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Current Course
 It is hard to believe that we are looking at Dow 10,000 only 7 months after experiencing what felt like the end of the world as we know it! You will have to talk to your Wall Street guru to try to explain that one. Whether it is sustainable is a question beyond my pay grade! From my perspective on Main Street, we haven't come nearly that far. While there are some very small signs of commercial investment activity, the credit markets, remain in a deep freeze. The anecdotal stories abound of ridiculous lending standards (as ridiculous as "no doc" loans in the loose credit hay day) being applied to the best credit risk scenarios. The scene is being played out across the spectrum, large and small businesses, real estate, consumer and business credit. While the "deleveraging" of America may be necessary and ultimately a good thing, the wheels of commerce do not turn without the grease of credit. In the meantime, is the financial sector cleansing itself of the "toxic" assets so that rational lending can resume? Currently, everyday, in every county in California (and likely in Arizona, Nevada and Florida), only about 15% of the residential properties that hit the foreclosure auction block are sold, either back to the lender (about 90% of those that sell) or to a 3rd party (only about 10% of those that sell) See chart below: CA Foreclosure Sales Volume (# 1,000s)
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Month 2009 |
Total Active Sales |
New Sale Notices |
Sold at Auction |
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April |
96 |
31 |
13 |
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May |
114 |
43 |
18 |
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June |
113 |
30 |
22 |
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July |
126 |
40 |
16 |
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August |
130 |
34 |
17 |
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September |
140 |
32 |
16 | * Source: ForeclosureRadar.com
The rest get postponed to next week or month, to be added to the next batch of new foreclosure sales. There are twice as many pending foreclosures in California today as there were a year ago. In the meantime, investors and homebuyers alike, bid up (for the time being) the pricing for the limited supply of residential properties on the open market and the real problem remains and the toxic balance sheets remain. I am an optimist by nature and I want to believe that the Great Recession is over....maybe on Wall Street but definitely not on Main Street.
-Rick Longpre
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A Historic Time to Buy
The Associated Press, Chip Cutter (10/05/2009)
Young people just starting to invest and buying their first homes are potentially the winners in this recession.
First-time homebuyers, most between the ages of 25 and 45, accounted for about 45 percent of home sales from January through July 2009, according to the National Association of REALTORS®
"This is a historic time," says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. "It's a great opportunity to make some great gains in the future." Read more...
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 Slump in Commercial Property Values May Be Nearly Over
-A report from CB Richard Ellis
The sharp drop in valuations of commercial real estate properties during the past year may be nearing a bottom, according to Los Angeles-based CB Richard Ellis Investors, in its recently released installment of "Investment Research Quarterly". Although the bid-ask gap remains wide between buyers and sellers, three indicators are providing some evidence that pricing will bottom out sooner than later.
First, the sharp pricing correction that has already taken place will continue to have a dramatic impact on sellers' expectations, the authors of the report conclude. Read more...
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Office Prices Rise for the First Time in Two Years
The sale prices of U.S. office properties rose 4.3 percent in the second quarter, the first increase since the second quarter of 2007, according to a report from ratings agency Moody's.
The second-quarter increase is significantly different from what happened in the first quarter when office prices fell 18.6 percent. Neal Elkin, president of Real Estate Analytics, said he was convinced the second-quarter increase isn't just a temporary blip.
He said the improving economy is luring investors to commercial property and persuading companies to reconsider occupancy projections as office prices start to look cheap.
Overall, Moody's said commercial property transactions in June rose by 50 percent from May and that the total transaction volume more than doubled.
Source: Financial Times, Alan Rappeport (08/20/2009) |
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 Private Investors Dominate Foreclosure Market -cnnmoney.com
Cities and municipalities are having trouble spending the money allotted by the controversial Neighborhood Stabilization Program, which was passed by Congress last year to acquire houses in blighted neighborhoods.
The goal was to buy vacant properties at 1 percent less than appraised value, rehab them, and either sell or rent the homes to low-income residents.
The stumbling block is that the houses are being purchased by private investors and more affluent home buyers at cheap prices. Read more... |
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Climbing Out of Recession
Written by Lawrence Yun, Chief Economist, NAR Research
Wednesday, 23 September 2009 00:00
September has come again, and most folks are back from vacation. Kids are back in school. Traffic (in most locales) has returned to its usual nightmarish levels. Many of us are asking ourselves "where did the summer go?"
Well, summer is not the only thing that has ended. The world-wide economic recession is also essentially over. Led by countries such as Brazil, India, and, in particular, China, the economies of the world are digging themselves out of that recessionary ditch. Many other countries appear ready to emerge from the economic doldrums just as strongly. Poland, Chile, Mexico, Turkey, South Africa, and Vietnam could all re-emerge with stronger economies in 2010. Let's hope that as these and other countries travel the upward road to recovery their leaders and policymakers face up to global challenges and opportunities that stem from laying down the necessary institutional reforms that respect private property rights and the transfer of properties. Read more....
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Treasury: Millions More Foreclosures Coming
Official says a strong housing market is crucial for the economy
WASHINGTON - Only 12 percent of U.S. homeowners eligible for loan modifications under the Obama administration's housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming, the Treasury Department said on Wednesday.
A Treasury report showed 360,165 people had their monthly payments reduced through August, up from 235,247 through July, but a senior Treasury official conceded much more must be done to soften the impact of a severe and prolonged housing crisis. Read more... |
Getting In On Foreclosures
By: Shelly K. Schwartz,
Special to CNBC.com
The growing inventory of distressed homes on the market may be sending shock waves through the economy, but it's also giving investors a wider window of opportunity.
Despite federal initiatives to stem the rising tide of foreclosures, some 358,471 foreclosure filings were reported in August, according to RealtyTrac. Such filings include default notices, auction sale notices and bank repossessions.
Over the last three years, more than 4 million U.S. homes have been sent into foreclosure. Read more.. | |
 Decline in Commercial Real Estate Sectors Appears to Be Slowing
-realtor.org
Commercial real estate activity has suffered from a severe credit crunch for commercial sectors, sustained job losses and weak consumer spending, although the decline appears to be slowing. A forward-looking indicator shows commercial real estate will remain weak into 2010, but recent actions by the Federal Reserve should improve some flow of capital into commercial lending, according to the National Association of Realtors®. Read more...
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Latitude, inc. is a full service commercial real estate company, headquartered in Santa Barbara, on California's Central Coast. While its brokerage and development services are focused on California's Central Coast, Latitude's management and investment expertise have expanded its geographical reach with experience throughout the Western United States.
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