It’s all about Green in the day ahead.
Wearing of the Green for St. Patrick’s Day
Key Spring Home-Selling Season Underway
And fall-out from the Fed with higher mortgages
Happy St. Patrick’s day from the Collingwood Group
Less Green On St. Pat’s Day: #Mortgage Loan Growth Slowing
Hopes that a stronger economy would lead to more lending and further Federal Reserve rate increases have helped push bank stocks to post-crisis highs.
But new data show loan growth is slowing instead, raising questions about whether investors’ expectations will be realized.
Banks have warned about a slowdown in mortgage lending as rates rise, and analysts have noted a cooling in credit cards and auto loans.
Bank loans across all categories are increasing 4.6% annually, the slowest pace since 2014, according to weekly Fed lending data from March 1. The trend is particularly marked in business loans, which are increasing 3.9% annually, a rate that is a nearly six-year low. A number of factors are at play, including rising interest rates; bankers also said some business clients put borrowing on hold before the U.S. election and aren’t confident enough to jump back in.
Consumer-lending gains also have cooled in recent weeks, though the 6.9% annual growth rate in this category is still relatively high compared with recent years.
read more: https://www.wsj.com/articles/fed-is-ready-to-raise-rates-but-key-bank-metric-suggests-caution-1489570204
What Does Goldman Know?
Many call them the smartest firm on the street, now the Wall Steet Journal reports Goldman Sachs has become the largest buyer of severely delinquent home loans from mortgage giant Fannie Mae over the past year and a half, acquiring nearly two-thirds of $9.6 billion in loans the agency has auctioned, government records show.
Just this week Goldman won the majority of loans at Fannie’s latest auction, its largest to date. The bank bought about 8,000 loans with unpaid balances of $1.4 billion.
The Wall Street giant’s loan-buying spree is one strange reverberation of the housing crisis. In ramping up a mortgage-buying operation that had lain low since the meltdown, Goldman is trying to make money even as it looks to fulfill terms of a government settlement that calls for it to help struggling homeowners.
Goldman was among the last of the big U.S. banks to agree to pay billions of dollars to federal and state governments for their roles packaging and selling securities in the mortgage meltdown. Its $5.1 billion pact, reached in April 2016, included $3.3 billion in fines and $1.8 billion in “consumer relief.”
That relief can include forgiving loan balances for struggling homeowners. To count toward Goldman’s $1.8 billion settlement obligation, the bank must make modifications to get the loan’s principal amount owed to be equal to or less than the value of the home itself.
Home Prices: Higher & Higher & Still Higher
Home prices rose 7.2 percent in February, which marked 60 consecutive months of annual increases since home prices bottomed in early 2012, according to Redfin.
Home sales gained a modest 1.8 percent, constrained by a continuing inventory shortage. The number of homes for sale fell 12.9 percent year over year in February, the third month in a row that inventory declined by double digits. Housing affordability pressures are increasing, especially for first-time buyers, amidst continuously increasing prices and the Federal Reserve’s recent announcement of an interest rate hike. However, rising prices may lead more homeowners to list their homes this spring.
“The total level of home equity reached a new peak at the close of 2016, according to recent Fed data,” said Redfin chief economist Nela Richardson. “While great for homeowners, continuously strong price growth across the U.S. since 2012 has posed significant challenges for first-time buyers, especially given such low supply in affordable price-tiers. There is a silver lining on the horizon, however. Rising prices and increased equity may tip the scales for homeowners who have been delaying their decision to move up, which could add much-needed starter-home inventory to the market.”
Despite affordability concerns and low inventory, February still proved to be a strong month for buyer demand. Market speed increased again, making for the fastest February Redfin recorded since 2010. The typical home that sold last month went under contract in 60 days, eight days faster than one year prior. Nearly 15 percent of all homes listed for sale in February were off the market within two weeks, up from 11.7 percent last year.
Seattle, was the fastest market, with nearly half of all homes pending sale in just 12 days, down from 13 days from a year earlier. Oakland, CA and Denver, were the next fastest markets with 15 and 18 median days on market, followed by San Jose, CA (21) and San
Rochester, NY had the largest decrease in overall inventory, falling 42.4% since last February.
Provo, UT had the highest increase in the number of homes for sale, up 30.7% year over year, followed by Knoxville, TN (21.6%) and New Orleans, LA (16.1%).
HUD Cuts in President Trump’s Budget Plan
President Trump’s budget blueprint just sent to Congress includes a $6.2 Billion cut to the Department of Housing and Urban Development, including eliminating the $3 billion Community Development Block Grant program, which funds programs like Meals on Wheels, housing assistance and other community assistance efforts.This cut represents an annual decrease of 13.2%.
The community development program has garnered bipartisan support since President Gerald Ford signed it into law in 1975. Roughly $150 billion has been allocated to a growing number of “entitlement communities” — generally larger cities and counties, as well as states, according to HUD. Today, roughly 1,200 cities, counties, and states participate.
The budget outline would funnel $54 billion in additional funding into defense programs, beef up immigration enforcement and significantly reduce the federal work force.
Apartment Building Developers Face Shortage of Construction Workers
Apartment building developers have a lot to worry about. So many new developments are under construction, they are likely to compete with each other—and not just for residents.
Developers are also competing to find construction workers to build their projects, and it comes even before President Trump’s proposed crackdown on illegal immigrants.
“A very tight construction labor market is going to get even worse,” says Bill McDonald, president and chief investment officer of Mill Creek Residential, a multifamily developer. “It could cause a meaningful ramp up in costs.”
The contractors who build apartment properties are having a hard time hiring and retaining workers on their construction projects. “Labor is incredibly difficult to find, and skilled labor… ever more so!” says V. Jay Hiemenz, president and chief operating officer for Alliance Residential, a privately held multifamily investor.
Since the housing crash the local labor market for construction workers has shrunk by almost 46 percent. “Unfortunately, and due to a number of socio-economic factors, those same folks are not re-entering the labor market,” says Hiemenz.
During the boom many of these workers may have been recent immigrants who have returned to their home countries during the recession and the slow economic recovery. Now that there are once again jobs in the construction business, it is still not a simple thing for these workers to return.
Other people who worked in the construction industry during the last boom may have moved on to other sectors, such as the fossil fuel extraction business. Now that oil prices have dropped and many “fracking” enterprises have scaled back, some of these workers may be available—though they may not be located in the right communities, where apartment developers need them the most. It will take time for contractors to rebuild their workforce.
read more: http://m.nreionline.com/multifamily/apartment-building-developers-face-shortage-construction-workers
Sixth Avenue is the new Fifth Avenue, Even as St. Patrick’s Day Parade Marches Down 5th Today
Move over, Park Avenue — Sixth Avenue is the towering king of Manhattan commercial boulevards. The under-celebrated corridor is enjoying an office-leasing boom, with a surge of first-class new development, and the healthiest retail market in town.
Big Six never got much respect. Apart from being home to Radio City Music Hall and for hosting Macy’s Thanksgiving Day Parade since 2012, its main claim to pop-culture fame (or infamy) was rock band The Wallflowers’ “Sixth Avenue Heartache,” an obscure 1996 tune about homeless people. For added insult, the video’s key scene was shot on Fifth Avenue.
But you’ve gotta see the place now — a thriving nexis of corporate and media headquarters humanized with stores, hotels, apartment buildings and funky landmarks from Franklin Street to Central Park South.
read more: http://nypost.com/2017/03/16/sixth-avenue-is-the-new-fifth-avenue/