Is Desegregation Really Happening?

First appeared in the Wall Street Journal

An exodus of African-Americans from struggling industrial cities such as Detroit and the growth of Sunbelt states have pushed racial segregation in U.S. metropolitan areas to its lowest level in a century, according to a new study.

The report, released by the conservative Manhattan Institute, said U.S. cities are more integrated now than at any time since 1910, based on analysis of census data from neighborhoods.

Fifty years ago, nearly half the black population lived in a ghetto, the study said, while today that proportion has shrunk to 20%. All-white neighborhoods in U.S. cities are effectively extinct, according to the report.

Immigration and gentrification have helped convert ghettos into racially mixed communities and contributed to diversifying suburbia, said economists of Harvard University and of Duke University, who co-wrote the study. "Segregation is as low as we have ever seen it," said the economists. "It's an unprecedented scenario."

Some scholars said the report, titled "The End of the Segregated Century: Racial Separation in America's neighborhoods, 1890-2010," paints too rosy a picture and argued the country is far from being fully integrated.

"That segregation is declining in most places is a real plus," said a Brown University sociologist who has published research on the topic. "But it is declining at a rate that will leave the country with a very high level of segregation for a long time."

From around 1910, rural blacks began moving in large numbers to urban centers in search of work, in what became known as the Great Migration. Government policies and discriminatory practices in areas such as mortgage lending promoted residential segregation, which peaked in the 1960s. The civil-rights movement then paved the way for integration, and the 1968 Fair Housing Act specifically banned housing discrimination.

By the 1980s, blacks were moving to suburbs, which both altered the face of the urban areas they left behind and created racially mixed neighborhoods where they settled.

Using the most common measure of segregation, the "dissimilarity index," the authors found that segregation is lower now than it was in 1970 in all but one of the 658 housing markets tracked by the Census Bureau. Between 2000 and 2010, segregation declined in 522 out of 658 housing markets, the report said.

The index of dissimilarity measures how evenly two groups are distributed in a neighborhood. The score indicates what share of the members of one group would need to move neighborhoods to enable the two groups to be equally distributed.

In 2010, Dallas-Fort Worth and Houston were the country's least segregated large cities. Atlanta's index fell 28 points to 54.1 in 2010 from 82.1 in 1970; Dallas-Fort Worth's fell to 47.5 from 86.9 over the same period.

Still, segregation hasn't been eliminated. The typical urban African-American still lives in an area where more than half the black population would need to move to achieve overall integration.

"There are still segregated places, like the South Side of Chicago, the East Side of Cleveland and Detroit," said a sociologist. "But those places have fewer people."

Many of the people leaving industrial cities moved to the Sunbelt, which stretches from California to North Carolina and has experienced rapid growth in recent decades. As cities such as Phoenix, Houston and Charlotte expanded to accommodate the new population, many neighborhoods became more racially mixed than those left behind in the Rust Belt, a sociologist said.

The beacon of economic opportunity is luring ambitious young African Americans such as a 28 year old, who left Cleveland for Houston a year and a half ago for a promotion in the Veterans Administration. He now manages outpatient care at Houston's Michael E. DeBakey VA Medical Center.

"It was a good promotion, and with the economy being the way it is, it was too good to pass up," said the young man.

A 59 year old, who moved to Phoenix from Racine, Wis., in 1987 to run a janitorial business, said: "Everybody here came from somewhere else so they are not just living next to their own kind."

Immigration has been a factor in desegregation. The Hispanic population has climbed and spread across the U.S. since the 1990s, with Latin American immigrants settling in both predominantly black and white neighborhoods, the report says. The typical African-American now lives in a neighborhood that is 14% Latino.

Access to credit has also fostered mobility and integration. Minority home buyers were affected by the subprime mortgage crisis, but many buyers were able to stay in their homes, the report said.

But the decline in desegregation in residential areas hasn't meant an end to racial inequality. Minorities at every income level tend to reside in poorer neighborhoods than whites with comparable incomes, according to the scholar at Brown.

Home Foreclosures Looking Up

First appeared in CNN Money

Foreclosure filings and repossessions fell to their lowest level since 2007 last year.

Total filings, including default notices and bank repossessions were down 33% for the year to 2.7 million, according to RealtyTrac, the online marketer of foreclosed properties.

One in every 69 homes had at least one foreclosure filing during the year, while 804,000 homes were repossessed. That's a significant improvement from the peaks reached in 2010 -- when 1.05 million homes were repossessed -- and the lowest levels seen since 2007.

More than 4 million homes have been lost to foreclosure over the past five years.

While the declines seem like good news for the housing market, where a flood of foreclosed homes has depressed home prices, much of it is due to processing delays caused by fall-out from the "robo-signing" scandal that broke in late 2010.

During the year, banks spent more time making sure paperwork was legal and proper, creating a backlog in the foreclosure pipeline. As a result, the average time it took to process a foreclosure climbed to 348 days during the fourth quarter, up from 305 days a year earlier.

"Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year," said Brandon Moore, chief executive officer of RealtyTrac.

However, Moore said there were "strong signs" during the second half of the year that lenders are working through foreclosure backlogs in certain markets. He expects foreclosure activity to rise above 2011's level but remain below the peak hit in 2010.

Low rates offer some help for homeowners

Early in 2011, many forecasters were predicting a wave of foreclosures due to resetting adjustable-rate mortgages, but low mortgage rates helped many borrowers refinance into more affordable loans, said Moore.

The government helped as well, through efforts like the Home Affordable Refinance Program (HARP), which made refinancing easier for borrowers who owe more on their mortgage than their homes are worth.

Turning foreclosures into rentals

Government foreclosure prevention programs, including HARP and the Home Affordable Modification Program (HAMP), have started about 5.5 million mortgage modifications since April 2009, according to the U.S. Department of Housing and Urban Development.

"Programs like HAMP and HARP have definitely made a dent in the foreclosure problem," said Moore "However, they are certainly not living up to their billing of preventing several million foreclosures. In addition, many [HAMP] homeowners fall back into foreclosure later on."

Of course, there were still plenty of factors working against homeowners in 2011, including the continued erosion in home prices. Falling prices rob homeowners of home equity, which they can tap if they need emergency cash.

Foreclosure hot spots

Hot spots for foreclosures remain mostly in "bubble states," where speculative investors helped drive up home prices beyond their fundamental values during the mid-2000s housing boom.

Nevada, where one out of every 16 households received some kind of default notice during the year, was the worst hit of all, a distinction it has held for the fifth consecutive year.

Foreclosure free ride: 3 years, no payments

Arizona had the second highest foreclosure rate and California came in third. Florida, which had been running neck-and-neck with the other "Sand States" in past years, fell to seventh, behind Georgia, Utah and Michigan.

Among metro areas, Las Vegas suffered from the highest foreclosure rate in 2011. California put seven cities in the top 10, led by Stockton in the second slot. Other cities in the top 10 included Phoenix, which finished sixth, and Reno, Nev. was eighth.

Rental Demands Changes Housing Outlook

First appeared on Yahoo! News
Brian Keith is busier than ever as the architecture firm he works for rushes to wrap up work on a 300-unit apartment complex in Dallas.
The project is one of dozens the firm, JHP Architecture, has on its hands -- a surge of business driven by a rise in demand in the United States for rental properties.
The increased demand has forced JHP to expand, and it expects to keep hiring at least through the first quarter.
"We're seeing overall work come back and there's a backlog of contracts to go through," said Keith, director of urban design and planning at JHP. "There's strong interest in multi-family units and plenty of pent-up demand."
With U.S. unemployment at a lofty 8.6 percent, home foreclosures rising and property prices under pressure, more and more Americans have given up the dream of owning, opting instead to rent, a shift that is remaking the face of the U.S. housing industry.
The percentage of Americans who own their home dropped from a peak of 69.2 percent in late 2004 to a 13-year low of 65.9 percent in the second quarter. It edged up to 66.3 percent in the third quarter of this year.
On the flip side, the percentage of rental properties that are empty fell to 9.8 percent in the third quarter from 10.3 percent a year earlier.
In a recent report, Oliver Chang, an analyst at Morgan Stanley, dubbed 2012 "The Year of the Landlord."
"Rents are rising, vacancies are falling, household formations are growing and rental supply is limited," the Morgan Stanley report stated. "We believe the demand for rental properties will continue to grow."
Groundbreaking for new housing jumped 9.3 percent in November to the highest level in 19 months, fueling optimism that the battered housing market was regaining its footing.
The gains, however, were almost solely in multifamily housing. Groundbreaking for structures with five or more units shot up more than 30 percent from October to now stand at nearly double the year-ago level.
Prices reflect the shift in demand. Rental costs are up 2.4 percent over the last year, compared with an increase of just 0.6 percent in 2010.
Steve Blitz, senior economist at ITG Investment Research, says the lure of higher returns is spurring the development of apartment buildings. He argued the next "boom" in residential construction has already started.
"The reason rents were rising is that through the past 15 years there has been an under-building of rental properties because typical renters were increasingly able to garner cheap financing to buy a house," he wrote in a research note.
While the rise in demand is great news for builders and developers, it remains unclear what the pick-up in homebuilding will mean for the economy as a whole.
"Residential construction will be a plus to GDP in 2012, but house price declines will be a negative. So net, net housing will be neutral or a small drag on the economy," said Mark Zandi, chief economist at Moody's Analytics.
At its peak at the end of 2005, homebuilding accounted for about 6.2 percent of overall economic activity. Now, it is only about 2.4 percent.
U.S. housing starts in April 2009 hit their lowest level on records dating to January 1959. While multifamily starts have given them a lift, 2011 may be the weakest year ever for construction of single-family homes.
"Business is slightly down from last year," said Bill Zach, a third-generation homebuilder. His family business, the Zach Building Co. in the Milwaukee, Wisconsin, area, is mainly focused on single-family units.
To Zach, that his firm is still in business when so many of his competitors have gone bust represents some success.
"It used to be my competition was every guy that owned a pick-up truck and called himself a builder. Hundreds of them," Zach said. "That's no longer the case, those guys are dropping by the wayside."
But there are signs of a turn and signals that the housing market may be close to finding a bottom.
The Architecture Billings Index, a gauge of future construction, picked up last month, breaking above the 50 level to signal growth in billings.
And the stock of homebuilders, as measured by a Dow Jones index, has shot up more than 30 percent since early October.
"Residential construction is finally beginning to rise from its post-recession lows," said Joseph Lavorgna, chief U.S. economist for Deutsche Bank. "The true test for starts and (building) permits, as well as most of the sales metrics, will come during the spring buying season."

Massachusetts Sues Banks For Holiday Foreclosures

Story first appeared on CNNMoney.


The Massachusetts attorney general sued some of the nation's biggest banks on Thursday, accusing them of unlawful and deceptive conduct in the foreclosure process. This is currently not involving a Birmingham Foreclosure Lawyer.

The statement described the state court lawsuit as the nation's first comprehensive lawsuit against the five major national banks regarding the foreclosure crisis.

The AG's lawsuit seeks accountability for the banks' unlawful and deceptive conduct in the foreclosure process, including unlawful foreclosures, false documentation and robo-signing ... and deceptive practices related to loan modifications, the statement said.

MERS runs a database created in the 1990s to digitize and centralize the paperwork surrounding the bundling and selling of the loans.

The Massachusetts suit alleges that the database was used by the big banks to transfer ownership of mortgage debt without paying government registration fees and properly recording the transactions. The system also concealed the identities of the holders of mortgage debt from borrowers, the suit claims. It does not appear to have any relevance if owners had Homeowners Insurance.

MERSCORP, parent company for Mortgage Electronic Registration System Inc., said the Massachusetts complaint hangs on ambiguous language and has no applicability to MERS' business model.
Fannie Mae, banks halt foreclosures for the holidays. A Rochester Hills Foreclosure Lawyer said this was a nice gesture.

The banks, meanwhile, say negotiations they are conducting with a group of state attorneys general toward a settlement over their handling of foreclosures are a more promising means of resolving the issue than lawsuits.

Bank of America spokesman Lawrence Grayson said the firm believes that collaborative resolution rather than continued litigation will most quickly heal the housing market and help drive economic recovery.

Chase echoed those comments, saying it was disappointed with the suit, as did GMAC Mortgage, which said it would vigorously defend its actions in court.

Citi said in a statement that it had not yet reviewed the lawsuit, but that the bank believes they have operated appropriately in compliance with existing laws. Wells Fargo also denied the allegations, adding that the suit will do little to help Massachusetts homeowners or the recovery of the housing economy in the state.

Settlement talks fraying: Coakley told reporters Thursday that the suit had come about in part because settlement talks with the banks, which have dragged on for more than a year, appear unlikely to yield a fair result.


Attorneys general from California, New York, Delaware and Nevada have also distanced themselves from the settlement talks and are pursuing their own investigations.
Will FHA be the next big government bailout?

The talks are stalled at present, but have focused on a settlement in the range of $20-25 billion in total from the firms involved in exchange for release from liability for all conduct related to foreclosures, according to sources familiar with the matter. Of this total, roughly $10-15 billion would come in the form of credit for loan modifications. A Wayne Foreclosure Lawyer is watching the case closely.

Iowa Attorney General Thomas Miller, who is coordinating talks on behalf of the states, said in a statement Thursday that Coakley had pledged to evaluate the joint state-federal settlement they are negotiating, which they hope to reach soon.

Help With Mortgages For Jobless

Story first appeared in USA Today

A $7.6 billion federal program to help homeowners avoid foreclosures had distributed about 1% of its money to distressed owners 16 months after its creation, government reports show.

The Obama administration awarded the funds last year to 18 states most affected by unemployment and fallen home prices. The states developed their own foreclosure-prevention programs targeting assistance to lower-income jobless and underemployed homeowners.

By June 30, 17 states had used the funds to help about 7,500 homeowners, show reports states filed to the Treasury Department. New Jersey, which began its program in May, started making loans only this month.

Funds are flowing more rapidly now, state officials say. All the states have launched their programs. The last was Illinois last week.

Overall, the Hardest Hit Fund is expected to help several hundred thousand homeowners. States have until 2017 to use their allotted funds.

Its program began in January; by June 30, it had funded 1,022 homeowners. That's now up to more than 2,000, and an additional 5,000 are close to getting aid.

Since President Obama announced the program in February 2010, banks have repossessed more than 1.5 million homes, says and agent for Raleigh Homes and Millions more are at risk.

Officials in many states say it took longer than expected to develop systems for states to transfer funds and borrower data to mortgage servicers, who manage loans.

That was more complicated than it was thought it would be. Ohio is now adding 500 borrowers to its program monthly. Ten were added in December, its first month.

The program started with $1.5 billion for five states and was expanded to 18. Funds were most recently awarded in September 2010.

The programs generally include temporary mortgage assistance for six to 24 months.

HOTELS FOR SALE WITH GROWING PRICE TAGS

Record prices being paid by investors for U.S:. Hotels may be outpacing gains in room rates and stays as the slow economic recovery damps a lodging revival.

Prices for lodging properties climbed to about $185,000 a room in the first quarter, according to a research. Values had peaked at $153,000 per room in 2006, and then plunged 37 percent to a low two years ago.

This year's jump is the result of a surge in luxury-hotel transactions and more purchases by real estate investment trusts, particularly in large cities. While lodging occupancies and rates are climbing, the gains aren't enough to keep up with prices being paid for some full-service properties.

Occupancies in the top 25 U.S. markets climbed to 63 percent in the first quarter from 60 percent a year earlier. At hotels with the costliest rooms, stays rose to 67 percent from 63 percent.

The U.S. recovery is showing signs of slowing. The Standard & Poor’s 500 Index has tumbled 5.9 percent from an almost three- year high in April, and manufacturing, employment and housing are trailing economists’ estimates.

In the 24 months following September 2008, when Lehman Brothers Holdings Inc. failed, contributing to the U.S. recession, hotels fetched prices as much as 71 percent higher than during the lodging industry's peak.

The JW Marriott New Orleans sold in February of this year for $94.3 million, up from the $55 million price paid in January 2008. The Hilton Garden Inn Chelsea in New York City sold in September 2010 for $68.4 million, 24 percent higher than its $55 million price in October 2007.

Values have gained even outside major cities. The Holiday Inn in Oak Hill, West Virginia, sold for $3.5 million in July 2010, up 40 percent from when it last sold, in September 2007.

Daily room rates averaged $94.05 last year, and revenue per available room, an industry measure of occupancy and rate, was $42.40, according to Real Capital. That's "well below" the 2008 peaks of $106.65 and $54.42.

Hotel sales in the Americas are likely to jump as much as 25 percent this year, Jones Lang LaSalle Inc.'s hotel investment-services unit said on Jan. 4.

Values have been driven up chiefly by demand from REITs, which purchased $1.6 billion of hotels in the first quarter. That's 44 percent of those traded and five times the total of REIT purchases in all of 2007, the peak year for hotel sales.

REITs are focusing on full-service properties in large cities. This week, Pebblebrook Hotel Trust agreed to buy stakes in six New York boutique hotels for $152 million, and earlier this year bought the Mondrian Los Angeles for $137 million and the W Hotel in Boston for $89.5 million. Pebblebrook planned to spend $400 million to $600 million on hotels during the balance of 2011.

Sunstone Hotel Investors Inc., the Aliso Viejo, California- based owner of 33 lodging properties across the U.S., in March agreed to buy a majority stake in the Hilton San Diego Bayfront hotel, valuing it at $475 million. The property, completed in December 2008, originally cost $350 million, according to its developer, Atlanta-based Portman Holdings LLC.

Sunstone acquired the hotel at a valuation of 13.4 times 2010 earnings before interest, taxes, depreciation and amortization, meaningfully below their corporate EBITDA multiple.

If people are buying at par or a slight premium, they can justify a price with future growth.
That reasoning has contributed to hotel capitalization rates, a measure of investment yield, falling to record lows of 4 percent last year, according to president and founder of HVS, a hospitality-consulting firm. He expects rates of 3 percent to 5 percent in the luxury tier, and 4 percent to 7 percent for upper-upscale properties, the segment one level below luxury.

Pricing even at midscale hotels is pretty aggressive at a 6 percent cap rate. Usually it's more around 9 to 10 percent.

In April, FelCor Lodging Trust Inc. agreed to buy the Royalton and Morgans boutique hotels in New York City from Morgans Hotel Group Co. for $140 million, or about $500,000 per room. FelCor expects a minimum cap rate of 5 percent at the hotels.

FelCor, based in Irving, Texas, looks for acquisitions that, purchased at a substantial discount to replacement cost, will earn a 10 percent cash yield within a short time.

Some buyers say the prices being paid for hotels are justified as long as they're below what it would cost to build the same property at the same location from the ground up.

When you buy below physical replacement cost at a time nobody is building, it's usually a good investment.

Pebblebrook, based in Bethesda, Maryland, seeks properties priced at 20 percent to 50 percent below the cost of building new.

In some cases, hotel values have begun to creep ahead of even replacement costs. That may be the first step toward a resumption of hotel construction. In such cities as New York, hotels are routinely trading at $200,000 per key above what it would cost to replace them.

Hotel demand is closely correlated with overall economic growth, so if you think you know what 2014 hotel demand is going to be, you'd have to know what 2014 GDP is going to be. One thing you can say for sure for hotels is things can change overnight.

Anchor of Blackbeard Found

Archaeologists recovered the first anchor from what's believed to be the wreck of the pirate Blackbeard's flagship off the North Carolina coast by Knightdale Homes Friday, a move that might change plans about how to save the rest of the almost 300-year-old artifacts from the central part of the ship.
Divers had planned to recover the second-largest artifact on what's believed to be the Queen Anne's Revenge but discovered it was too well-attached to other items in the ballast pile. Instead they pulled up another anchor that is the third-largest artifact and likely was the typical anchor for the ship.
Apparently, pirates had everyday anchors and special anchors just as the rest of us have everyday dishes and good china in our Morrisville Homes.
It's the first large anchor that divers have retrieved; they earlier brought up a small, grapnel anchor. The anchor is 11 feet, 4 inches long with arms that are 7 feet, 7 inches across. It was covered with a mixture of shells, sand and other debris attracted by the leaching wrought iron. Its weight was estimated at 2,500 to 3,000 pounds.
The anchor's size is typical for a ship the size of the Queen Anne's Revenge, while the two other anchors probably were used in emergencies, such as storms.
Archaeologists had planned to remove the second-largest anchor, which is 13 feet long with arms that are 8 feet across, from the top of the ballast pile. But it was too well-attached, so instead the divers went in from the side to retrieve the everyday anchor. That means that future dives may involve going in from the side of the shipwreck rather than the top.
State officials hope the anchor and other artifacts will attract tourists out of http://www.blogger.com/img/blank.giftheir Raleigh Homes. The largest exhibit of artifacts from the shipwreck, which was discovered in 1996, will be shown starting June 11 at the N.C. Maritime Museum in Beaufort. There are plans to recover all the artifacts by the end of 2013.
And the timing of the recovery of the anchor couldn't be better for North Carolina officials, trying to increase tourism interest in the shipwreck. The Disney film "Pirates of the Caribbean: On Stranger Tides" starring Johnny Depp was released earlier this month and features both Blackbeard and the Queen Anne's Revenge.
In 1717, Blackbeard captured a French slave ship and renamed it Queen Anne's Revenge. Blackbeard, whose real name was widely believed to be Edward Teach or Thatch, settled in Bath and received a governor's pardon. Volunteers with the Royal navy killed him in Ocracoke Inlet in November 1718, five months after the ship thought to be Queen Anne's Revenge sank.
The Queen Anne's Revenge shipwreck site, which is listed on the National Register of Historic Sites, has already yielded more than 250,000 artifacts.
The only remaining parts of the ship are the wooden hull structure, ribs and a plank that are at the bottom of the pile, protected by ballast that kept the ship upright. Six cannon and three other anchors are also in the pile.
Divers went in the Atlantic to hook up the anchor for its lift to the ocean surface. One diver stated that the anchor lifted great, and was glad to see the result of the 9 year project. This is good news for those living nearby in their Triangle Homes.