Home Prices Slip On Oil Slide
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January 13, 2016
Home Prices Slip On Oil Slide
This can’t be good for the housing markets in energy-producing states like Texas and North Dakota.
Crude oil has fallen below $30 a barrel, that’s a 12-year low, extending a relentless selloff that has wiped almost 20 percent off prices this year amid deepening concerns.
Home sales are reported down sharply in North Dakota and the West Texas cities of Midland and Odessa. Home sales have also slowed in El Paso, and, more recently, in Houston.
“After years of growth, the city of Houston is on a ‘watch list’ of sorts as mortgage companies and mortgage insurers reassess housing prices and area unemployment,” says the Collingwood Group Vice Chairman Brian Montgomery, “No panic button mind you, just a reassessment.”
Oil Traders have all but given up attempting to predict where the new-year rout will end, with momentum-driven dealing and overwhelmingly bearish sentiment engulfing the market. Some analysts warned of $20 a barrel; Standard Chartered said fund selling may not relent until it reaches $10.
By Tuesday, the crash had become almost self-fulfilling, with speculators too afraid to buy for fear of being burned by another false bottom.
“While Houston got religion of sorts following the 1980s energy boom/bust cycles, the city is still the ‘energy capital of the world,” says Montgomery, “I don’t envision a remake of the 1980s, but if I were moving there, I‘d pay very close attention to recent housing price patterns, comparable market sales, and current monthly inventory levels – I suspect they’ll be somewhat volatile for the foreseeable future.”
Clearly the economies of other energy states will be hurt and the bottom could drop out of the housing markets there.
“Either way,” adds Montgomery, “It is a slowdown.
Will More Jobs Mean More Home Sales?
Americans haven’t been as confident in their chances of finding another job since the Great Recession was just taking hold.
The number of job openings rose to 5.43 million in November, the Labor Department said Tuesday, up from 5.35 million in October.
Hires rose to 5.2 million from 5.17 million. And voluntary quits rose to 2.83 million, the highest since early 2008.
Hires are down a bit from cycle highs notched last December, while openings hit an all-time high of 5.7 million in July. But both have been on relatively steady upward trends since.
That’s all good news for the economy. Stronger levels of job openings without a corresponding pickup in hires could indicate there’s some reason employers aren’t hiring, such as a skills gap.
More quits are also a sign that the balance of power is tipping more toward workers: more jobs are likely available, and workers know it.
It’s taking longer for wage gains to show up in economic data than most analysts had expected in the current business cycle, but there are some signs it’s picking up. Wages are up 2.5% over the past 12 months, a six-and-a-half-year high, but that growth is lower than in earlier expansions.
read more: http://www.marketwatch.com/story/workers-confidence-in-jobs-market-highest-since-the-start-of-the-recession-2016-01-12
DS News: Amid Optimism for America, Obama Fails to Mention Housing Policy
In his final State of the Union Address Tuesday night, President Barack Obama spoke of the progress the country has made economically and the programs he believes the country needs to embrace in the years to come in order to make more progress.
To close his speech, President Obama boldly declared that “The State of the Union is strong” as his second term winds down. While the president did briefly mention the financial crisis during Tuesday’s speech, however, one crucial element of economic recovery was noticeably absent from his speech—housing policy.
After barely glossing over it in last year’s speech, when he mentioned only the then-recent reduction in FHA mortgage insurance premiums, President Obama did not mention housing policy at all in Tuesday night’s address, nor did he even approach the subjects of homeownership, mortgage credit availability, or building wealth through home equity, which has been touted as a key to saving for the future.
The president did touch on economic and job growth early in the hour-long speech, saying that “The United States of America, right now, has the strongest, most durable economy in the world. We’re in the middle of the longest streak of private-sector job creation in history. More than 14 million new jobs; the strongest two years of job growth since the ’90s; an unemployment rate cut in half.”
read more: http://www.dsnews.com/headline/01-12-2016/amid-optimism-for-america-obama-fails-to-mention-housing-policy
Inside Mortgage Finance: Nonbank Share of GSE Business Approaching the 50 Percent Mark
Nonbank lenders accounted for nearly half 48.7 percent of the single-family mortgages securitized by Fannie Mae and Freddie Mac during the fourth quarter of 2015, according to a new Inside The GSEs analysis of mortgage-backed securities disclosures.
The nonbank share of new GSE business has been on a steady march higher over the past few years as the top tier of depository institutions has repositioned their mortgage strategies and more lenders have participated directly in the securitization process.
Back in 2013, nonbanks accounted for just 31.0 percent of new Fannie/Freddie business.
read more: www.insidemortgagefinance.com/imfnews/1_767/daily/nonbank-market-share-of-gse-mbs-close-to-50-percent-now-1000035129-1.html?ET=imfpubs:e7275:63041a:&st=email&s=imfnews
MReport: TRID is Chaos, Right? Not So Fast
The introduction of the TILA-RESPA Integrated Disclosure rule, or TRID, in October has led to utter chaos in the mortgage industry—or so some would have you believe.
Matthew Pointon, a property economist at Capital Economics, however, begs to differ. In fact, any disruption generated by TRID, he says, has been on the sales side, not the consumer side, and will be short-lived at best.
TRID rules are meant to give homebuyers more information with which to vet lenders and compare the cost of mortgages more effectively. Borrowers are also given more time. The new rules require lenders to provide estimates of all the costs of a mortgage to customers three days prior to closing.
“According to some lenders, the change has led to more market turmoil than the financial crisis,” Pointon says. “By contrast, the head of the Consumer Financial Protection Bureau has claimed the implementation of TRID is going smoothly.”
So who’s right?
Well, there was some disruption in the run-up to the launch of the new rules. Mortgage applications spiked the week before TRID became official and then crashed the week after. But the new rules, Pointon says, have no direct bearing on the cost of credit or its availability. Further, he says, applications for home purchase in December reached their highest level in almost six years.
TRID has, however, disrupted the sales process a bit. “There are three main measures,” Pointn says. “Existing sales, new sales, and pending sales. Both new and pending sales have shown no significant movement since October.”
read more: http://www.themreport.com/news/data/01-12-2016/trid-is-chaos-right-not-s
WCVB TV: GE considering moving headquarters to Boston from Connecticut
General Electric is expected to make a decision soon about whether the company’s headquarters will be moved out of Connecticut. GE has made no final decision but NewsCenter 5 has learned two cities in contention are Boston and New York.
If the move to Boston occurs, GE would likely move its 700 workers at their worldwide headquarters to the Seaport District. That area is slowly becoming defined by an innovation economy.
Other aspects drawing the company to the area may be the easy access to Logan airport and the fact that 35 percent of Bostonians are 24-35.
“How close are you to closing the deal with GE?” NewsCenter 5 reporter Janet Wu asked Mayor Martin Walsh.
“Really can’t, really can’t talk about any particulars here,” he answered. “Boston is a great city, it’s a wonderful city. I think anybody would love our city and what we have to offer.”
“The ecosystem of Boston is much more manageable than a New York system or one of the other mega cities around the world,” suggested Jim Rooney, of the Greater Boston Chamber of Commerce.
Multiple sources say tax credits and property tax relief are under discussion.
read more: http://www.wcvb.com/news/ge-considering-moving-headquarters-to-boston-from-connecticut/37319730
Freddie Mac #1 In Apartment Lending
Freddie Mac says it has become the nation’s leader in multifamily lending for the first time, with $47.3 billion in loan purchase and bond guarantee volume for its Multifamily business in 2015, up from $28.3 billion the previous year.
“We thank our dedicated Seller/Servicer network and loyal borrowers for enabling us to reach this historic volume milestone,” said David Brickman, executive vice president of Freddie Mac Multifamily. “I am very proud of the Freddie Mac team who worked tirelessly all year serving and supporting the market and ensuring that we were able to achieve this significant result.
“Our financing is in every corner of the multifamily market and more diverse than ever, reaching into small balance loans, manufactured housing communities, seniors, student and government subsidized properties. We are focused on increasing the availability of mortgage capital, especially to the affordable and workforce housing sectors where demand continues to far outstrip supply.”
Of the total new business volume, approximately $17 billion was not subject to the Federal Housing Finance Agency loan purchase $30 billion cap and included certain loans for affordable housing, smaller multifamily properties, seniors housing and manufactured housing communities.
NY POST: Sundance Holdings set sights on mall shops
Robert Redford’s Sundance Holdings is going bricks and mortar in a big way after more than 25 years as mostly a catalog and e-commerce site.
The $165 million company has just five stores, but is ramping up to open as many as 150, with three in the pipeline right now, Chief Executive Matey Erdos said at the ICR investor conference here, which provides private companies exposure to Wall Street analysts and bankers.
Redford is a part-owner of the company he founded as an outgrowth of his film festival in Salt Lake City, Utah.
“We are meeting with mall developers and setting the foundation for a larger retail platform,” Erdos said, pointing to the most recent stores to open in Edina, Minn., and Dallas late last year.
read more: http://nypost.com/2016/01/11/sundance-holdings-set-sights-on-mall-shops/
FastCompany: LOVE CITI BIKE? YOU HAVE A REAL ESTATE DEVELOPER TO THANK
It would be a logical guess to believe that financial giant Citigroup owns New York City’s bike sharing system. It is, after all, called “Citi Bike,” and every Citigroup-blue bike is plastered with the bank’s branding.
But the company—which has a $111.5 million sponsorship commitment to the program—does not own it. Navigate to the Citi Bike website, and you’ll see that “Citi Bike is operated by NYC Bike Share LLC, a wholly owned subsidiary of Motivate,” and that “Motivate is a unique company focused solely on operating large-scale bike-share systems.”
This might look like an answer. But NYC Bike Share LLC is actually just the first in a nesting doll of nomenclature that—intentionally or not—obscures a brilliant business move by one of the country’s largest real estate investors.
read more: http://www.fastcompany.com/3055168/love-citi-bike-you-have-a-real-estate-developer-to-thank