housing market. The company's loss of 68 cents a share was largely due to continued write downs on the value of its land holdings and staff reductions. Excluding those charges, the builder almost broke even. In the year-ago quarter, which included a larger amount of write downs, Toll lost $78.8 million, or...

General Growth Properties Inc. said Wednesday that it has filed its reorganization plan, and its lenders have agreed to restructure about $9.7 billion in shopping mall mortgage loans, more than previously planned. Last month the mall operator, which earlier this year filed the largest U.S. real estate bankruptcy case in history... The company had about $27 billion in debt piled up at the time. General Growth, based in Chicago, is the second-largest U.S. mall operator.

There's a vital lesson for New York in the travails of Dubai, the little Persian Gulf emirate with big buildings and bigger debts -- if only our politicians and taxpayers would understand. Last week, Dubai's state-owned investment arm, Dubai World, told its banks (mostly British) that it needs a freeze on debt repayments. It also needs to cut $60 billion that it borrowed to speculate on office towers, hotels, luxury retailers and like. Global bankers were shocked. The Dubai government doesn't legally back Dubai World's debts -- but investors had thought that two levels of bailout would protect them if...

Underwater? Maybe You Should Walk Away From Your Mortgage? By Ilyce Glink | Nov 30, 2009 | 7 Comments According to the latest figures, some 23 percent of Americans are underwater with their mortgage. That means their home is worth less than the amount they owe to their lender.If you have a job, and can afford your payments, being underwater may not cause anything other than a really bad headache. But if you’ve lost your job, you’re probably running through all of your available cash plus anything you can beg, borrow and perhaps steal in order to keep making your...

NyPo reports: Just when New Yorkers thought housing prices here might have finally hit bottom, there's fresh evidence of a nasty double dip recession for Gotham's residential real estate -- which some feel can drag down already shredded housing prices by another 10 percent-to-15 percent... After showing slight improvement beginning in the spring, housing prices in New York dipped in September, according to research from S&P/Case-Shiller, which reported last week that its housing price index for the city slipped to 174.38 from 174.89 in August, after posting four straight months of improved prices. In addition, Stan Humphries, chief economist at...

Like many home owners, hotels are starting to drown in debt. They have been enticing travelers all year with sweet deals: credits for in-house spas and restaurants, up to 50 percent off five-star rooms, even free nights. But all that discounting hasn't stopped occupancy from dropping an average of 10 percent. The result? Hotel loans have begun falling into delinquency faster than any other kind of commercial real estate debt. The rising defaults paint a grim picture... The oversupply means room rates should stay low for at least another year, good news for consumers but not so great for hotel...

In the United States, Dubai World's portfolio includes several well-known properties, and the fallout could have a larger impact on the entire real estate market. The company is a partner with casino operator MGM Mirage (MGM.N) in the $8.5 billion CityCenter project, which would add 6,000 rooms to a Las Vegas Strip gambling corridor already saturated with unoccupied hotel rooms. Nakheel, perhaps best known as the developer of Dubai's palm-shaped islands, also carries the Mandarin Oriental and W hotels in New York in its portfolio, and has a 50 percent stake in the Fontainebleau Miami Beach resort. And, through its...

World financial markets are quaking in the wake of a request by Dubai World, a principal investment vehicle for the Emirate of Dubai, to suspend debt service amounting to billions of dollars in the next 6 months. The company owes a total of $59 billion. Islam, of course, opposes interest payments on borrowed money, so much of the debt is so-called Islamic debt, in which different labels are applied, but the concept of paying for the use of money remains. Dubai's fabulous skyline has been built on a vast pool of debt, and property there was often pre-sold and re-sold...

The San Francisco Chronicle's Kenneth Harney is speculating on what the Federal Housing Authority may have to do to shore up its balance sheet. A few things should be kept in mind about such a move: 1. The FHA has been a main spigot through which the government has been propping up the real estate market (See: Real Time Madness: Watching the FHA Prop Up the Housing Market) 2. The FHA is in real bad shape. John Carney points out: The FHA has expanded from guaranteeing just 2% of mortgages to over 20% in just a couple of years, dramatically...

Fresh court rulings will make lending community "absolutely paranoid," says top lawyer. Stuart Saft, a partner at Dewey & LeBoef, argues over at Forbes (via SquareFeet)that judges are exacerbating the pain in commercial real estate. In the last few weeks there have been a series of court decisions that will have repercussions in the credit markets for years to come making an already cautious lending community absolutely paranoid, and restricting credit even if available. In Syracuse, N.Y., a state court refused to allow Citigroup to foreclose a mortgage on what was to be the second largest mall in the country...

The long-feared financial disaster is still looming. Bad court decisions could set it off. The commercial real estate market is on its last legs and unless drastic actions are taken, the effects on the broader economy will be catastrophic. The obvious problem is the excessive amount of debt placed on the properties and the amount of debt that has to be refinanced during a relatively short period of time. Between now and 2013, at least $1.3 trillion of financing comes due, of which $160 billion was the result of securitizations. Unfortunately, as a result of the virtual disappearance of the...

If you already took advantage of the government’s tax credit for first-time homebuyers—or are planning to do it anytime soon—you’ll probably agree with this prediction: Sales of existing homes will peak in the final quarter of 2009, then begin a year-long slide, which is likely to be a sharp one, according to some estimates. Until the unemployment rate falls, the housing market won't recover. “Most of it [the tax credit] is simply shifting sales from one period to another,” says Global Insight economist Patrick Newport. “It doesn’t get rid of the fundamental problem; there's still a glut of houses.” Newport,...

We've seen this over and over again.While Americans seem to recognize that there's been this thing called the housing crash, they don't believe it's happened to them, or at least a lot don't. [snip]Nationwide, when asked about their own home’s value over the past year:• 25% think their home’s value has increased • 26% think their home’s value has stayed the same • 49% think their home’s value has decreasedIn reality, 72 percent of U.S. homes lost value over the past year, and 22 percent of homes increased in value. That’s fewer homes declining versus Q2(83%), and a smaller Misperception Index of 10 (vs....

ATLANTA -- In the waning days of the Great Recession, the federal government is still jumpstarting the economy and propping up financial markets. It is also trying to sell Dresden Heights, a failed condo development on a noisy freeway ramp next to a Motel 6, a Waffle House and a Do-It-Yourself Pest Control. For more than a year, the Federal Deposit Insurance Corp. has been seeking a buyer for 36 partially built condos it inherited from a high-flying, short-lived Atlanta bank. The agency has been fending off vandals, haggling with architects and uncovering the developer's blunders, all in a bid...

According to Thomas Bouchard, a US psychologist famous for his research on twins raised apart,[1] even scientists with good reason to believe that the majority are wrong can be silenced. The reason is...

The good news: National Association of Realtors chief economist Lawrence Yun is predicting that home prices will rise 4% in 2010. The bad news: Lawrence Yun has never been right about anything in his entire life, ever. Yun predicted that sales volume will also rise about 14%. I'm definitely not smart enough to try to make short-term predictions about what will happen with home prices or sales volume. But the track record suggests that Lawrence Yun isn't smart enough either. In July of 2008, Yun opined that "I think we are very near to the end of the housing downturn....

The property market in Shanghai seems to be revving up again stoking fears of an impending price rise, going by the record sales price of an apartment in the expensive but much sought after Tomson Riviera. According to data from Shanghai Real Estate Trading Center (SRETC), the 600-sq-m luxury apartment has been sold for a whopping 96.09 million yuan ($13.3 million) – at 160,848 yuan per sq m – a new record for luxury homes. It also represents a 13-percent increase over the February 2007 sale of a similar apartment. Confirming the development, Li Qing, a manager at Tomson...

NEW YORK (CNNMoney.com) -- Could the foreclosure plague be ending? Foreclosure filings were down 3% in October, the third consecutive month-over-month dip, according to RealtyTrac, the online seller of foreclosed homes. To be sure, foreclosure rates are still elevated from a year ago: They're up 18% compared with October 2008. But the month-over-month decrease followed a 4% drop in filings during September and a 1% fall in August. "Three consecutive monthly declines is unprecedented for our report, and, on first blush, an indication that the foreclosure tide may be turning," said James Saccacio, RealtyTrac's CEO, in a prepared statement. He...

In a span of just three years, hedge-fund manager John Paulson went from practically unknown to practically unparalleled. After a series of smart bets against the housing market made Paulson's hedge fund billions of dollars—including days where it made more than $1 billion—he earned a place alongside George Soros and Warren Buffett as an oracle of investing. In his new book, The Greatest Trade Ever, Gregory Zuckerman, a reporter at The Wall Street Journal, examines how the unlikely team of Paulson and assistant Paolo Pellegrini—as well as a few other investors—bucked conventional wisdom and saw through the housing hype. Who...

A note regarding annual distributions: the Hussman Funds generally pay required annual capital gains distributions during the month of November. As in prior years, our policy is not to announce the exact date of these distributions. For 2009, no capital gain distribution is required for the Strategic Growth Fund. The distribution for the Strategic Total Return Fund is expected to be approximately 0.165 per share (1.35% of the prevailing net asset value), primarily characterized as short-term capital gains. --- Let's begin with a news item from last week. “RealtyTrac today released its Q3 2009 Metropolitan Foreclosure Market Report, which shows...

Commercial and multifamily mortgage lending in the U.S. fell 12 percent from the second quarter to the third quarter and is down 54 percent from year ago levels... The drop includes a year over year decrease in lending for all types of commercial properties. Loans for retail properties are down 62 percent. Loans for office properties are down 56 percent, MBA says. company downsizing has dampened demand for new office space across the country.

Banks are in for another ugly year in 2010. But this time the problem will be the big batch of deteriorating commercial real estate loans on their books.. (Read our cover story about why this real estate bust is different.) Commercial real estate loans that banks underwrote and held on their books skyrocketed to approximately $190 billion in 2007, up from $11 billion in a single year, a decade earlier. In all, banks hold some $1.8 trillion of commercial real estate debt on their books. Trouble is, nobody knows just what the values of the loans on bank books’ are...

...gossip mills are beginning to gush and grind about increasingly muscular CNN news anchor Anderson Cooper and his muscle Mary man-friend Antoine "Ben" Maisani snatching up a very butch firehouse on West Third Street in New York City's Greenwich Village. These roiling real estate rumors of Misters Cooper and Maisani–who recently vacationed together in India –purchasing Fire Patrol House #2 seems to have first found legs a few days ago on the New York City-centric gossip site Gawker. Listing information for the four and some story firehouse shows it was listed at $4,750,000, measures a considerable 8,420 square feet, and...

Owners of properties such as office buildings, warehouses and malls will suffer a surge of painful defaults, write-downs as the market finally faces up to the reality of its diminished conditions. fter spending more than a year in suspended animation, the commercial real estate industry is expected to hit bottom in 2010 with a wrenching thud. Owners of business properties such as office buildings, warehouses and malls will suffer a surge of painful defaults, write-downs and workouts with their lenders as the market finally faces up to the reality of its diminished conditions, according to a report set for release...

At 3.5% Growth, Economy Won't Recover Until President Palin's Second Term Paul KrugmanNov. 1, 2009, 11:08 AM ...If we take 3rd quarter growth to be more or less equivalent to average Clinton-era growth, even after 8 years of growth at that rate we’d only expect unemployment to have fallen from the current 9.8% to a still uncomfortably high 6.3%. It would take us around a decade to reach more or less full employment. As I said in my previous post, that’s well into President Palin’s second term...[SNIP]

Soros, Ross: Commercial Real-Estate Crash Is Coming And It's Going To Be Terrific Henry BlodgetNov. 1, 2009, 8:35 AM The commercial real-estate crash is the worst-kept secret in the economy, but it's happening. It's just taking a long time to play out. (Except in the hotel industry, which essentially has "one-day leases"). Wilbur Ross and George Soros were freaking out about it on Friday: John Gittelsohn and Thomas R. Keene, Bloomberg: Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a “huge crash in commercial real estate.” “All of the components of real estate...

A Chicago suburb could not get anyone to fork over $1 for a home, the Belleville News-Democrat reported. The village of Barrington, Illinois put three older homes up for sale for just $1 each, but was not able to get any interested buyers. The suburb hopes to sell and relocate the homes in order to make way for redevelopment in the downtown area, according to the paper. If no buyers come forward, the village will demolish the houses, which many residents say hold an historic value.

As I walked home recently from a weekend trip to the grocery store, I passed a total of 13 vacant offices with signs saying "for lease" or "for sale." These spaces ranged from approximately 500 to 5,000 square feet according to their signs, and they are stretched along a main, commercial street in the center of Tucson, AZ. There is also an eight-screen movie theater that sits empty as well. These empty commercial spaces ... are empty now, and have been for quite some time. I found it intriguing that both in the central portion of Tucson and also in...

In what could have been the biggest piece of news today, yet making little headway into the media, the Fed announced that it is adopting a policy statement supporting "prudent commercial real estate loan workouts." And even though in traditional Fed fashion, the statement says a lot but is even more vague, some of the implications from a more nuanced read have very serious adverse implications for commercial real estate. The section: Financial institutions that implement prudent loan workout arrangements after performing comprehensive reviews of borrowers' financial conditions will not be subject to criticism for engaging in these efforts, even...

Just about everyone has become familiar with America’s foreclosure capitals – metropolitan areas like Las Vegas with the nation’s highest rate of foreclosed properties (1 in 20) or No. 2 Merced, Calif., (1 in 27). But the problem is expanding to new cities. In fact, as the subprime-mortgage crisis eases for some of the top metro areas, like Merced and No. 3 Cape Coral-Fort Myers, Fla., economic pressures are creating new foreclosure capitals. One of them, Reno-Sparks, Nev., broke into the Top 10 foreclosure metros in the third quarter, according to a RealtyTrac report released Thursday. And others are gaining...

High Foreclosure Rates Spread into New Metro Areas Published: Wednesday, 28 Oct 2009 | 1:23 AM ET By: Joseph Pisani CNBC News Associate It comes as no surprise that metro areas like Las Vegas, Nev. and Fort Myers, Fla. had the highest foreclosure rates in the country—they've been high for some time. Foreclosed Home But high foreclosure rates are now moving into metro areas that previously avoided the problem, according to a new report from RealtyTrac, an online foreclosure marketplace. “Rising unemployment and a new variety of mortgage resets continued to gradually shift the nation’s foreclosure epicenters in the third...

U.S. home prices logged their third monthly increase in August, according to the S&P Case-Shiller home-price indexes, but prices remained below year-earlier levels. Twelve of 20 major metropolitan areas posted price declines of more than 10% from a year earlier, with Las Vegas continuing to post the worst results. Nationally, home prices are at levels similar to the autumn of 2003. As of August, the 10-city index is down 30.2% from its mid-2006 peak, and the 20-city is down 29.3%. The indexes showed prices in 10 major metropolitan areas fell 10.6% in August from a year earlier but rose 1.3%...

Get Ready: The Case-Shiller Will Show Housing Is Falling Again Vince VenezianiOct. 26, 2009, 12:43 PM The last few Case-Shiller reports have shown sequentially increasing home prices, but that's about to come to an end when the new numbers come out tomorrow. The Altos Research 10-City Composite Index is down 1.1% for the third quarter of 2009. Altos Research: From our October 2009 Real-time Housing Report, The Altos Research 10-City Composite Index was down by 0.5% in September and 1.1% during the third quarter. Using the housing market ask prices and more specifically, looking at the ask prices of new...

CHICAGO - Capmark Financial Group, one of the largest U.S. commercial real estate lenders, has filed for bankruptcy protection amid mounting bad debt, becoming the latest casualty in the still turbulent U.S. real estate market. Capmark has been hurt by rising losses on mortgage loans, and has had to foreclose on properties such as the Equitable Building in Atlanta because borrowers were not able to make loan payments. In its bankruptcy filing Sunday in Delaware bankruptcy court, the company listed total debt of $21 billion and assets of $20.1 billion. It seeks to reorganize under court protection, reducing its debt...

NEW YORK (AP) -- Home resales in the Northeast posted the biggest annual increase of any region in the country last month, reflecting a more stable market than September last year when financial markets were roiled. The nine-state region registered 81,000 home resales last month, up 11 percent from a year ago, the National Association of Realtors said Friday. The median price, however, fell 7 percent to $234,700. Nationally, sales of existing homes jumped almost 8 percent from September last year, without adjusting for seasonal factors. The median sales price declined 8.5 percent to $174,900. Real estate agents and economists...

Despite some tentative signs of recovery, the U.S. housing market remains vulnerable to further price drops—especially in areas where large numbers of mortgages are headed toward foreclosure over the next few years. The Wall Street Journal's quarterly survey of housing-market data in 28 major metro areas shows sharp drops in the number of homes listed for sale across the country. But the potential supply of homes is far larger because banks are likely to acquire significant numbers of foreclosed homes in some areas, notably Las Vegas, Atlanta, Detroit, Phoenix, Miami and other parts of Florida, and Sacramento, Calif., over the...

My ex-wife died about two and a half years ago. She had purchased a home in Southern California after our divorce for $250,000. I can’t help but mention that some of the funds that she used were provided by me by order of the divorce Court. Well, we have two children, one 18 the other 16. Since she belonged to a cult religion that believes that there is no disease and that medical care is unnecessary, she therefore made no preparations for a possibility of her death. No Will, no Trust, no life insurance. Well the kids asked me to...

It's hard to not be spellbound by the sight of half of a new house slowly swinging across the street and gently coming to rest on a precast concrete foundation. Raise the roof line, join the two sections, add a decorative facade, tidy up the entrance and it's almost ready for occupancy, right down to the sparkling bathroom mirrors and kitchen appliances. But would you want to live in a house that arrives on two flatbed trucks? Or would you feel your home sweet home is one front step away from living in a trailer? A California businessman with Chicago...

While surfing tonight I ran across this small city website in North Dakota. They are selling lots for homes for $200.00. If I were a hearty soul that wanted to get away, and did not mind the cold, this would be very interesting...

Describing it as a developing story, Fox News Channel’s Bret Baier just reported that President Barack Obama was briefed today about “the next big financial shoe to drop” — commercial real estate. It dovetails perfectly with what I reported nine months ago in a post, Trendwatcher: ‘Crash of ‘09? Will Be Worst Ever", and portends of more radical financial shenanigans — bailouts, stimulus packages, etc. — coming out of Washington, D.C.

Commercial Real Estate Musical Chairs Mike Mish Shedlock Oct 16, 2009 9:15 am New chairs keep being added, but fewer people are playing. Commercial real-estate vacancies hit nearly 25% in the Phoenix Valley area. Scottsdale and Southeast Valley vacancies are even higher. Consider Office vacancy rates in Valley hit record. Nearly one out of every four square feet of Valley office space was vacant in the third quarter ending September 30, commercial-real-estate experts said. That's about 28 million square feet of empty space, according to Phoenix commercial-realty brokerage Colliers International, one of several Valley firms tracking the progress of sales...

New data suggest that foreclosures are rising in more expensive housing markets. About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now account for 35% of foreclosures, down from 55% in 2006. The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all...

Kevin's homebuilding business collapsed in the recession, and they couldn't pay the mortgage. Their bank, JPMorgan Chase, rejected the Martins' request for a mortgage modification and took legal possession of the house Aug. 19. On their anniversary two days later, the Martins and their two young children moved in with Kevin's aunt in her small condominium in Charbonneau. They're broke, unemployed and visibly stunned at their rapid plunge from the middle class to the newly poor. A bomb of debt vaporized the Martins' once-comfortable life. The heavy load of leverage they had assumed in hopes of grabbing their piece of...

S&P: Dubai Is Nearly Out Of Cash Joe WeisenthalOct. 11, 2009, 12:07 PM Don't assume that the economic comeback means Dubai is out of the woods. Holders of its debt may be in trouble, unless the Emirate can raise more money. DUBAI, United Arab Emirates (AP) — An analyst at credit rating firm Standard & Poor's says Dubai has "insufficient" funds to pay back billions of dollars worth of debt coming due, putting added pressure on the city-state to raise additional cash. Farouk Soussa, S&P's head of Middle East government ratings, said Sunday that the sheikdom has about $4 billion...

Americans Still Delusional About House Prices Henry BlodgetOct. 11, 2009, 9:09 AM The recent upturn in house prices from April to July (3.6%) is the sharpest change in direction professor Robert Shiller has ever seen. It could signal a v-shaped recovery in house prices. Or it could be the "mother of all head fakes," as investor Whitney Tilson has described it. Robert Shiller's recent survey of attitudes about house prices suggests it's probably the latter. The survey also suggests that Americans are still delusional about the long-term trajectory for house prices.[snip]

The vacancy rate for rental apartments in the U.S. is now 7.8% and climbing, says the Wall Street Journal. This is the highest vacancy rate in 23 years. Worse, the vacancy rate is expected to keep climbing through the winter, ultimately hitting the highest rate on record. This is good news for renters and bad news for landlords. It's also bad news for anyone who owns and would like to sell a house. Why are rising rental vacancies bad news for homeowners? Because rising vacancies put pressure on rents, as landlords have to cut prices to woo a smaller pool...

Troubled homeowners may be losing a major lifeline: so-called short sales. To get bad loans off their books and spur home sales, lenders have been forgiving the difference between the outstanding mortgage balance and the purchase price. Banks were never eager participants in short sales, and now financial firms—even those that can offload losses to the government—are balking at such transactions. Some lenders are forcing the sellers to pay extra money at closing. Others want a promissory note for part of the amount due. The situation could be a setback for the already wobbly housing recovery. A record one-third of...

For those who have studied most closely the decades of Charlie Rangel’s financial tangles and fiscal subterfuge, one doggedly puzzling question overshadows all the rest. How does Rangel have so much money and where did it come from? This is a man who draws a salary from the government of about $175,000 a year. It’s a comfortable salary, but it certainly isn’t going to make anybody this rich — especially someone living in one of the world’s most expensive cities. Rangel did not inherit a fortune and did not marry one. And nor had he built some huge fortune before...

Declining home values have put a serious squeeze on one of the mortgage market's most popular and fastest-growing financing concepts: the Federal Housing Administration's reverse-mortgage program for senior citizens 62 or older. In a letter to reverse-mortgage lenders on Sept. 23, FHA Commissioner David H. Stevens said his agency must reduce the maximum amounts that senior citizens can receive on reverse mortgages because the program faced an estimated budgetary shortfall of $798 million in the fiscal year that began Thursday. Mortgage industry sources said the move amounts to a 10 percent cutback for all new applicants for FHA reverse mortgages....

>>>People who default strategically and lose their houses appear to understand the consequences of what they're doing. Piyush Tantia, an Oliver Wyman partner and a principal researcher on the study, said strategic defaulters "are clearly sophisticated," based on the patterns of selective payments observable in their credit files. For example, they tend not to default on home equity lines of credit until after they bail out on their main mortgages, sometimes to draw down more cash on the equity line. >>>Strategic defaulters often go straight from perfect payment histories to no mortgage payments at all. This is in stark contrast...