Continue Reading Add comment August 1st, 2008
Mortgage scammers took advantage of loopholes in New York State lending laws to defraud homeowners and lending institutions all over the state, according to a new report released Thursday.
Continue Reading Add comment August 1st, 2008
It’s easy to call a bottom to the housing slump. The tough part is getting the timing right.
Treasury Secretary Henry Paulson has made many such predictions. “All the signs I look at” show “the housing market is at or near the bottom,” Paulson said in April 2007, a few months before the credit crunch hit.
Just last month Barron’s declared that “Real-Estate Rout May Be Short-Lived.” The evidence: home prices were moving closer to incomes in high-priced markets, existing homes sales had improved somewhat and inventories of unsold homes had dipped slightly. The critics responded swiftly: “During the Bull Market of the ’90s, I used to read Barron’s for their hard edged, skeptical look at many of the excesses on Wall Street, wrote Barry Ritholtz, of The Big Picture blog. “During the past 5 years or so, that skepticism seems to be fading… The latest evidence of this is the wrong headed cover story on Housing.”
Now, a Bloomberg article is suggesting that California might be the first state to hit bottom. The article points out that sales are rising across the state for three consecutive months starting in April. And four in 10 sales were sales of foreclosed homes.
“California is having a wrenching decline in wealth, but this is a cathartic event that will lay the foundation for a recovery,” said Mark Zandi, chief economist at Moody’s Economy.com told Bloomberg. “This signals the beginning of the end.”
I’m skeptical that California is out of the woods. It’s true that lower home prices have made some markets more attractive and more affordable for first-time buyers. But it will take some time for California to work through the overhang of unsold homes and sales of foreclosures have a way of pushing down prices, which, in turn, brings more foreclosures. And we shouldn’t forget California’s next potential crisis: option ARMs.
About half of option ARMs are concentrated in California and they’re expected to start resetting in high numbers next spring.
I’d love to hear what you think about this prediction. And do you have any predictions of your own?
Continue Reading Add comment August 1st, 2008
Former Fed Chief Alan Greenspan sent the stock market into a tailspin this week after declaring home prices were “nowhere near the bottom.” Just a month ago Greenspan said: “The worst is over in the financial crisis or will be very soon.”
Keep in mind that this is also the guy who, during the mid-point of the housing bubble in 2004, declared: “American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.” That one sentence gave blessing to the wave of toxic mortgages the world is digging itself out from under today.
I have my own emperor has no clothes story about Greenspan. In 1994 I attended a private briefing with the then Fed Chairman. I asked him what he thought of Mexico’s then booming economy. He said in his own obtuse way that Mexico was in great shape and had a very bright future. The very next week the peso collapsed in an entirely federal reserve driven/monetary policy failure. Greenspan & Co. were forced to come rescue the country.
So much for oracles.
Continue Reading Add comment August 1st, 2008
Morgans Hotel Group Co. issued a statement regarding the announcement by Boyd Gaming Corp. that it will delay the entire Echelon project due to the difficult environment surrounding today’s capital markets and current economic conditions. Read more »
Continue Reading Add comment August 1st, 2008
The 306,000-square-foot Northgate North Shopping Center on Northgate Highway in Seattle has just been refinanced to the tune of $26.7 million. Read more »
Continue Reading Add comment August 1st, 2008
Ownership of a 68,000-square-foot grocery-anchored shopping center five miles from San Diego in National City has changed hands. Read more »
Continue Reading Add comment August 1st, 2008
Plans for the development of 9900 Wilshire, an über-upscale condominium project in Beverly Hills, are moving forward now that developer Project Lotus L.L.C. has awarded Rudolph and Sletten Inc. the preconstruction services contract for the long-awaited endeavor. Project Lotus, a joint venture involving CPC Group and Kaupthing HF, will build the 235-unit green residential project on an eight-acre parcel that the team snapped up for $500 million in 2007. Read more »
Continue Reading Add comment August 1st, 2008
High Street Equity Advisors has invested $70.5 million in acquisitions in Pennsylvania. The Boston-based firm purchased 18 light industrial and R&D Flex buildings in two Pennsylvania portfolios, Lehigh Valley and Bucks County. Read more »
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