Archive for September 17th, 2008
Continue Reading September 17th, 2008
Before Hurricane Ike swept through the Gulf Coast on Saturday, the Houston area’s real estate market was one of the strongest in the country. Home prices were up about 1 percent in the second quarter at a time when most major cities are seeing declines.
But the storm, which might have left about 50,000 homes uninhabitable in the Houston-Galveston-Brazoria metro area, could actually give a boost to the housing market, University of Houston Professor Barton Smith told me today.
The local job market, which has remained robust thanks to the booming energy sector, has helped to fuel the need for housing. The storm has created a shortage of homes, some of which will likely never be rebuilt, Smith said. And new home starts could drop as builders turn their attention to repairing damaged homes, he added.
“This is probably going to create a strengthening of the housing market,” Smith said. “We didn’t have a significant amount of oversupply to begin with.”
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Continue Reading September 17th, 2008
People say us reporters never write any good news. Well, there may just be some silver lining amidst all these dark clouds on Wall Street.
Gibran Nicholas, who heads a mortgage industry certification outfit called the CMPS Institute, notes that all the panic selling on the Street means banks will be far more likely to offer better mortgage terms to distressed home owners rather than foreclose on them. It also means they’ll be more willing to negotiate with any real estate buyers interested in bank-owned property.
The government taking over Fannie Mae and Freddie Mac will mean lower interest rates, in spite of the recent Fed decision to hold them steady. “These rates should remain low well into 2009 because they closely track the Fed Funds rate that is controlled by the Federal Reserve,” Nicholas says. “The Fed really has no desire to increase interest rates in the middle of credit crisis.”
Lastly, and this is a big if, Nicholas notes that the U.S. government just may come out ahead on its market interference. The $85 billion bailout of AIG is a lot of money. But the feds could be earning 11% on that loan, plus any appreciation they get from owning 80% of the world’s largest insurance company. As far-fetched as that sounds, the government made money off its early 80s bailout of Chrysler.
The time to buy, the old Wall Street saying goes, is when there is blood on the street.
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Continue Reading September 17th, 2008
Taking advantage of a traditionally underserved student housing market, independent investment manager Henderson Global Investors, based in Chicago, has acquired The Verge Apartments in Sacramento for $36 million. Read more »