Raleigh Real Estate Blog

Is Desegregation Really Happening?

2012-01-31T09:46:00.002-05:00

First appeared in the Wall Street Journal

An exodus of African-Americans from struggling industrialcities such as Detroit and the growth of Sunbelt states have pushed racialsegregation 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 onanalysis of census data from neighborhoods.

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

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

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

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

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

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

Using the most common measure of segregation, the"dissimilarity index," the authors found that segregation is lowernow than it was in 1970 in all but one of the 658 housing markets tracked bythe Census Bureau. Between 2000 and 2010, segregation declined in 522 out of658 housing markets, the report said.

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

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

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

"There are still segregated places, like the South Sideof 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 rapidgrowth in recent decades. As cities such as Phoenix, Houston and Charlotteexpanded to accommodate the new population, many neighborhoods became moreracially mixed than those left behind in the Rust Belt, a sociologist said.

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

"It was a good promotion, and with the economy beingthe 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., in1987 to run a janitorial business, said: "Everybody here came fromsomewhere else so they are not just living next to their own kind."

Immigration has been a factor in desegregation. The Hispanicpopulation has climbed and spread across the U.S. since the 1990s, with LatinAmerican immigrants settling in both predominantly black and whiteneighborhoods, the report says. The typical African-American now lives in a neighborhoodthat is 14% Latino.

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

But the decline in desegregation in residential areas hasn'tmeant an end to racial inequality. Minorities at every income level tend toreside in poorer neighborhoods than whites with comparable incomes, accordingto the scholar at Brown.

Home Foreclosures Looking Up

2012-01-12T13:43:00.000-05:00

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

2012-01-06T13:43:00.000-05:00

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

2011-12-09T14:30:00.002-05:00

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

2011-09-22T12:56:00.004-04:00

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

2011-06-27T15:15:00.001-04:00

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

2011-06-02T16:15:00.001-04:00

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.

TEXAS BOASTS 3 OF THE NATION’S CITIES WITH THE BEST JOB GROWTH

2011-05-13T13:27:00.001-04:00

Job growth is slowly on the rise according to analysts. Recently the annual list of “Best Cities for Jobs” was release with some surprising results. Last year the reports showed a gloomy outlook when only 13 of 397 metropolitan areas experienced any growth. For this year's list, which measured job growth in the period between January 2010 and January 2011, most of the best-performing areas experienced increases in employment increases.
Almost 400 metropolitan statistical areas are ranked based on employment data from the Bureau of Labor Statistics reported from November 1999 to January 2011. Rankings are based on recent growth trends, mid-term growth and long-term growth and momentum. The locations are also broke down by size, small, medium and large, because regional economies differ markedly due to their scale.
Reflecting the importance of the war effort in stimulating local economies, command of this year's best place for jobs was handed to the Army from the Marines. Killeen-Temple-Fort Hood, Texas, shot up to #1 from #4, while the military-based Jacksonville, N.C., last year's first-place winner dropped to 19th place.
Once again the best places for jobs tended to be smaller communities where small improvements can have a relatively large impact. Eighteen of the top 20 cities were either small (under 150,000 nonfarm jobs) or mid-sized areas (less than 450,000 jobs).
Texas, however, dominated the three size categories, with the #1 mid-sized city, El Paso (#3 overall, up 22 places from last year) and #1 large metropolitan area Austin (#6 overall), joining Killeen-Temple-Fort Hood (the #1 small city) atop their respective lists.
Texas also produced three other of the top 10 smallest regions, including energy-dominated #4 Midland, which gained 41 places overall, and #10 Odessa, whose economy jumped a remarkable 57 places. It also added two other mid-size cities to the list with #2 Corpus Christi and #4 McAllen-Edinburgh-Mission. With all this moving there has also been an increase in Truck Bed Liners.
California experience a miserable year with having zero regions in the top 150. This led to a group of California officials to Texas to learn possible lessons about what drives job creation. Gov. Jerry Brown and others in California's hierarchy have a lot to learn as, the fact is, that the city Brown formerly ran, Oakland, ranked absolute last (#65), among the big metros in the report. This is two places behind perennial also-ran #63 Detroit-Livonia-Dearborn, Mich.
One lesson that green-centric California may have trouble learning is that, however attractive the long-term promise of alternative energy, fossil fuels pay the bills and create strong economies, at least for now. Even outside of Texas, oil capitals did well across the board, not surprising given the surging price of gas. The #2 small metro, Bismarck, N.D., which also is #2 overall, is the emerging capital of the expanding Dakota energy belt. Also faring well are Alaska's two oil-fire cities, Fairbanks (#10 on the small list) and Anchorage (#3 on the medium-sized list).
There were some great improvements as well. Most welcome are signs of revival from New Orleans-Metarie, La., which moved up a stunning 46 places to capture the #2 slot among large metros. The region lost 11% of its population and nearly 16% of its jobs during the last decade. But now the Big Easy seems to be finding its place again among America's great cities. Jobs, up 3.5% since 2006, have been created by rebuilding, a resurgence of tourism and a growing immigrant population. This region’s Hispanic population grew by 35,000 over the past decade.
There were other inspirational improvements this year. Sparked by a revival in manufacturing, a host of former gloomy areas in parts of the Midwest are showing signs of definite improvement. Niles-Benton Harbor, Mich., a long-time sleeper at the bottom of the list, shot up a remarkable 242 places this year to a respectable #121. Another old industrial city, Kokomo, Ind., ascended 177 places to #215, while Holland-Grand Haven, Mich., improved by 172 places to #221 and Grand Rapids, Mich., rose 167 places to #183. Milwaukee, a long-time loser among the largest metros, moved up by a healthy 163 places overall to a better-than-average #143.
The Northeast Corridor has also made strong progress. The stimulus has been particularly good for the vibrant economies surrounding the ever-expanding federal leviathan. Among the large metros, Washington-Arlington-Alexandria, Va., did best of all the cities outside the South, repeating its #6 ranking among large metro areas. Right behind, at #7 on the large city list, sits the primarily suburban Northern Virginia metro area, while Bethesda-Rockville-Frederick, Md., ranks 12th.
The other big East Coast winners are the financial and university-oriented economies, which have reaped huge benefits from the TARP bailout and the Obama administration's college-centric stimulus plan. After the Texas cities and the imperial center, most of the best performing big metros are located in financial and university centers, including #9 New York City, #10 Philadelphia, #11 Pittsburgh, #13 Boston and #15 Raleigh-Cary, N.C, which is good news for Raleigh Real Estate.
Outside of Oakland and the big Southern California metros the biggest losers including #60 Los Angeles, #59 Sacramento, #58 Riverside-San Bernardino and #50 Santa Ana-Anaheim-Irvine. The bottom tier consisted of a motley crew of mid-South cities like Memphis (#64 on the big city list) and still-struggling, former big Sunbelt boomtowns Las Vegas (#62), West Palm Beach-Boynton Beach-Boca Raton, Fla. (#56), Ft. Lauderdale-Pompano Beach-Boynton Beach, Fla. (#54), Phoenix-Mesa-Glendale, Ariz. (#53), Atlanta-Sandy Springs-Marietta, Ga. (#52) and Tampa-St. Petersburg-Clearwater, Fla. (#51) which are leaving people asking who can Ship My Car?
For the most part, these areas rose with the housing bubble and will not fully recover until the economy diversifies beyond real estate speculation. Already some of the bubble victims are showing signs of life, including #155 Merced, Calif., up 134 places, and #167 Orlando, Fla., which rode a revived interest in tourism to jump 89 places since last year.
While energy, America's three wars, the recovering financial markets and real estate problems have played the lead role in setting the stage for the best places to do business, the Intermountain West has shown resilience with Salt Lake City, at #20 among large cities; Provo-Orem, Utah, Ogden-Clearfield, Utah, and Boulder, Colo., at Nos. 10, 25 and 26, respectively, among mid-sized cities; and Logan, Utah, and Fort Collins, Colo., at Nos. 9 and 38 among small cities.
The weak economy continues to reek havoc on new jobs, however, small increases are a good sign. California, Florida, and Nevada have had a bleak year, but improvement can still be noted. Hope is given to all with a city like New Orleans making huge strides. The next surge is expected to be in old industrial areas with newer infrastructure and appealing climates.

U.S. homes trending toward wireless-only phones

2011-04-22T11:31:00.001-04:00

While homeowners battle tough economic challenges, the trend of disappearing land lines is increasing in an number of U.S. household, according to a report from the National Center for Health Statistics.

As of June 2010, about 26.6% of households had only a wireless phone, up from 13.6% in 2007. And the number of wireless-only homes is increased in every state throughout the U.S.

Stephen Blumberg, a member of the Centers for Disease Control and Prevention's National Center for Health Statistics states that "the phrase 'home telephone number' is going the way of rotary dial phones."

The trend of more people using their cellphones more often "poses an even greater sense of urgency to conduct studies to try to determine whether there are or there are not ill effects from the use of cellphones to the brain," says Nora Volkow, director of the National Institute on Drug Abuse. "The reality is (phones are) widely utilized, and yet we have minimal information."

Lower economic status households are more likely to be wireless-only, according to the researchers, who used data and trends from tens of thousands of respondents to the National Health Interview Survey and the Census Bureau's annual American Community Survey.

"States such as Arkansas, Mississippi and Kentucky have a higher proportion of households living with low income," Blumberg added, "and giving up a land line is one way to save money."

Even if Raleigh homes have a land line, it is not necessarily used. Many are deciding to cut the cord. "All they get are solicitations, and most calls are done on a wireless phone anyway, so it represents a waste of money," says analyst Charles Golvin of Forrester Research.

The wireless-only trend among Apex homes is not likely to be reversed. "Unless the carriers are able to create some new applications or services such as video calling," Golvin says.

In North Carolina, Cary homes that rely on wireless phones are being advised to check their local emergency preparedness department to see if its "Reverse 911" communication systems can incorporate cellphones.

The trend toward wireless phones presents some difficulties for public safety officials, says Francisco Sanchez of the Harris County Homeland Security office. "But the benefit is that now we have a communications device that people carry all the time. So we need to know how to utilize that if we are going to be able to do our jobs effectively in the future."

February Shows Weak Homes Sales

2011-03-22T11:21:00.002-04:00

In February Americans purchased less previously occupied homes. The weak sales and rise in foreclosures pushed home prices down to their lowest level in nearly nine years.
The National Association of Realtors said Monday that sales of previously occupied homes fell last month to a seasonally adjusted annual rate of 4.88 million. That's down 9.6 percent from 5.4 million in January. The pace is far below the 6 million homes a year that economists say represents a healthy market.
Nearly 40 percent of the sales last month were either foreclosures or short sales, when the seller accepts less than they owe on the mortgage.
One-third of all sales were purchased in cash -- twice the rate from a year ago. In troubled housing markets such as Las Vegas and Miami, cash deals represent about half of sales.
The median sales price fell 5.2 percent to $156,100, the lowest level since April 2002.
Winter storms also hampered sales in many parts of the country, including five inches of snow in Dallas-Fort Worth area just before this year's Super Bowl. That was nearly twice the metro area's annual average.
Still, housing has been weak for some time. Millions of foreclosures have forced down home prices and more are expected this year. Tight credit has made mortgage loans tough to come by. And some potential buyers who could qualify for loans are hesitant to enter the market, worried that prices will fall further. High unemployment is also deterring buyers. Job growth, while expected to pick up this year, will not likely raise home sales to healthier levels.
The median price of a new home is now 45 percent higher than the median price for a previously occupied home, the Realtors group said. A more normal difference is about 15 percent, an indication that old homes on the market are being sold at comparatively cheap, and affordable, levels.
The number of first-time homebuyers rose to 34 percent of the market, partly because of rising rents. A more healthy level of first-time homebuyers is about 40 percent, according to the trade group.
But home prices and sales are uneven across the country. In Miami, where prices have dropped 18.6 percent since last year, sales have skyrocketed 46.4 percent over the same period. In St. Louis, where prices rose 8.2 percent over the past year, sales have fallen 8.6 percent.
One obstacle to a housing recovery is the glut of unsold homes on the market. Those numbers rose to 3.49 million units in February. It would take 8.6 months to clear them off the market at the February sales pace. Most analysts say a six-month supply represents a healthy supply of homes.
Analysts said the situation is much worse when the "shadow inventory" of homes is taken into account. These are homes that are in the early stages of the foreclosure process but have not been put on the market yet for resale. For February, sales fell in all four regions of the country, by 12.2 percent in the Midwest, 10.2 percent in the South, 8 percent in the West and 7.2 percent in the Northeast.
Sales of single-family homes fell 9.6 percent to an annual rate of 4.25 million units. Sales of condominiums fell 10 percent to a rate of 630,000 units.

What Does the 'Foreclosure Crisis' Mean for You?

2010-10-25T16:41:00.002-04:00

The Wall Street Journal

For the vast majority of homeowners, new questions about the state of foreclosures appear to be irrelevant. Few people seem to have been wrongly thrown out of their homes, and those who have been are generally months or years behind on their mortgage payments.

But the fallout from the crisis is beginning to be felt in real-estate markets across the country, particularly in places dominated by vacation homes and investment properties. Some of the worst-hit areas could be Western ski towns, because fall is the busiest time of the year for sales.
Real-estate salespeople in some of those places are worried. "September and October are usually the height of the selling-season for us," says Rich Armstrong, who owns the brokerage Rare Properties in Jackson Hole, Wyo. "Now we are seeing a number of what we call 'fence sitters,' people who would have leapt in even a month ago, but now are waiting on the sidelines."

The "foreclosure crisis" is a result of the frenzied real-estate boom and bust of the past decade. Banks made foolish loans, and borrowers signed up for them—only to default later, as the economy slumped. Banks rushed to reclaim properties, launching a record number of foreclosure proceedings.

In the past several weeks flaws have emerged in that complex process. Because of the high volume of foreclosures, the documentation supporting legal actions was prepared hastily, and some homes were seized improperly.

Yet the far bigger worry is what happens next. A frenzy of lawsuits and banks' examinations of their own practices could throw more of the millions of foreclosures of the past few years into legal jeopardy. Attorneys general in all 50 states are investigating, and plaintiffs' lawyers are working hard to perfect their legal strategies for suits on behalf of people who have been foreclosed on.

The suits might well fail. But just the threat that past foreclosure rulings might be overturned could result in collateral damage. In some places, banks are rushing foreclosed properties to market. In others, buyers are stepping back, refusing to buy foreclosed properties or "short sales"—homes sold by owners for less than the mortgage balance. In markets already beset with large inventories of foreclosed properties, the result could be a slower recovery.

Coastal markets and ski areas are feeling the most anxiety. Some already are littered with foreclosures—in part because they're dominated by second-home and investment properties. Those owners are more willing to walk away from a house that isn't their primary residence.

Foreclosure tracker RealtyTrac estimates that, nationwide, 30% to 35% of properties in foreclosure are owned by investors or were second homes. In Aspen, Colo., the figure is about 60%, says Kim McKinley, owner of McKinley Sales Real Estate in Basalt and Aspen, Colo. If foreclosure proceedings slow from here, inventory could jump, leading to price weakness later.

"We're concerned that the phantom inventory buildup will cause a more rapid and drastic drop in prices in Aspen, which is just getting started in terms of foreclosures coming to the market," says Ms. McKinley.

The timing of the foreclosure mess is especially inconvenient for ski towns, given the fall selling season.

Property owners are growing nervous. In Park City, Utah, lenders are quickly unloading foreclosed homes ahead of what could be a long, stalled foreclosure process, says Joe Trabaccone, a real-estate agent there.

On Oct. 11, for example, J.P. Morgan Chase put up for sale an 8,000-square-foot home adjacent to a private gated golf course. Mr. Trabaccone initially recommended the property be listed for $1.6 million, but Chase opted for $1.26 million. "They are offering these homes far too low just to hurry up and sell them," Mr. Trabaccone says.

Even so, it hasn't worked. A buyer made an offer and signed a contract, but then backed out.

In South Lake Tahoe, Calif., on Thursday, Freddie Mac, the big government-sponsored guarantor of mortgages, put a foreclosed home that had just been listed for sale on hold, freezing the property until paperwork could be straightened out. The foreclosure mess "seems to be filtering down and it could be an impact," says Doug Rosner, the broker who had listed the home. Three other properties in town were also frozen, another real-estate agent says.

The "sand states" of Arizona, California, Florida and Nevada are being hit as well. These areas, too, have a lot of vacation and investment properties—and a lot of foreclosures.

Robin Speronis, a real-estate broker in Cape Coral, Fla., says business had been picking up recently, with several inquiries a day—until the latest foreclosure scandal broke. Since then, she says, inquiries have shriveled to just one in the past week.

Susan Weeks, 55 years old, and her husband, Eddie, aren't optimistic. The couple had expected to retire and downsize when they bought a condo in Clermont, Fla., near Orlando, in 2007 for $192,000. Their plan was to sell their primary residence 10 minutes away and live in the condo. The trouble: They can't sell their first home.

The Weeks paid $269,000 for their three-bedroom home in 2004. The house next door, a bit larger, is listed at $185,000, Ms. Weeks says.

The couple has decided to move back to their primary home and take a renter for the condo. But while that brings in $850 a month, the Weeks take a $450-a-month hit on the condo —on top of the $2,400 a month they pay every month on their primary home.

"We're just going to wait it out," she says.

The possible foreclosure wars to come loom so largely over Florida markets that Ms. Speronis is urging condo sellers to consider any offer they get, even if it is far below asking price or what is owed on the mortgage.

Dianne Cloutier, a records supervisor in Chelmsford, Mass., had been looking for a retirement property in Cape Coral, but decided to wait because of the foreclosure mess. "It's left us on hold until we are sure the banks have legitimately foreclosed on people and that nobody can come back on us to get their property back," she says.

Foreclosures aren't the only problem. Short sales are getting more difficult to pull off, too.

In Bend, Ore., agents say buyers are avoiding short sales or even backing out of contracts because they don't want to deal with paperwork hassles or the chance of a court challenge later.

"I have some people saying 'I don't want to mess with bank-owned properties or short sales,'" says Dianne Willis, principal broker with RE/MAX Sunset Realty in Sunriver, Ore. "They're reluctant because it can be a frustrating process, especially for those who are looking to make a big move."

The short sales "can be very frustrating," adds Becky Ozrelic, of with Steve Scott Realtors in Bend. "You just have buyers waiting and waiting."

For sellers, lining up a short sale was tough even before the latest foreclosure crisis. Banks and mortgage "servicers," the outfits that process payments, already had been scrambling to handle surging workloads.

Mike and Kim Schwarz of San Jose, Calif., are coming up on the one-year mark on their short-sale saga.

The couple had acquired several investment properties over the past few years, including one in Thousand Oaks, Calif., for $751,000. After the tenants stopped paying rent, the Schwarzes couldn't cover the payments and decided to sell, Mr. Schwarz says.

They lined up a buyer in November 2009, and started working with their loan servicer on the short sale. For lenders, short sales are ugly because they guarantee a loss, but they often are preferable to a foreclosure, in which the lender is saddled with a tough-to-sell house.

The servicer, Residential Credit Solutions, took six months to process the paperwork, the Schwarzes say. Faxes and emails were sent, but nothing happened, Mr. Schwarz says.

"We typically don't hear from borrowers about long delays," says Dennis Stowe, president of Residential Credit.

The buyer walked away from the deal in June. The couple found another buyer in August, and resubmitted the short-sale paperwork. Mr. Schwarz says he has sent paperwork to Residential Credit four times since.

On Friday, Mr. Schwarz says, Residential called to tell him the short-sale paperwork looked good and the sale should close in mid-November.

Says Mr. Schwarz: "They didn't make it easy."

Other Ways the 'Foreclosure Crisis' Could Sting Homeowners

The foreclosure mess could hurt homeowners in another way: The costs of buying a home and paying off the mortgage are likely to go up, say housing experts.

The rising costs will come both during the closing and throughout the life of the loan.

At the closing, the cost of title insurance, which protects a property buyer from claims of ownership made by other people, is likely to rise, industry officials say. Title insurance is one of those annoying costs that can sneak up on a buyer during a close; premiums average around $2,000 across states, says Tim Dwyer, CEO of insurer Entitle Direct Group.

The foreclosure mess has sent insurers scrambling. One of the largest, Old Republic Title Insurance, told its agents on Oct. 1 not to issue policies on homes that have been foreclosed by GMAC Mortgage or J.P. Morgan Chase. And on Wednesday, the nation's largest title insurer, Fidelity National Financial, said lenders must vouch for the accuracy of their paperwork before it will insure properties.

Just like homeowners-insurance rates rise after a hurricane, the rates for title insurance are expected to rise, to compensate for the added risk.

The turmoil will likely lead to pricey premiums for new homeowners, says McLean, Va.-based housing economist Tom Lawler. Adds Cameron Finlay, chief economist at mortgage lender Lending-Tree.com: "Any time there is uncertainty in the market or risk implied, it follows that costs go up."

Other costs could be felt during the life of the loan. Until the current mess, servicing loans was a low-margin, high-volume business. Servicers collect mortgage payments from borrowers and send them off to mortgage holders, and if the loan gets into trouble, they manage the foreclosure. Few doubt this process will get costlier now that it is under scrutiny from regulators and the courts. That higher cost likely will show up in higher interest rates for borrowers.

Both of these higher costs also would hit homeowners who refinance their loans.

How much the costs of buying a home will rise is unknown. Mortgage industry officials say it is too soon to tell. And no one believes the costs will significantly change the price of a home. But with the housing market still weak, the uncertainty is making the prospect of buying—or selling—a home that much dicier.

Raleigh, NC Refinance Mortgage Rates Around 4.25% for 30 Year Fixed Interest Loans

2010-09-28T18:20:00.000-04:00

Examiner

While Raleigh, NC has held up well when it comes to the mortgage market collapse there are still areas that have seen home prices drop in the last several months. With three major universities in the area and many government jobs available there are many reasons to believe the housing market will improve in Raleigh, NC.

For those looking to stay in the area and invest in their homes it is good to know that Raleigh, NC refinance mortgage rates are around 4.25% for a 30 year fixed interest loan at the end of September 2010. Be aware that it takes a great financial history to lock in to these low loan rates in October 2010.

Many analysts continue to make mortgage rate predictions that state that 30 year fixed home loans will stay very low as long as Ben Bernanke and the Federal Reserve Bank feel that the economy is still struggling. Just last week Bernanke came out and stated that interest rates were going to be held quite low for an extended period of time. This is very good news to those who have made very good financial decisions in the past.

For those who did not make good financial decisions there are many options when it comes to lower a home loan monthly payment. The Making Home Affordable government program has helped many to reduce payments as millions of Americans continue to search for Wells Fargo home loan modification. With Wells Fargo gobbling up Wachovia during the credit crisis it is the case that this major financial institution has many loans that mean the modification requirements.

In a time when mortgage interest rates are very close to all time lows it might be smart to consider refinancing. Residents of Raleigh, NC can be rest assured that jobs will remain in this area as the capital will not move and the major universities of NC State, UNC and Duke will always be within 25 miles of the state capital.

Local-Food Entrepreneurs bring Produce directly to Eaters

2010-08-20T14:31:00.000-04:00

Lexington Herald-Leader

RALEIGH, N.C. - "From farm to fork" has long been the rallying cry of the eat-local movement.

But getting the food from the farm has been a barrier for some consumers who don't have time to shop at farmers markets or who find community-supported agriculture programs, better known as CSAs, inconvenient.

Enter a new breed of business - a middleman between consumers and farmers - that tweaks the old model.

Traditionally, a consumer who joins a farmer's CSA pays up to $600 in the winter for a weekly share of produce from spring to fall. Though the programs are popular - there are more than 100 in North Carolina, up from 35 in 2002 - many people cannot pay for a whole season of produce in advance, volunteer on a farm or pick up the food at designated times as many programs require. Other people simply don't know what to do with an abundance of beets or kale.

That has created an opportunity for businesses such as Papa Spuds and The Produce Box, which allow customers to pay for their produce as they go - generally $20 to $30 per box. They offer customers more choice and generally stock products from several farms rather than just one. In addition, the boxes are delivered to customers' homes.

These new businesses are bringing hundreds of new customers to the table, helping to make farming financially viable for more small farmers.

In two years, The Produce Box has grown from 25 customers to nearly 3,000. At the end of last season, the Raleigh company was filling 900 boxes a week, and owner Courtney Tellefsen said demand is growing steadily this year. Some areas have a waiting list to become a Produce Box customer.

This type of system has been feasible only for a few years, said Rob Meyer, co-founder of Papa Spuds, a similar operation in Cary, N.C. He credits his partnership with Eastern Carolina Organics, a Pittsboro, N.C., group that acts as a distributor for local organic products.

Meyer's company, which offers meat and produce, also contracts directly with dozens of farms throughout the state to get the volume and variety customers demand.

"If you were going to do local organic in our size in this area, there aren't enough farms," he said.

Sandi Kronick, CEO of Eastern Carolina Organics, said the new businesses complement farmers' other efforts to reach consumers. Eastern Carolina Organics is farmer-owned and distributes organic products from farmers to restaurants, retailers and companies such as Papa Spuds.

"CSAs are overbooked by February, and there's always going to be customers who choose to go pick up off the farm," Kronick said. "The point is that the money is flowing throughout the local community, and hopefully it's resulting in more acres turning into organic in the state."

The Produce Box partners with Lee Farms in Dunn, N.C., where the sorting and packing is done on site, often within hours of the items' being picked. The company then relies on a network of women who do not work outside the home to distribute the boxes throughout the Triangle.

Papa Spuds gets bulk shipments from Eastern Carolina Organics at its Cary warehouse, where everything is packed and then distributed.

"It took us a year to turn a profit," Meyer said. "We bootstrapped the hell out of it at first. We got our feet and hands really dirty."

For customers like Jessica McRackan the new businesses make eating local feasible.

McRackan, 29, of Cary gave birth to a daughter at the end of March, an event that put an end to her regular trips to the farmers market.

"I like it better," she said of the deliveries. "I love the environment of the farmers market; it's a lot of fun. But it's often hot and it's crowded."

McRackan has become such a fan of The Produce Box service that she writes a blog dedicated to sharing what she does with the contents of each box she receives. She posts meal plans and recipes to help others figure out what to do with less familiar produce.

Government Starts Talks about New Mortgage System

2010-08-17T10:41:00.002-04:00

Associated Press

Talk of shrinking the government's involvement in the mortgage market is growing. Just don't expect action any time soon.

A conference Tuesday at the Treasury Department is the first of many steps toward restructuring the nearly $11 trillion mortgage market. So far, rescuing mortgage giants Fannie Mae and Freddie Mac has cost the government more than $148 billion. That number is expected to grow.

Treasury Secretary Timothy Geithner pledged "fundamental change" to the structure of Fannie and Freddie, which profited tremendously during good times but burdened taxpayers with losses when the housing market went bust. He said the two companies weren't the only cause of the financial crisis, but made it worse.

Geithner, however, did not offer a specific exit strategy for Fannie and Freddie. He said only that, "it is our responsibility to make sure that we create a system that is not vulnerable to these same failures happening again."

With Republicans likely to pick up seats in Congress in November, however, the Obama administration will need support from both political parties for the changes it proposes.

Reflecting this reality, Geithner said that "the failures that produced the system we have today were bipartisan. The solution must be as well."

Executives and mortgage experts are prepared to tell Obama officials that the government must stay in the business of backing U.S. mortgages even if Fannie and Freddie disappear someday.

"At the end of the day, the government will still have a very large role to play," said Mark Zandi, chief economist at Moody's Analytics and a panelist at the event. Others include mortgage executives from Bank of America Corp. and Wells Fargo & Co, plus Bill Gross, managing director of bond giant Pimco and Lewis Ranieri, one of the creators of mortgage bonds.

The Obama administration's management of Fannie and Freddie has been under fire for months from Republicans on Capitol Hill. In December, the Treasury Department eliminated a $400 billion cap on how much money it would give the mortgage giants to keep them from failing. Sen. John McCain, R.-Ariz., has called that a "taxpayer-backed slush fund" and called for the support to be wound down.

Many in the mortgage industry say that's not realistic.

"There has to be a game plan," said Paul Leonard, vice president of government affairs at the Housing Policy Council, a mortgage industry group. "You can't just pull the plug on them."

Fannie and Freddie buy mortgages and package them into securities with a guarantee against default. They have ensured that millions of Americans can get home loans - even after the housing market collapsed.

The two mortgage giants, the Federal Housing Administration and the Veterans Administration together backed about 90 percent of loans made in the first half of the year, according to trade publication Inside Mortgage Finance.

At some point the government will have to scale back the level of support it provided the housing and mortgage markets during the recession and financial crisis.

"The government's footprint in the housing market needs to be smaller than it is today," said Shaun Donovan, President Barack Obama's housing secretary.

Most of the plans being circulated to reshape the mortgage market call for the government to guarantee that investors who buy mortgage-backed securities receive their money even if borrowers default.

Under this system, Fannie and Freddie could either be returned to private ownership or phased out completely. Fannie and Freddie, or their replacements, would pay the government to insure the loans. That money could be tapped if the housing market collapses.

"A government guarantee is both a desirable and necessary component of the country's housing finance system," wrote John Gibbons, a Wells Fargo & Co. executive vice president, in a letter last month to the Treasury Department.

Geithner said that there is a "strong case to be made" for such a government guarantee, but said the government needs to charge enough money to make sure the taxpayer does not get hit with losses in the future.

Caterpillar Picks NC for Second Plant in Two Weeks

2010-08-05T16:53:00.000-04:00

WRAL

SANFORD, N.C. — Heavy equipment manufacturer Caterpillar Inc. announced an expansion at its Sanford plant on Thursday afternoon, bringing more than 300 jobs back to a facility that has seen cutbacks in recent years.

Gov. Beverly Perdue and other state and local officials were at the plant to herald the $28.3 million expansion, which is expected to add 325 jobs over the next four years. An unidentified Caterpillar supplier is also expected to bring 160 jobs to North Carolina to work with the plant, officials said.

“For the second time in less than a week, Caterpillar is making a major investment in North Carolina and strengthening its ties as a corporate citizen of our state,” Perdue said in a statement. “By expanding its stake in North Carolina, Caterpillar has demonstrated that our own investments in education, worker training, transportation and infrastructure have paid off.”

Last Friday, the company said it would build a $426 million factory in Winston-Salem to produce axle units for large mining equipment. It could employ about 500 full-time and contract workers in five years.

Caterpillar will build a 270,000-square-foot addition to the Sanford plant that will house logistics and robotic welding lines to produce skid steer loaders and other equipment, officials said. About half of the new production is slated for export, they said.

Construction is expected to start in September, with production beginning by next July, officials said. The average annual wage for the new jobs will be $35,602, plus benefits, they said.

The Sanford plant and another Caterpillar facility in Clayton have experienced several rounds of layoffs since late 2008, as the company adjusted to the global economic slowdown.

Lee County's unemployment rate is more than 12 percent, and Sanford Mayor Cornelia Olive said it was difficult for her to stop smiling on Thursday with hundreds of new jobs on the horizon.

"This has been a hard couple years for Lee County," Olive said.

Charles Childress, who lost his job as a machinist five months ago, already lined up an interview for Monday for a job at Caterpillar.

"It's hard to find a job. It really is," Childress said. "I know a lot of people out there need work, and there's a lot of people out there qualified (for the Caterpillar jobs)."

Caterpillar employs 1,026 full-time workers in seven North Carolina counties, and with the economy stabilizing, the Peoria, Ill.-based company appears to be gearing up for growth again.

Lee County commissioners in June offered Caterpillar up to $900,000 in incentives to land the plant expansion.

Caterpillar also was awarded a $600,000 grant from the One North Carolina Fund, which provides cash grants to attract business projects to the state. No money is paid up front, and companies must meet job creation and investment targets to obtain the funding.

Also, the state Economic Investment Committee voted Thursday to award a Job Development Investment Grant to Caterpillar. Under the terms of the JDIG, the company is eligible to receive a grant equal to 75 percent of the state withholding taxes on the new jobs for each year in which it meets annual performance targets.

If Caterpillar meets the all of the targets during an 11-year period, it could garner $3.46 million from the JDIG.

40% of Participants Depart Federal Mortgage Aid Program

2010-07-21T14:15:00.000-04:00

USA Today

The number of homeowners dropped from the Obama administration's signature program to modify mortgages for cash-strapped homeowners is larger than the number of those receiving permanently lower monthly payments under the program.

The program puts homeowners into five-year programs with lower monthly payments on their mortgages, but first they must provide proof of income and get through a three-month trial period making all payments on time. About 530,000 homeowners, or about 40% of 1.3 million borrowers enrolled, have had their lower mortgage payments canceled, the Treasury Department reported Tuesday.

An additional 398,000 homeowners, or 30% of borrowers, have received the longer-term lower payments on their mortgages.

To qualify, homeowners must be paying about a third or more of their monthly gross income toward their mortgage. They must have a property value less than about $729,000, and they must have incurred some sort of hardship.

For qualifying homeowners, banks will extend repayment periods, drop interest rates to as low as 2% and, in some cases, reduce the outstanding loan value. Homeowners in the longer-term modifications are guaranteed lower payments for five years, then fixed terms at today's low rates for the life of the loan. The typical homeowner is receiving a reduction in the monthly payment of 36%, or more than $500 a month.

Some economists say few are benefiting from the program. "(It) is not helping a lot of people, but for those that have gotten it, it seems to be working reasonably well," says Mark Zandi at Moody's Analytics. "The problem is not a lot of people are getting it."

Others see progress. The total number of homeowners getting longer-term mortgage modifications increased nearly 15% in June. "The housing market and economy are starting to resolve the issues, thought it's going to take years," says Joel Naroff at Naroff Economic Advisors.

For the first time, the government also detailed how many borrowers with modifications are defaulting for a second time. For homeowners with permanent loan modifications for six months, fewer than 6% are 60 or more days delinquent. Fewer than 3% of such homeowners have defaulted at the nine-month mark.

FeatureTel Named Among Top 100 NC Small Businesses

2010-07-14T15:05:00.000-04:00

TMCnet

The Business Leader magazine has recognized FeatureTel, a hosted business VoIP telephone system solutions company in North Carolina as a Top 100 North Carolina Small Business for 2010.

Business Leader provides information, tools, and resources for business executives/owners. The magazine is found on newsstands worldwide with local editions available in certain markets.FeatureTel ( News - Alert) is a fully managed and Hosted VoIP, voice and data communications service company. The company provides businesses across the Carolinas with a cost-effective, feature-rich alternative to traditional voice communication solutions.

FeatureTel earned this recognition mainly because of its implementation of a new telephone service with upgraded functionality for the City of Durham, the establishment of its Channel Partner (News - Alert) program, and its community service. Apart from sponsoring events to benefit Hospice of Wake County, Habitat for Humanity and breast cancer research, FeatureTel provides free phone service to the Triangle Autism Society.

“We are pleased to have been recognized with this award for our business achievements,” said FeatureTel Founder and CEO Paul Levering (News - Alert), “but we are especially proud of our community involvement and what we do to give back.” Levering, a supporter of educational concerns, personally participated as a panelist at the North Carolina School of Science and Math Alumni Forum & Lecture Series last year.

The list of Top 100 North Carolina Small Businesses from Business Leader includes companies with 100 employees or less that do the majority of their business in North Carolina. During the selection process, Business Leader evaluated each company's one-year and five-year revenue growth, business achievements and community involvement. FeatureTel was honored June 24 at an awards dinner in Raleigh real estate, N.C.

In October 2009, the company announced that it recently completed the installation of phones and related services for 1,815 users across the City of Durham’s operations, including police and fire rescue. This is deployment is part of a $1.63 million contract that also includes network equipment upgrades and a three-year service agreement. The previous telephone system of the city required 67 different key systems.

Many Cities Across U.S. Issuing More Housing Permits than during Boom

2010-07-12T13:06:00.000-04:00

Reed Construction Data

Des Moines, Charleston, Austin, Columbia and Houston are the strongest large metro housing markets. These are the only cities with a population over 500,000 that issued permits/1000 population at more than three times the national pace over the last year.

Twenty-four smaller cities also had intense housing development at a rate per 1000 population more than three times the national average. This set includes two cities rebuilding from hurricane destruction of homes, several college towns and military base cities, resort and retirement cities in North Carolina and the Rocky Mountains and three market center cities in the Plains states. Several of the resort/retirement cities were part of the 2004-06 housing boom but the rest of the twenty-four cities sat out the boom so they have relatively minor foreclosure and underwater mortgage problems now.

The four large Texas metro areas continue to dominate the list of the largest single family housing markets. Together, they account for nearly 37% of the permits over the last year among the twenty cities issuing the most permits. Las Vegas, Phoenix, Riverside, Tampa, Austin, San Antonio and Orlando are the only housing boom cities still left on the top twenty list. Washington has moved up to third place on the strength of tens of thousands of new federal jobs. Atlanta, the largest housing market for several years has dropped to 7th place due to a weak Georgia economy and a large surplus of unsold homes. Fifteen metro areas, all manufacturing centers without any of today’s high growth industries, have issued less than two permits a month over the last year. Sandusky Ohio has issued no permits and Wheeling West Virginia has issued only one permit.

New York City remains by far the largest multi family permit metro. The recent credit based recession caused much less damage to the New York City economy than expected. Construction activity remains relatively strong partly due to the mild recession and partly because the permitting process is so long and so expensive that developers are always in a catch up mode. Permits are up from a year ago in many college and oil patch towns that escaped both the 2005-06 housing boom and the worst of the ongoing economic recession. San Francisco has returned to the list of top multi family markets due to hiring by its growing technology industries. Other markets that have recently become significant are Salt Lake City (low cost attracts new jobs and residents) and Virginia Beach (a lower cost alternative to South Florida).

Forty-five cities issued more housing permits in the three months ending in March than they did at the peak of the housing boom in late 2005/early 2006. All of these cities are very small markets except for El Paso, Buffalo and Rochester. This should not be interpreted as a list of cities leading the housing market or the economy out of recession. These cities simply missed most of the recession as they did the previous housing boom. Many of them have a locally unique housing demand driver. In El Paso, it is immigration. In Bismarck and Grand Forks, it is a strong farm economy.

Atlanta and Phoenix continue to have the largest declines in homebuilding relative to the peak of the housing boom. The twenty cities on the list are all suffering from the surplus supply created during several years of overbuilding, as with Houston apartments. Excepting, New York City, each of them has an unusually large inventory of homes for sale and a high incidence of foreclosures and underwater mortgages that will keep inventory excessive well into next year and possibly beyond in Florida and the Rocky Mountains.

IBM To Hire 600 Workers In RTP For Service Center

2010-07-11T18:08:00.000-04:00

Raleigh Telegram

North Carolina Governor Beverly Perdue announced this week that a subsidiary of IBM (International Business Machines) will hire around 600 workers during the next two years in Research Triangle Park.

The governor’s office says that the company will invest $3.7 million to open a managed business process service center in Research Triangle Park. The jobs are being located here thanks in part to tax incentives being offered by state and local governments that could total as high as $7.79 million if IBM hires all of the 600 workers.

“IBM has been a major employer in North Carolina providing thousands of skilled jobs for more than 30 years. We value this company’s ongoing commitment to North Carolina and Research Triangle Park,” said Perdue.

With thousands of workers, IBM is one of the largest employers in Research Triangle Park and one of its first tenants in the facility that was created by the government decades ago to draw high-tech firms to the area.

According to the governor’s office, the salaries for the 600 new jobs will be around $50,000 a year, while the Durham County real estate average is $57,772.

“The new services operation furthers our commitment to the state of North Carolina and our ongoing presence in Research Triangle Park,” said Bob Greenberg, senior state executive, IBM North Carolina in a released statement.

“These are exactly the sort of highly skilled jobs that North Carolina needs to be recruiting in the 21st century economy, and we’re especially pleased that IBM is expanding its presence in Research Triangle Park,” said Rep. Mickey Michaux, (D-Durham) in a released statement.

High Risk Insurance in NC More Affordable Under Health Care Reform

2010-07-06T12:26:00.000-04:00

Public News Service

RALEIGH, N.C. - Quality, affordable health care is easy to take for granted if you have access to it, but it's an enviable commodity for North Carolinians with pre-existing conditions. In the past, medical issues such as cancer or multiple sclerosis prevented people suffering from these diseases from having access to affordable insurance, or even to coverage at all.

That changed 18 months ago in North Carolina with the creation of Inclusive Health, the North Carolina Health Insurance Risk Pool. The organization offers insurance policies to high-risk individuals at only a slightly higher rate than to people without health issues.

Executive Director Michael Keough says the savings for the participants are significant.

"Our rates are capped, by law, at 150 percent of the market average for people who typically would run into rates two to five times higher."

Prior to enrollment, some people were paying premiums as high as $3000 a month for health insurance coverage, Keough says. Enrolling in the state program reduces premiums by 50 percent, on average.

The addition of the federal program, part of this spring's health care reform legislation, will reduce rates even further for people who have had no access to insurance. Out of the 3,900 people currently enrolled in Inclusive Health, roughly 20 percent will benefit from the federal program.

Their savings for Raleigh assisted living will be significant. Currently, a 50-year-old woman in the high-risk pool pays $561 a month. The federal program would reduce her rate to $347 each month, Keough explains.

"The rates for the federal pool are 100 percent - in other words the same - as they would be for a person in the individual market who has no pre-existing condition. So it's a real break and a significant improvement."

The government is banking on the fact that more people will enroll in the more affordable insurance program, making it easier to fund such a costly endeavor.

What Should Home Seller Expect to Pay at Closing?

2010-06-24T14:58:00.000-04:00

The Wall Street Journal

Don't hire any real estate agent that doesn't give you a clear idea of what you should expect to pay at closing, and what you should net from the sale.

Since these costs vary depending on both the location and what other sellers are offering to buyers in your neighborhood, I can't tell you exactly what that number will be. But here's a general rundown on costs:

As a seller, you're responsible for paying certain set costs, such as a grantor's tax (which in Virginia is $1 for every $1,000 of fair market value, based on the higher of assessed or sales value). You will also have to pay any homeowners' association fees and real estate taxes due, prorated to the closing date, as well as any outstanding utility, water and sewer bills.

You'll also have costs that can be negotiated, at least somewhat. These include settlement company charges, any fees your lender may charge for paying off the loan, and of course, the broker's commission.

For all of the above, as a rule of thumb, you can expect closing costs will be about 1.5% of the purchase price, and broker fees to run between 3% (if you use a flat-fee broker) and 6% (if you use a full-service broker). All of these costs are spelled out in the HUD-1 form

But since it's still a buyer's market, it's not unusual for purchasers to ask for help with their own closing costs, or to buy down the interest rate on their loans (their lender must approve this). If the buyers are unhappy with some aspect of the house, such as stained carpeting or old appliances, they may also ask for a decorator's allowance. For this reason, I don't think it's shocking to be asked for $7,500 in concessions.

The buyers' requests will be spelled out in the offer, and you don't have to accept them. However, if other buyers are doing so, you should consider doing it too. Your agent can find out the dollar amount of seller concessions for recently sold homes comparable to yours.

Regardless of what sort of deal you and the buyer work out when you accept their offer, you should also put a few thousand dollars aside for problems that may be revealed after the buyer has the home inspected—even if you have had your own home inspection done before you put your home on the market. You don't want your sale scuttled because of some loose flashing or a sagging porch. It's also wise to offer a one-year home warranty, which costs around $300. That way, the buyer will be calling the warranty company, and not you, should the washer break a month after closing.

And remember that many concessions may be worth making if the buyer offers you a good enough price. It's the bottom line that counts.

U.S. Homebuyers still in the Driver's Seat

2010-06-16T15:35:00.000-04:00

CNBC

Prices were cut on nearly one quarter of U.S. homes on the market in May, the same as April, with a growing supply of unsold homes keeping buyers in the driver's seat, real estate web site Trulia.com said Wednesday.

Sellers lowered asking prices at least once on 22 percent of homes listed as of June 1, unchanged in the month and up from 20 percent two months ago, San Francisco-based Trulia said in a report provided to Reuters before official release.

A year ago, prices had been cut on 23.6 percent of listed properties. Sellers may face a setback after a brief spring sales spree driven by a rush for federal tax credits of up to $8,000.

To qualify, borrowers who may have purchased in the summer and fall raced to meet the April 30 deadline to sign contracts.

Spring sales could be "providing sellers with a false state of optimism," said Trulia Chief Executive Pete Flint.

"For the unforeseen future, buyers will continue to have the negotiating power and I expect we will see sellers get aggressive via price cuts throughout the summer," he said in a statement.

In the weeks since the tax incentive expired, applications to buy homes toppled to a 13-year low and home builder sentiment worsened.

Inventory levels are growing as sellers gain comfort that the spring season will pave the way for healthier summer sales, Trulia said.

Banks coping with record numbers of repossessed properties will add to the supply as they place the homes on the market, though most economists expect that pace will be measured.

Sellers slashed a total of $26.7 billion in May from asking prices, more than the $25 billion in April and $22.8 billion in March, according to Trulia.

The average discount on the reduced homes held at 10 percent from the original listing. More than a year of tax incentives put the U.S. housing market on a more solid footing.

However, a significant recovery is unattainable without a meaningful improvement in employment, economists agree.

Government data earlier this month showed private-sector hiring rose by 41,000 in May, far overshadowed by the 411,000 temporary census jobs.

Price cutting over the past year was the greatest in cities based in the Midwest and South.

Kansas City, Missouri led by list, with 31 percent of homes for sale cutting prices at least once, up from 20 percent a year earlier.

Other cities with the largest increase in share of homes that lowered prices were Arlington, Texas; Cleveland, Ohio; Louisville, Kentucky, Houston, Texas and Minneapolis, Minnesota.

Western cities had the most improvement in the share of sellers slicing prices over the year.

These were among the cities that had gained the most during the housing boom and have already suffered the most in the crash.

Sellers dropped prices on just 10 percent of properties listed in Las Vegas in May, for example, compared with 30 percent a year earlier.

Six California cities were among the 10 cities showing the most improvement.

Price-cutting on luxury homes listed at $2 million or more was unchanged in May, with an average discount of 14 percent, Trulia said.

Homes in this category account for less than 2 percent of total inventory, but almost one-quarter of total dollars slashed from all homes for sale.

Mortgage Rates Drop Again

2010-06-14T19:51:00.000-04:00

Market Watch

15-year fixed-rate mortgage sets record low for fourth week in a row

Bond yields fell and mortgage rates followed after a relatively weak employment report, allowing the 30-year fixed-rate mortgage to hover near its record low set late last year, Freddie Mac's chief economist said on Thursday.

The 30-year fixed-rate mortgage averaged 4.72% for the week ending June 10, down from 4.79% last week and 5.59% a year ago, according to Freddie Mac's weekly survey of conforming mortgage rates.

The 15-year fixed-rate mortgage set a record low for the fourth week in a row, averaging 4.17% this week, down from 4.20% last week and 5.06% a year ago. Freddie Mac started tracking the mortgage in August 1991.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.92%, down from 3.94% last week and 5.17% a year ago. And 1-year Treasury-indexed ARMs averaged 3.91%, down from 3.95% last week and 5.04% a year ago; the ARM hasn't been lower since the week ending May 27, 2004, when it averaged 3.87%.

To obtain the rates, the fixed-rate mortgages and the 5-year ARM required payment of an average 0.7 point, and the 1-year ARM required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

"Following a relatively weak employment report, bond yields fell this week and mortgage rates followed," said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release. "Private payrolls rose by 41,000 jobs in May, less than a quarter of the market forecast consensus of an 180,000 gain."

The economy is showing signs of improvement, Nothaft added.

"The Federal Reserve reported in its June 9 regional economic review that the economy strengthened in all 12 of its Districts over April and May. It also noted that loan quality was stable or improving in most Districts, but remained an issue for banks with large exposure to real estate," he said.

Microsoft eyes 60M Homes for Energy Hogs

2010-06-08T23:30:00.002-04:00

USA Today

More than 60 million U.S. homeowners, by simply typing in their address, can now see how their energy efficiency compares with others in their neighborhood or state.

Microsoft Hohm, a free online service that gives tips on how to boost home efficiency, announced Wednesday a new feature that scores homes nationwide. Its estimates are based on public information about a home's size, age and location and other data on an area's typical weather and utility bills.

"The big deal here is that we built the Hohm Score to answer a simple question: Am I an energy hog or an energy miser?" Troy Batterberry, Hohm Score's general manager, says in the announcement.

This new tool comes as companies increasingly compete in the home energy market, either by offering smart meters that connect a home's appliances or -- like Hohm and Google's PowerMeter -- online services.

Which states have the most and least efficient homes?

The average Hohm Score is 61, based on a 1-100 scale. Homes in Hawaii top the list, with an 81, followed by those in Delaware and Maryland (each 70), District of Columbia (68) and New Jersey (67.)

The lowest score went to homes in Texas, Tennessee and Nevada, each with a score of 51, followed by those in Oklahoma (52) and Arkansas (53.)

The scores are estimates unless a homeowner inputs more detailed information, which allows Hohm to provide customized tips for conserving energy such as caulking windows or adding insulation.

Consumers can automatically link their energy bills to a private Hohm page if they're served by these utilities: Seattle City Light, Sacramento (Calif.) Municipal Utility District, and Xcel Energy (eight states in the Midwest and West.)

"Someone could easily save $200, $300, $400 a year just by taking advantage of some of the more basic recommendations we offer you with Hohm," Batterberry says in the announcement.

Hohm charges nothing for its reports, but it may at some point start charging contractors for consumer referrals and utilities for its software, Marja Koopmans told Green House in a March interview. Koopmans is general manager of marketing for Microsoft's start-up business group, which includes Hohm.

Cashing in on a Real Estate Boom

2010-05-16T11:48:00.003-04:00

The Wall Street Journal

Most Commercial Properties Are Slumping, But 'Triple Net Lease' Deals Are Hot

Are you overlooking a commercial real-estate boom?

If your definition of the category is limited to splashy office parks and shopping malls, both of which took a pounding during the financial crisis and haven't fully recovered, then you probably are.

But think a little smaller—like fast food-restaurants, convenience stores and gas stations—and the returns get bigger. Such ventures, known as triple-net-lease properties, are "the best-performing sector of the commercial real estate marketplace," says David Bailin, head of global managed investments for Citi Private Bank, which serves ultra-high-net-worth clients. "It is the sector that lost the least value [during the recession] and rallied the quickest."

Triple-net-lease properties are usually freestanding buildings in which a tenant agrees to take responsibility for maintenance, taxes and insurance during a long lease—leaving the investor with little to do but collect checks. Investors typically buy individual properties through commercial real-estate brokers like Marcus & Millichap, CB Richard Ellis Group or others, either alone or in limited partnerships with a few other investors, and then lease them out to occupants such as drug store chains, quick-serve restaurants, convenience and dollar stores, medical outfits, and in some cases big-box retailers like Costco.

Triple-net-lease properties are generating annual returns of as much as 12% these days, estimates Bernard J. Haddigan, managing director of Marcus & Millichap Real Estate Investment Services' National Retail Group. Individual investors and small groups of partners generally invest $300,000 to $5 million per building.

Some publicly traded real-estate investment trusts concentrate on triple-net-lease properties, too. They returned 16.9% during the first quarter—compared with 11.1% for Dow Jones Equity All REIT Index, which includes all types of commercial and residential property.

Triple-net properties suffered during the recession, but less than other types of real estate. Whereas overall commercial prices fell by about 40% during 2007-09, prices for triple-net properties fell by about 15%, according to Mr. Haddigan.

Like all kinds of investing, triple-net-lease plays are based on risk: the more you're willing to take, the greater the potential returns. There are several important factors that determine a triple net deal's riskiness: the creditworthiness of the tenant, the location, physical condition and functionality of the property, and the remaining term on a lease (shorter is riskier). Also important: the "occupancy cost" or "health ratio," defined as the percentage that the tenant pays in rent relative to store sales. (The lower the ratio, the better.)

Besides overall economic risk, there's the risk of picking a tenant whose product or service might fall out of favor. Changing consumer trends can wipe out cash cows, as happened with some video-rental stores during the last decade.

"You need a good tenant," says Jeffrey Rogers, president and chief operating officer of Integra Realty Resources, a commercial real-estate appraisal and consulting firm that doesn't own or broker real estate. "Then you need an optimal location and to know what the market rent is. That is absolutely key."

Investors who lack the time or inclination to invest in triple-net-lease properties directly can get into the category via REITs such as the publicly traded Realty Income Corp. and Lexington Realty Trust in New York, as well as American Realty Capital Trust in Jenkintown, Pa., which is not traded on a stock exchange. These REITs invest mainly in triple-net properties, and they're generally sold through broker-dealers. They sometimes have minimum-net-worth and other requirements.

As with most income properties, investors can come out ahead—or behind—on triple-net properties in two ways: through price appreciation and income. The best measure of income potential is the so-called capitalization rate, or the net operating income divided by the purchase price of a property.

In recent months, cap rates have been falling because property prices nationally are rebounding. More investors are going after fewer high-quality properties, driving prices up. This is considered a positive sign for the broader commercial real estate market—but it means the easy money in triple-net-lease properties might be coming to an end.

But there is still opportunity for savvy investors. Michael K. Federman, 38 years old, is an attorney in New York who began investing in triple-net properties in 2004, during the previous recession. His first acquisitions were fried-chicken restaurants in upstate New York, followed by a Circle K convenience store in Arizona. He later sold the Circle K and purchased more buildings, and currently owns a portfolio of 15 properties.

A self-professed "conservative" investor, Mr. Federman now concentrates primarily on single-tenant properties, he says. Most recently, he and a business partner in March purchased a long-term lease property for about $4 million housing a Chipotle Mexican Grill in Lower Manhattan with a cap rate of 8.5%. That return was in line with the national average for casual dining restaurants in 2009, according to Marcus & Millichap.

"For me it was a perfect deal," he says, "because it combined prime real estate, stellar credit and minimal management responsibilities."

Median Home Prices Up in 60% of U.S. Cities

2010-05-13T12:29:00.000-04:00

USA Today

Home prices rose in nearly 60% of U.S. cities in the first quarter of this year, the National Association of Realtors says.

The median sales price for previously occupied homes rose in 91 out of 152 metropolitan areas tracked in the January-March quarter versus a year ago. There were double-digit price increases in 29 cities.

That's a sharp improvement from the fourth quarter of last year, when prices rose in about 40% of cities. The national median price was $166,100, or 0.7% below the first quarter of last year.

Sales of foreclosures and other distressed properties made up 36% of all sales in the first quarter.

The largest percentage price increase was in Saginaw, Mich., where the median price doubled to nearly $61,000. Prices in Akron, Ohio were up 95% to about $95,000. Prices in Cleveland were up 54% to $106,400.

The largest price decline was in Orlando, where they dropped 15% to nearly $132,000. Prices in Ocala, Fla., fell 14.5% to a median of nearly $93,000. Prices in Cumberland, Md., fell 14.4% to $98,300.

Fed Planning to Sell MBS

2010-05-07T14:43:00.000-04:00

The Wall Street Journal

Fed Officials Develop Plan to Shrink Central Bank's Mortgage Portfolio

Federal Reserve officials have agreed to sell some of the central bank's $1.1 trillion of mortgage-backed securities at some point, but have been unable to reach a firm consensus on how soon or how aggressively to do that, according to several people familiar with the matter.

Many Fed officials want to wait until after the central bank has started to raise short-term interest rates and tighten financial conditions, which could be many months away, but a minority is eager to move sooner.

The internal debate about the Fed's mortgage portfolio is important to households and investors because sales of mortgage securities could push down prices of the securities and push up mortgage borrowing costs.

Fed officials have been debating asset sales for months. Minutes of the Fed's late April meeting, due out in two weeks, are likely to show the debate has intensified but hasn't been completely resolved. The Fed started buying the securities in early 2009 as part of an effort to drive down long-term interest rates to speed an economic recovery. But now, most officials are uncomfortable holding them.

One issue underlying the debate is inflation expectations. Some Fed officials worry that holding such a large portfolio—which entails pumping money into the financial system to fund the purchases—fuels fears that the Fed will allow inflation to take hold in the future.

Sale proponents also are averse to holding instruments that seem to favor housing over other parts of the economy. But many officials worry that markets would interpret even a program of modest sales as a sign that the Fed wants to tighten credit, before it is actually prepared to do so or before the economy could bear it.

The Fed's conventional way of tightening credit is to raise a short-term interest rate called the federal-funds rate, which is what banks charge each other on overnight loans. Many officials are inclined to maintain that as their main mechanism for tightening policy when the time comes, and to put mortgage sales on a slow track at first.

One approach attracting a following within the Fed: After the economy improves enough, the Fed would change the way it communicates to the market, no longer saying rates would stay low for an "extended period." Then, it would pull some cash out of the financial system with operations called reverse repos and term deposits. Next, it would raise short-term rates by increasing the rate the Fed pays banks to keep money on reserve at the central bank. Then it would announce a modest asset-sales program that it might ratchet up after six to nine months as recovery gains steam.

"The best argument for this sequence is that the Fed and markets have lots of experience analyzing the effects of rate hikes and should be able to gauge their effects with reasonable accuracy," economists at Goldman Sachs said in a commentary on the Fed's debate earlier this week.

The goal would be to substantially reduce the Fed's mortgage holdings within four or five years after tightening starts. Fed officials believe they will need to sell substantially less than their overall holdings of $1.1 trillion because many of the securities will retire on their own as borrowers refinance mortgages and the securities mature.

The idea of ratcheting up sales later is one that is gaining support at the Fed and could be a compromise to allay the worries of the officials most eager to dispose of the securities. The Fed would also have the option of tapering down the sales if the economy responded poorly.

"I would start slow and then move based on the economy," James Bullard, President of the St. Louis Fed, said in an interview with the Wall Street Journal last week. "I would want to ensure markets that you would do it slowly over a longer period of time."

The process of just getting started could take as much as a year or more to unfold, depending on how the economy performs. Though the Fed's anti-inflation hawks want to get going soon, many officials are still comfortable with their assurance to the public that rates will stay low for an extended period because inflation might still be slowing and unemployment is high.

"With inflation expectations stable, core inflation rates declining, and significant excess capacity in the economy, accommodative monetary policy remains appropriate," Federal Reserve Bank of Boston President Eric Rosengren told a gathering in New York Wednesday night.

An added reason for caution: Rising concern about financial risks in Europe related to Greece's debt woes. Though Greece is small relative to the U.S., Fed officials are concerned that turmoil in European markets could spill into U.S. markets and hurt the recovery here.

More N.C. Residents Being Counted in Census

2010-05-03T13:09:00.000-04:00

WRAL

Raleigh, N.C. — North Carolina residents are doing a better job at being counted in the 2010 census than they did 10 years ago, census officials said Tuesday.

Each of the state's 100 counties has met or topped the rate at which of residents mailed in their 2000 census forms, making it one of the few states nationwide with a boost in early participation in the current population count.

The average increase in 2010 census participation is 12.9 percent, officials said, with 66 counties increasing their participation by at least 10 percent.

Seven counties had a 79 percent mail-in rate, including Chatham and Person counties, while Avery County had the lowest participation statewide at 63 percent.

The mail-in rate for Wake County real estate was 76 percent, while Orange County's was 78 percent, Johnston County's was 75 percent, Durham County's was 72 percent and Cumberland County's was 70 percent.

The door-to-door segment of the census, in which workers try to contact households that didn't mail in their census forms, begins Saturday. The Census Bureau estimates that 48 million households nationwide will be visited by a census taker during this segment, which runs through July 10.

Contest to Determine North Carolina's Top 10 Natural Wonders

2010-04-28T10:53:00.001-04:00

Ashville Citizen-Times

RALEIGH — Land for Tomorrow, a coalition dedicated to supporting the preservation of North Carolina’s land, water and historic places, will begin taking online nominations for their "North Carolina's 10 Natural Wonders" contest

North Carolinians are encouraged to nominate any landscape, natural feature, wildlife or plant life that is unique to North Carolina and should be considered among the state’s greatest natural wonders.

The general public will have until May 6 to nominate their favorite North Carolina natural wonders for consideration in the contest. Then, an expert panel, which includes Asheville Citizen-Times editor Karen Chávez, will narrow down the nominations to a group of finalists. Popular vote online will determine “North Carolina’s 10 Natural Wonders.”

As an added bonus, prizes from vendors across North Carolina, including fine art, outdoors equipment and music, will be awarded to participants each weekday of the contest. The grand prize will be awarded on May 18th when the winners are announced.

The contest is part of Land for Tomorrow’s effort to highlight past generations’ conservation successes and urge North Carolina lawmakers to continue supporting conservation in the state.

Triangle Company Tapped to Grow Dickey's Barbecue in NC

2010-03-29T04:08:00.000-04:00

Triangle Business Journal

GMW Carolina Inc., which owns Dickey’s Barbecue Pit restaurants in Cary and Durham, has signed an exclusive deal to grow the Dallas, Texas-based chain in North Carolina.

Gregory Woloszczuk, head of GMW Carolina, says this is the first time Dickey’s Barbecue Restaurants Inc. has entered into a statewide development deal with a franchisee. Dickey’s usually deals with franchisees directly. In this case, however, Dickey’s will rely on GMW to sign and support franchisees in the Tar Heel State.

By leveraging local expertise, Dickey’s believes it will be able to open locations faster and reduce expenses, Woloszczuk says.

GMW Carolina has signed up three franchisees to develop restaurants in the Triad, the Sandhills and the New Bern area. GMW also is looking for Raleigh real estate to add its third Dickey’s location, Woloszczuk says.

Woloszczuk expects each of his three franchisees to open at least one restaurant before the end of the year, saying that all three currently are in lease negotiations. He hopes to have his third Triangle location locked up before 2011.

In the meantime, Woloszczuk will be looking to sign up franchisees in the Charlotte, Fayetteville and Asheville areas over the next six months.

Woloszczuk and his wife, Maureen Woloszczuk, founded GMW Carolina in 2006. They opened the Cary Dickey’s location in September 2007 and the Durham restaurant in April 2008.

GMW has 25 employees. Each Dickey’s has about a dozen workers.

Dickey’s, which was founded in Dallas in 1941, features hickory-smoke barbecue in a variety of plates and sandwiches.

Take Two: Government Tries New Fix for Mortgage Crisis

2010-03-28T11:28:00.000-04:00

WASHINGTON (AP) - The government's bold new plan to stem the foreclosure crisis aims to succeed where previous efforts have fallen flat. Yet just as before, the odds are long, and many struggling borrowers won't qualify.

In theory, the effort unveiled Friday would help millions of troubled homeowners who owe more on their mortgages than their homes are worth, or who are jobless and need a break on their payments.

But it depends on cooperation from investors and bankers, many of whom have been locked in disputes over whether to reduce the debt owed by homeowners.

And just like the bank bailouts, this rescue plan poses risks. If it doesn't slow the wave of foreclosures or if home prices nosedive, the tentative recovery in the housing market could fizzle.

The Obama administration says the plan will help stabilize the real estate market by keeping many borrowers out of foreclosure. If it succeeds, the plan would limit damage to the overall economy.

The new effort is designed to help two groups:

- Borrowers who owe more on their loans than their houses are worth. More than 15 million homeowners fall into this category, according to Moody's Analytics. About 10 million of them owe at least 20 percent more than their house's current value.

Their mortgage companies can cut the total amount they owe, or they can refinance into loans backed by the Federal Housing Administration. FHA will get $14 billion in incentive money from the federal bailout fund.

- Unemployed borrowers. People receiving unemployment benefits would have their mortgage payments cut to no more than 31 percent of their monthly income for three to six months.

That's intended to give homeowners more time to find a job. Once they do, they may qualify for a loan modification that would permanently reduce their payments under the administration's existing $75 billion loan modification program.

The plan aims to help 3 to 4 million borrowers avoid foreclosure - the same target the administration tried to reach with its original plan last year. Even with the changes, the effort will likely prevent no more than 1.5 million foreclosures, estimates Mark Zandi, chief economist at Moody's Analytics.

Disputes among banks and investors, who would have to approve any cuts in loan principal, could prevent the effort from stopping more foreclosures, as could another drop in home prices.

"Practically speaking, this is probably going to prevent foreclosures. But I don't think they're ever going to reach 3 to 4 million homeowners," said Chris Mayer, a real estate professor at New York's Columbia Business School. "These plans always turn out to be harder than we think."

The administration's existing program to prevent foreclosures hasn't made much of a dent in the foreclosure crisis. A lack of planning and shifting rules on who qualifies produced a huge backlog in the program, the special inspector general for the federal financial bailout fund told lawmakers this week.

Still, analysts said this effort has a better chance of success than past efforts because it would reduce principal for some struggling borrowers - a method more effective at helping homeowners than reducing interest payments or other forms of aid. Laurie Goodman, a widely followed mortgage securities analyst with Amherst Securities Group, called it "a huge step forward."

The plan comes after pressure from the administration's Democratic allies in Congress to intensify efforts to help Americans at risk of losing their homes.

The overhauled plan came together after several months of negotiations between the Treasury Department, major banks and investors in mortgage securities. A major sticking point so far has been getting everyone involved to agree on restructuring loans.

The problem is that most of the troubled mortgages aren't owned by the banks themselves. They were bundled into securities during the housing boom and sold to investors.

To reduce principal payments on those mortgages, banks often must get permission from the investors who hold the securities - and may not be willing to take less.

Banking industry officials were optimistic that investors would negotiate.

"You have two choices: Modify the mortgage and help a borrower stay in their home or possibly get nothing if they foreclose," said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, an industry group.

The plan risks angering Americans like Jim Truschel, a homeowner in La Mirada, Calif., who said he was disappointed the government is spending taxpayer money on another homeowner bailout effort.

"I feel very sorry for the people that are in these situations, but they have to be somewhat to blame themselves," said Truschel, a retiree. "They should have realized that they were getting into things that they weren't going to be able to pay for."

The administration says irresponsible borrowers will not benefit. The plan will not help investors, speculators or "Americans living in million-dollar homes or defaulters on vacation homes," an administration fact sheet said.

Diana Farrell, a White House economic adviser, acknowledged the plan won't prevent many of the expected 10 to 12 million foreclosures expected over the next three years. Doing so, she said, "wouldn't be fair, it would be too expensive and we probably wouldn't succeed in any case, because many people got into homes that they simply cannot afford."

Rep. Barney Frank, chairman of the House Financial Services Committee, praised the new steps, particularly giving jobless borrowers a break on their payments for three to six months.

"The whole economy is hurt by these foreclosures," Frank said.

For taxpayers, the government's plan carries some risk. Lenders will probably sell their most troubled loans to the FHA so they can be insured against default, said Mayer of Columbia Business School. Experts have warned that the FHA faces rising losses from foreclosures and might need a bailout.

"There's more risk to taxpayers," Mayer said. "There's a big incentive for lenders to give the government the worst of their loans, the ones they fear they won't get paid back on."

One "underwater" homeowner, Joe Clarke, a police officer in Oxnard, Calif., welcomed word of the plan. He owes $390,000 on his home, which is only worth about $250,000, and he fears his adjustable-rate loan will reset to a higher rate in August.

"I've made my payments," he said. "I didn't walk away from my house. I'm just not being afforded the opportunity to refinance my home, even at the current value, without taking the principal off."

$40 Million Development Project Planned in Raleigh

2010-03-18T00:01:00.000-04:00

News & Observer

A Charlotte developer that has spent the last three years assembling property at the edge of downtown is moving ahead with plans to transform an abandoned industrial area between N.C. State University and downtown Raleigh into a mix of apartments, townhouses and shops.

In a rezoning request filed with the city of Raleigh this month, FMW Real Estate outlines plans to redevelop a 6.67-acre site just west of the intersection of West Morgan and Hillsborough streets.

The $40 million first phase would include a 5-story, 240-unit apartment building, 32 townhouses along Ashe Street and 10,000 square feet of restaurant, retail and office along Morgan Street, Wakefield Avenue and Tryon Street.

Jim Zanoni, who owns FMW along with Walker Wells, said the company hopes to break ground by next spring.

FMW paid about $14.5 million total for four different parcels of Raleigh real estate. The largest piece was once home to the Bolton Corp., a family heating and air condition company that ceased operations on the site several years ago.

FMW also owns the property where the IHOP on Hillsborough Street is located, but that site would be part of phase two of the redevelopment and exact plans for that portion have not been finalized, Zanoni said.

Siemens Moves Power Unit to North Carolina, Adds 825 Jobs

2010-03-17T00:07:00.001-04:00

RALEIGH, N.C. (AP) — German industrial conglomerate Siemens AG is consolidating production of gas turbines for electric utilities in North Carolina to position itself for an expected boom in electricity demand in the Southeast and around the world.

A subsidiary of the Munich-based company, Siemens Energy Inc., said Thursday it plans to invest $135 million to build a new manufacturing plant for 60-Hertz gas turbines in Charlotte. The company was promised a package of tax breaks, grants and low-interest loans worth up to $154.75 million to make the move.

Siemens will close a similar plant in Hamilton, Ontario, that employs about 450, though it's not yet clear how many will lose their jobs and how many transfer to North Carolina over the next 18 months, spokeswoman Melanie Forbrick said.

The turbines will be shipped to utilities in the Americas, Japan, South Korea, the Philippines and Saudi Arabia.

"Over the next five years, we expect employment at the Charlotte site to grow to nearly 1,800 people, with more than 1,000 of those positions new to Charlotte. With this move we're pushing ahead with our growth strategy in the U.S., which is our most important single-country market," Siemens AG chief executive officer Peter Loescher said in a statement.

The move is expected to create 825 engineering and manufacturing jobs in Charlotte within five years, paying an average wage of almost $64,000 a year. Production in the expanded plant is scheduled to start in the fall of 2011, the company said.

State and local governments promised up to $35 million in tax breaks and grants. A county development entity is also prepared to lend Siemens up to $120 million in low-interest loans, with funding coming from bonds created by last year's federal stimulus package.

Siemens said the move to Charlotte was in part driven by a need to be closer to customers. Siemens-built power plants supply one-third of North America's electricity, the company said.

"I think that they're seeing that the American market has been slow but will be rebounding," said William Schmalzer, an analyst for market research firm Forecast International Inc. The North Carolina move "also puts them closer to their markets in Brazil, especially, and Latin America, which are probably also going to increase in the near future."

Forecast International predicts that worldwide demand for gas turbines will be almost $140 billion by 2018, with Siemens holding about 18 percent of the market behind General Electric's 43 percent market share.

About 780 Siemens workers in Charlotte already manufacture and rebuild gas turbines. The company last spring announced an expansion of 200 jobs in Charlotte and construction of a 75,000-square-foot office next to its manufacturing plant.

Siemens employs about 64,000 workers in the U.S., including 10,000 in its energy sector.

Raleigh Named 3rd Best Market for Young Adults

2010-03-16T16:25:00.000-04:00

Triangle Business Journal

A new study ranks Raleigh as the third best metropolitan area in the country for young adults seeking to establish themselves in a recessionary economy.

The Raleigh metro area ranked high in the categories of population growth, employment growth, share of total population and the jobless rate for people ages 18-34. Raleigh also boasts a large number of households led by people under the age of 45 with incomes of more than $100,000 and residents with bachelor’s degrees between the ages of 18 and 34, according to the new report from Portfolio.com/bizjournals.

Raleigh real estate was bested in the rankings only by No. 1 Austin, Texas, and No. 2 Washington, D.C.

Charlotte, the only other North Carolina municipality listed, ranked No. 28.

Portfolio.com/bizjournals analyzed the 67 U.S. metros with populations above 750,000, searching for qualities that would appeal to workers in their 20s and early 30s.

The study’s 10-part formula gave the highest marks to places with strong growth rates, moderate costs of living and substantial pools of young adults who are college-educated and employed.

The least desirable market for young adults, according to the Portfolio.com/bizjournals study, is Detroit, which is saddled with the nation’s worst unemployment rate for young adults, the slowest rate of income growth, and the biggest decline in overall employment.

Here’s a quick look at the top 10 metros for young people.

1. Austin: Its attractiveness to young adults is broadly based, and it ranks among the 10 leading markets in five of the categories that were analyzed. This isn’t the first time Austin takes top honors in a Portfolio.com/bizjournals analysis. Earlier this year, the city was named the best city in which to launch a small business.

2. Washington: Educated young adults flock to the nation’s capital, where 35.8 percent of all 18-to-34-year-olds hold bachelor’s degrees. The study group’s median is 23.2 percent. Per capita income ($56,510) is well above average.

3. Raleigh: This is the fastest-growing major metro in the nation. The population of the Raleigh area is increasing by 3.9 percent per year. That’s more than triple the pace for the typical market, 1.2 percent.

4. Boston: Elite universities such as Harvard and MIT give Boston its intellectual cachet. The local share of young adults with college degrees (37.6 percent) is the highest in the country.

5. Houston: Employment opportunities abound in Houston, where the job-growth rate (1.7 percent per year) ranks among the five best in the nation. And so does its annual upswing in per capita income (6.6 percent).

6. Oklahoma City: The unemployment rate for young adults is lower here than anywhere but Salt Lake City and Tulsa. Oklahoma City also enjoys the nation’s third-best pace for annual income growth, a rapid 7.2 percent.

7. Dallas-Fort Worth: The recession caused some backsliding in 2009, but Dallas-Fort Worth still has 206,000 more jobs than it did five years ago. Local population is zipping higher by 2.4 percent per year.

8. Tulsa: Here’s an area that’s a true bargain. Median rent is $508 per month in Tulsa, the third-lowest figure in the study group. Compare that to such budget-breakers as San Jose (median rent of $1,334) or Honolulu ($1,227).

9. Seattle: This high-tech metro offers a wide range of good-paying jobs. Seattle ranks among the 10 markets with the largest per capita incomes ($50,471) and smallest unemployment rates for young adults.

10. Baton Rouge: Louisiana is on its way back from the wrath of Hurricane Katrina, and this is one of its success stories. Baton Rouge boasts a high concentration of young adults (26.1 percent) and a strong rate of income growth.

Bank of America Apologizes for Taking Parrot

2010-03-15T04:21:00.001-04:00

The Wall Street Journal

BofA Believed Woman's Home Was Vacant, Padlocked It and Kept Bird Over a Week

PITTSBURGH—Bank of America Corp. apologized after its local contractor entered the home of a mortgage borrower when she was away, cut off utilities, padlocked the door and confiscated her pet parrot, Luke.

Angela Iannelli, 46 years old, alleged in a lawsuit Monday that the October incident—which separated her from her 11-year-old parrot for more than a week—caused so much "emotional distress" that she needed a prescription medication for anxiety.

suicide threats from distressed borrowers are so common that one lender, OneWest Bank Group in Pasadena, Calif., had to establish procedures for alerting the police

A Bank of America spokesman said Wednesday a bank employee erroneously believed the house was vacant and sent the contractor there with instructions to install a new lock and otherwise "secure" the property. The bank spokesman said those instructions were inappropriate because Ms. Iannelli wasn't in default and the house wasn't vacant.

Mortgage lenders have struggled in the past three years to hire and train enough people to deal with the biggest wave of foreclosures since the 1930s. Nearly eight million households and Atlantic Beach vacation homes, or 15% of those with mortgages, are behind on their payments or in the foreclosure process.

Many borrowers complain they get the runaround when they call their lenders for help, receive contradictory information from different employees and are required to repeatedly fax the same documents.

At the same time, suicide threats from distressed borrowers are so common that one lender, OneWest Bank Group in Pasadena, Calif., had to establish procedures for alerting the police. Lenders' call-center employees are under heavy pressure. "These people make $14 or $15 an hour, and we ask them to move mountains," said a OneWest executive at an industry conference last month.

In her civil suit filed in the Allegheny County Court of Common Pleas, Ms. Iannelli said a contractor hired by Bank of America entered her house about 15 miles north of Pittsburgh in mid-October when she was away. According to the suit, in an "invasion" of the home, the contractor stopped utility services, cut water lines and electrical wiring, damaged flooring and finishings, poured antifreeze into sinks and toilets, and "stole" the parrot.

Ms. Iannelli, who owns a diner and works part-time as a bartender, said Bank of America representatives weren't helpful when she called in to protest. They first denied knowing where the parrot was, and later told her she could go to the offices of the contractor, about 80 miles away, to retrieve the bird herself. Ms. Iannelli said bank representatives also told her they were "tired" of hearing from her, hung up on her and advised her to seek help from the police.

Her lawyer, Michael Rosenzweig, a partner at Edgar Snyder & Associates in Pittsburgh, said Ms. Iannelli was seeking damages of more than $50,000. The amount of any damages would be decided by a jury if the case goes to trial.

A Bank of America spokesman said the bank would "quickly review the allegations in the lawsuit, the actual events that led to them and the causes of those events, and consider any hardship that resulted."

Mr. Rosenzweig said Ms. Iannelli had missed one payment around the time of the incident but quickly caught up and was now current on her loan.

After she drove two hours to reclaim her parrot in October, the bird initially seemed nervous, Ms. Iannelli said in an interview Wednesday. "He's doing very well now," she said.

North Carolina League Moving to Raleigh

2010-03-08T15:51:00.000-05:00

Credit Union Times

Bolstering its advocacy role, the North Carolina Credit Union League announced Monday it is moving its headquarters from Greensboro, where it has been since its 1934 founding, to Raleigh, the state capital, by April 2011.

“The move is designed to enhance the trade association’s ability to serve members in legislative and regulatory advocacy,” said a statement by John Radebaugh, president/CEO.

The 21-employee league currently has four staffers in Raleigh and the relocation “will create greater synergy” on regulatory and legislative advocacy, said Radebaugh.

The staff will be offered relocation packages and no positions will be cut in the move, said Radebaugh.

“The board and management looked carefully at this decision over several months and with our Greensboro lease expiring next year the board decided that now was the right time to act,” said the statement.

From an historical perspective, Greensboro, located in the central part of the state and 80 miles west of Raleigh, served the league’s primary original function of chartering CUs but the times have altered the league’s job to high profile lobbying.

The league said it is evaluating office space and downtown Raleigh real estate for its headquarters “and expects to open the new space later this year.”

"Headquartering downtown puts the entire organization in the heart of our state’s political system,” the statement concluded.

Pending Sales of Existing U.S. Homes [Probably] Rose in January; Expect Slow Climb Ahead

2010-03-05T14:34:00.003-05:00

Bloomberg

The number of contracts to buy previously owned U.S. homes probably rose 1 percent in January for a second month, showing the extension of a tax credit is sparking limited interest, economists said before a private report today.

The renewal of a government incentive to first-time buyers, originally due to expire at the end of November, and its expansion to include current owners has yet to lure buyers back into the market after helping boost sales in 2009. A lack of jobs and mounting foreclosures have depressed confidence, indicating housing will take time to rebound.

“The earlier surge in sales last year spurred hope of a quick housing recovery, but it now appears the recovery will be more slowly paced,” said Aaron Smith, an economist at Moody’s Economy.com in West Chester, Pennsylvania.

The National Association of Realtors is scheduled to release the report at 10 a.m. in Washington. Survey estimates ranged from a drop of 4.2 percent to an increase of 4 percent.

Other Sectors

A 10 a.m. report from the Commerce Department may show a surge in demand for commercial aircraft fueled a 1.8 percent increase in factory orders in January, the biggest gain in four months. A report on bookings for durable goods last week showed orders for capital equipment may have dropped, signaling business investment paused to start the year.

Fewer Claims

First-time filings for jobless benefits dropped by 29,000 to 469,000 last week, according to a Labor Department report today. The number of people receiving unemployment insurance decreased to the lowest level in a year, while those receiving extended benefits climbed.

The productivity of U.S. workers kept surging in the fourth quarter as companies squeezed more out of remaining employees to boost earnings, another Labor Department report showed today.

A measure of employee output per hour rose at a 6.9 percent annual rate, capping the biggest one-year gain since 2002, revised figures showed. Labor costs dropped at a 5.9 percent pace, more than anticipated, and fell 1.7 percent for all of 2009, the biggest drop since records began six decades ago.

Improvement in the labor market is needed to propel the economic recovery and stem the surge in home foreclosures that is holding down prices. Foreclosure filings rose 15 percent in January compared with a year earlier and exceeded 300,000 for the 11th straight month, RealtyTrac Inc. said Feb. 11.

Sales Slump

Reports last week showed the housing recovery may be faltering. Sales of previously owned homes unexpectedly dropped 7.2 percent in January after a record decrease a month earlier, according to the Realtors report on Feb. 26. New-home sales fell to the lowest on record, the Commerce Department said Feb. 24.

The housing market will “follow a similar pattern” to recovery as it did in the late 1980s and early 1990s, which both took “several years,” Toll Brothers Inc. Chief Executive Officer Robert Toll said in a statement Feb. 24.

The company, the largest U.S. luxury-home builder, said its orders almost doubled in the first quarter compared with a year earlier. It projected it will sell between 2,100 and 2,750 homes in fiscal 2010 at an average price of $540,000 to $560,000.

Builder Shares

Builder shares have beat the broader market so far this year after another provision in the legislation extending the tax credit allowed construction companies to use losses incurred in 2008 and 2009 to recoup taxes on profits going back as many as five years, three more years than usual. Lennar Corp., KB Home and Ryland Group Inc. are among builders that have reported quarterly profits because of the tax refunds.

The Standard & Poor’s Supercomposite Homebuilding Index has increased 12 percent this year, compared with a 0.3 percent rise in broader S&P 500.

Billionaire Warren Buffett said last week the U.S. residential real estate slump will end by about 2011.

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote Feb. 27 in his annual letter to shareholders of his Berkshire Hathaway Inc. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this, there will be a buyer who benefits.”

Triangle Area Ranks Number One in Housing Market Health

2010-02-25T11:48:00.000-05:00

Raleigh News and Observer

The Triangle (Raleigh, Durham and Chapel Hill, NC) has received more affirmation that it is better-positioned than most regions to emerge quickly from this recession.

Hanley Wood Market Intelligence, a California research firm, has ranked the Raleigh-Cary real estate market first and the Durham-Chapel Hill market sixth on its list of the healthiest markets among the top 100 U.S. housing markets.

The rankings are based on home prices, employment conditions and income growth potential. This is the second Market Health report released by Hanley Wood. The first was published last year.

Jonathan Smoke, senior vice president of products and innovation at Hanley Wood, had this to say about Raleigh real estate:

'Based on end-2010 economic forecasts, we think Raleigh will be the healthiest of the largest 100 markets in the country. Raleigh comes out on top because of stronger employment conditions, moderate household income growth, and continued strong household formation. The market still is expected to see minor home price declines (approximately 3 percent decline expected for 2010 over 2009), which is one factor that keeps the market from being even stronger.'

An additional note, Fayetteville, Greensboro and Charlotte are all ranked in top 10 lists by Fortune, CNN/Money.com, Forbes and NAHB reports.

Northeast Foods to Open New Plant in N.C.

2010-02-23T10:02:00.001-05:00

Baltimore Sun

CLAYTON, N.C. - Northeast Foods, a Maryland company that bakes hamburger buns for McDonald's restaurants and other commercial customers, plans to open a new plant in North Carolina, creating about 80 jobs.

Gov. Beverly Perdue's office said Monday that taxpayers will contribute $350,000 to lure the company into spending $25 million on a new plant in Clayton.

The company says on its Web site that it's supplied burger buns to McDonald's fast food restaurants since 1965. The privately owned company has five plants along the East Coast from Connecticut to Virginia, including one on Commercial Avenue.

Perdue's office says wages at the Northeast Foods bakery south of Raleigh will top an average of $41,000 a year plus benefits, compared with the Johnston County's average of $31,000.

As Many as 1300 to Attend Biotech 2010

2010-02-22T16:00:00.000-05:00

News Observer

Attendance at the state's annual biotechnology conference passed 1,000 people for the first time last year.

This week's 19th annual conference in Raleigh is expected to draw a bigger crowd, despite the down economy.

Sponsored by CED, the N.C. Biotechnology Center and others, Biotech 2010 will bring together corporate leaders, university researchers, investors and policymakers to discuss an industry that's become a foundation for this region's economy. North Carolina's biotech industry ranks third in the country, employing more than 58,000 people, with many of those in the Triangle.

The conference's speakers, including Allen Roses, a genetics expert at Duke University, and Talecris Biotherapeutics CEO Lawrence Stern, are only part of the allure.

Another attraction is the chance to network, mingle and make deals, say the conference's co-chairmen. Arthur Pappas, founder of a Durham venture-capital firm, and John Russell, a partner with the Research Triangle Park office of the K&L Gates law firm, discussed Biotech 2010 with staff writer Alan M. Wolf. Here are edited highlights of that conversation:

On what makes Biotech 2010 a draw:

For starters, CEOs and other successful executives who will discuss how to get deals done and attract financing during a downturn. And some of the region's top university researchers will show off new developments.

Investors and larger pharmaceutical companies can begin to identify promising startup companies or products. And smaller companies can connect with larger partners that can pay for further research and hiring.

"We need to bring people together and help businesses that need funding get through this tough time," Russell said.

One example is Roche, a Swiss drug company that will hold a private session where it will outline what types of investments it's seeking and what types of companies it's interested in buying, Pappas said.

"The [conference] programming is substantive and I'm proud of it," Russell said. "But over time, the social aspect of it and making contacts has become just as important."

On holding a conference during a recession:

Organizers started planning this year's conference shortly after last year's, Pappas said. And they initially worried about a drop in attendance. But local companies, law firms and venture capital firms stepped up as sponsors, and the conference is expected to draw about 1,300 people, he said.

The increase is another symbol of the biotech industry's importance to North Carolina and this region, Russell added. And it's a big change from its roots two decades ago "with 10 of us sitting around a card table drinking coffee out of paper cups."

On the industry's outlook for 2010:

Pappas and Russell are optimistic that this year will bring an uptick in financing activity for small medical companies. In addition, large pharmaceutical companies continue to seek promising products and smaller firms they can buy to bolster their business, Pappas said. That bodes well for a region like the Triangle, which is home to fledgling companies.

Another positive sign: As larger players like Glaxo SmithKline cut more jobs, some former employees will try to start their own companies.

"These cycles tend to produce more entrepreneurs coming out of large companies," Russell said. "We need to help find homes and Raleigh real estate for these people and get them busy with startup companies. That could be a powerful driver for this area."

On 2010's challenges:

Wall Street volatility could dampen investors' appetite for initial public offerings of stock. That traditionally has been a growth engine for the biotech industry.

That trend also could hurt the flow of venture capital, money that fuels most smaller companies' research and hiring.

"We have a backlog of promising drugs and medical devices that need funding," Russell said. "There is venture money that is looking for opportunity."

And unlike previous recessions, this region hasn't seen a huge increase in the number of business failures, Russell said. That makes the area more attractive to outside investors.

"I like to think it's because we're smarter, but it might be because we're lucky, too," he added.

Home Prices Recover in Some Metro Areas

2010-02-15T11:01:00.000-05:00

The Wall Street Journal

Home prices rose in more than a third of U.S. metropolitan areas in the fourth quarter, the National Association of Realtors said Thursday as it pointed to a "broad stabilization" in values.

The median price for single-family home resales was up from a year earlier in 67 of the 151 U.S. metropolitan areas included in the trade group's quarterly survey. But other housing analysts say the home-price trend depends heavily on any recovery in the job market and on the pace of foreclosures.

The national median price for single-family homes was $172,900 in the fourth quarter, down 4.1% from a year earlier. That was the smallest decline in more than two years.

Among metro areas showing the biggest gains from a year earlier were Cleveland (25%), Akron, Ohio, (23%) and San Francisco (13%). Those increases don't denote a general surge in home values but rather show that sales of foreclosed homes at fire-sale prices made up a smaller percentage of overall sales than they did a year earlier.

Foreclosures dominated some markets a year ago. Nationwide, "distressed property," including foreclosures and homes at risk of foreclosure, accounted for 32% of fourth-quarter transactions, down from 37% a year earlier, the Realtors estimated.

Metro areas showing big price declines included Las Vegas and Ocala, Fla., (both down 23%) and Orlando (down 20%).

For condominiums, the median resale price in the quarter for 54 metro areas surveyed was $177,300, down 4.8% from a year earlier. Eleven of the metro areas showed higher condo prices, and the rest showed declines.

One major worry is that price drops have left many households without any equity in their homes. Homeowners who are "underwater"—owing more than the value of their homes—are more likely to abandon their houses if their incomes fall or they lose their jobs. That would create more foreclosures, weighing on home prices.

At the end of 2009, 21% of households with mortgages on single-family homes owed more than the current value of their homes, according to a new estimate from Zillow.com, a real-estate data provider.

State and federal efforts to avert or delay foreclosures by offering borrowers easier terms have created a huge backlog of unresolved cases, likely to lead to an eventual bulge in the supply of foreclosed homes. As of Dec. 31, about 3.9% of first-lien home mortgages were 120 days or more overdue but still not in the foreclosure process, according to LPS Applied Analytics. That represents about two million households.

January Foreclosures Up 15% Year-Over-Year

2010-02-12T09:13:00.003-05:00

USA Today

The number of U.S. households facing foreclosure in January increased 15% from the same month last year, and a surge in cash-strapped homeowners who've fallen behind on mortgages could be on the way.

More than 315,000 households received a foreclosure-related notice in January, RealtyTrac reported Thursday. That number is down nearly 10% from 349,000 in December, which saw the third highest total since the company began tracking foreclosure data in 2005.

In January, one in 409 homes were sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions. Banks repossessed more than 87,000 homes last month, down 5% from December but still up 31% from January 2009.

January marked the 11th straight month with more than 300,000 properties receiving a foreclosure filing. The numbers could stay above that level as unemployed homeowners who have tried to keep up with their mortgages finally start missing monthly payments.

Mortgage financier Fannie Mae reported in late January that the rate of borrowers who have a conventional loan on a house and are seriously delinquent was 5.29% in November, more than doubling the rate of 2.13% in November 2008. Borrowers are considered seriously delinquent if they are past due by three months or more, or are in foreclosure.

"There's a lot of foreclosures in the pipeline, and the number is going to continue to get bigger," said Patrick Newport, an economist with IHS Global Insight.

Last month's foreclosure activity followed a pattern similar to that of a year ago, when a double-digit percentage increase in December was followed by a 10% drop in January.

The dip in January's numbers may be due to processing delays by lenders during the end-of-year holidays, said Rick Sharga, senior vice president of RealtyTrac, which is based in Irvine, Calif.

"I don't think it's an early sign of the coming of the end of the foreclosure crisis," Sharga said.

A record 2.8 million households were threatened with foreclosure last year, and the numbers are expected to rise to between 3 and 3.5 million homes this year, RealtyTrac said.

Slowing the foreclosure rate is a key step in the recovery of the real estate market and the overall economy. The foreclosure crisis forced the federal government and several states to come up with plans to prevent or delay the process to help delinquent borrowers.

Foreclosed homes are usually sold at steep discounts, so they often lower the value of surrounding properties. Cities lose property tax dollars from foreclosure homes that sit empty and from declining home values, straining local economies. Home prices have stabilized in some cities, but are still down 30% nationally from mid-2006.

Economic issues, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Initially, subprime mortgages were mostly the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.

Among states, Nevada posted the nation's highest foreclosure rate, followed by Arizona, California, Florida and Utah. Rounding out the top 10 were Idaho, Michigan, Illinois, Oregon and Georgia.

The metro area with the highest foreclosure rate in January was Las Vegas, with one in every 82 homes receiving a foreclosure filing. It was followed by Phoenix and the California cities of Modesto, Stockton, and Riverside-San Bernardino-Ontario.

Study: Raleigh-Cary Ranked No. 3 in Five-Year Jobs Growth

2010-02-08T00:31:00.001-05:00

Triangle Business Journal

The number of jobs in the Raleigh-Cary area grew 10.3 percent during the five-year period that ended in December – the third best performance among the 67 U.S. metros with a population of at least 750,000.

A study of U.S. Bureau of Labor Statistics data conducted by G. Scott Thomas of Buffalo Business First, a sister paper of Triangle Business Journal, found that Wake, Johnston and Franklin counties added 47,600 jobs between December 2004 and December 2009, bringing the area’s total number of jobs to 508,300.

Raleigh-Cary ended up on the positive side of the jobs ledge despite losing nearly 20,000 jobs over the past two years. The area had 527,700 jobs in December 2007. (Go to the bottom of this page to see how Raleigh-Cary fared in each of the five years studied.)

Still, Raleigh-Cary trailed only two Texas metros in percentage job growth over the five-year stretch, which bodes well for the Raleigh real estate market. Austin led the way with 14.2 percent growth, to 781,000 jobs. San Antonio was second at 10.6 percent, to 847,700.

The only other North Carolina metro with at least 750,000 residents, Charlotte, also gained jobs during the five years studies. The Queen City added 24,200 jobs, or 3.1 percent – to 811,600 – despite taking a major hit on the jobs front with the financial crisis and the shedding of thousands of banking jobs.

The Durham metropolitan area was not big enough to be included in the study.

Texas posted the strongest performance, with four of the top six metros in terms of percentage gain. Houston, No. 4 in percentage gain at 8.9 percent, was No. 1 in raw gain at 206,600 jobs added over the five-year stretch.

Texas and North Carolina fared better than most areas of the country during the five years ended in December 2009. Nearly two-thirds of the 67 major markets have fewer jobs now than they did in 2004.

Detroit has suffered the worst – no surprise, given the woes besetting domestic automakers. The Detroit area has lost 343,700 jobs during the past five years.

Los Angeles and Chicago have also suffered six-figure declines. A total of 200,700 jobs have slipped away from L.A. since 2004, and 173,300 have vanished from the Chicago area.

Detroit also ranks the worst in terms of percentages. One-sixth of Detroit’s jobs -- 16.5 percent -- have disappeared in the past half-decade. New Orleans, which was battered by Hurricanes Katrina and Rita early in the study period, has suffered a five-year loss of 14.9 percent.

Builders Reassess the Market

2010-02-02T02:43:00.001-05:00

The NY Times

RIVER VIEWS At Henley on Hudson in Weehawken, work continues on a 27-unit building that is scheduled to open this summer. It is the fifth building there; a sixth structure is expected to be built later.

THE number of new-housing permits issued statewide in 2009 did not even reach 12,000. The last year the tally was that low: 1945, when New Jersey was still mostly cow and corn country.

If the housing crisis was finally over and the overall economy was headed toward recovery, it would still take at least two years for housing starts to recoup, according to market analysts.

“Traditionally, after past recessions, housing starts have doubled within two years,” said Jeffrey G. Otteau, whose Otteau Valuation Group provides advice on state real estate trends. “Because of the severity of this recession, though, there may be lingering wounds.”

Yet even in the face of these sobering numbers, several builders of multifamily projects have forged ahead — some actually building, others planning on it as soon as weather permits.

Their reasons are varied, based on interviews with developers of several large projects. Some asserted that their condominium developments held special appeal despite the general slowdown in sales; others said they had used the “down time” of the economic crisis to reconfigure plans and now felt that they understood the changes in buyers’ requirements.

“We paused our construction process,” said Lisa Macchi, an executive vice president of sales and marketing at Millennium Homes, in discussing Vizcaya, a high-end development rising atop a ridge off Northfield Avenue in West Orange.

In late 2008, Millennium was at work on 40 condo flats and 46 town homes at Vizcaya; as the outlook for the housing market grew increasingly grim, the company decided to create just the “shell” for another 41 condos. On the north side of the development’s huge main structure, it simply laid in foundation and put up first-floor walls.

Then, according to Ms. Macchi, sales were surprisingly strong at the first residences despite the slowdown: About 80 percent of them sold, at an average price of $1.2 million. So the decision to wait was revised. Last summer, Millennium decided to build out the last group of condos.

Construction is set to begin in March. Contracts have already been signed for a dozen of the units that won’t be completed until early next year, she said. The average sales price for those units is now $1.4 million.

By contrast, other developers expressed the belief that demand for top-end dwellings with the most elaborate possible finishes and features has diminished for the foreseeable future.

One of them, David Barry, the president of the Ironstate Development Company in Hoboken, said his company was instead focusing on ways to create “efficient” units — “not overly large, with high amenities, but lower price points.”

Mr. Barry, who shocked some fellow developers by pulling out of the condo construction game three years ago even as the market was still booming, said Ironstate would not get back in before the end of the year.

But the company is proceeding with plans to create about 70 condos at its Pier Village rental-and-hotel development in Long Branch. One idea Mr. Barry says he is considering is a condo conversion of one rental building at the complex.

It is still very hard to get construction financing, he noted, and conversion is less expensive than new construction. Also, the move would be in line with his notion of “efficient” apartments. The rental units are 700-square-foot one-bedrooms and 1,000-square-foot two-bedrooms.

“This could allow an entry-price point of something like $349,000, not $500,000,” he said, “which is more in line with today’s market.”

Mr. Barry said he and his brother Michael, the other principal at Ironstate, were also back at work on plans for the next phase of building at Port Liberté, the Hudson Riverfront complex in Jersey City. “I don’t know if we’ll start going in ’10,” he said, “but we are starting to work with architects again.”

At Henley on Hudson in Weehawken— part of the Port Imperial complex, which stretches into three towns along the Hudson — work is under way on a 27-unit building that is to open in July. It will be the fifth structure at Henley, with condos priced from the mid-$500,000s, for an 881-square-foot one-bedroom, to the $700,000s for certain two- and three-bedroom units. A sixth building is to be built later with the same configurations.

Michael Skea, the director of operations for Lennar Urban’s Northeast Division, which is developing Henley on Hudson in partnership with the Roseland Property Company, said that for the last 18 months the complex had had nothing available under $1 million. Penthouses and four-story town houses there go for more than $3 million.

“We get a lot of visitors who are enamored of the finishes and amenities we offer,” Mr. Skea said, “but they cannot pay prices that high. We wanted to press ahead with providing homes that are affordable to more buyers. ”

K. Hovnanian Homes, a large builder of single-family and condo developments, has several projects that continued to sell at a healthy pace over the past couple of years, said Steven Caporaso, an area vice president. As a result, construction has continued.

The final phase at Hunter’s Brook in Hackettstown, consisting of 21 single-family houses, is now under construction, for example. Eighty homes have sold since the project began marketing in late 2007, Mr. Caporaso said. This last group of houses is priced from $400,000 to the low $500,000s, for three- and four-bedroom homes. “We want to get the remaining homes ready for someone to purchase prior to April 30,” he said. That is the deadline for the federal tax-credit program for first-time buyers.

Homebuilders Turn to Private Equity for Financing

2010-01-25T13:45:00.001-05:00

Bloomberg

More than 40 U.S. homebuilders have teamed up with private equity firms to acquire and complete unfinished subdivisions as banks cut construction lending.

The investments will pay off for the builders and their investors if the prices are low enough and the locations are in areas where demand is recovering, said Megan McGrath, a home building industry analyst at Barclays Capital Inc. in New York.

“I’ve been getting the question: Why aren’t housing starts at zero?” McGrath asked. “The answer is, they’re probably as close to zero as they’re going to get and in some cases it still makes sense to build.”

Managers of at least 22 funds raised $12 billion in 2009 for development projects and other residential real estate deals, Bloomberg BusinessWeek magazine reports in its Feb. 1 issue, citing data compiled by Bloomberg, Institutional Real Estate Inc. of San Ramon, California, and Real Estate Alert, an industry newsletter in Hoboken, New Jersey. Those firms have invested with at least 42 builders, the data show.

Hovnanian Enterprises Inc., the nation’s seventh-largest homebuilder by revenue, last year announced joint ventures with two New York-based private equity firms, in which the investors provided at least 80 percent of the money for the developments. GoldenTree Asset Management and Hovnanian are working on 11 projects around Chicago and Palm Beach, Florida, while Angelo Gordon & Co., with $21 billion under management, teamed up for other projects in Florida.

“For every one that we’re doing business with, there are 10 more that we’re talking to,” Ara K. Hovnanian, chief executive officer of the Red Bank, New Jersey, homebuilder, said at a Nov. 17 conference in New York organized by UBS AG.

Building Permits

Home building permits climbed to 653,000 in December, the most since October 2008 and a sign of optimism about demand, the Commerce Department reported yesterday.

Steve McGee, principal of investment firm Developers Financial Solutions Inc. in Rancho Santa Fe, California, said he interviewed 30 builders at this week’s National Association of Home Builders convention in Las Vegas and found six viable partners, whom he declined to name.

“We saw an opportunity to provide financing at this stage of the recovery,” said McGee, whose firm has more than $1 billion to invest in residential and commercial real estate and Atlantic Beach vacation homes.

Slowing Bank Loans

The private equity firms are a new source of funding for the homebuilding industry, which has traditionally relied on bank loans and bond sales. Banks slashed lending to homebuilders because regulators pressured them to reduce real estate assets as defaults on construction loans climbed, said Robert Seiwert, vice president of the American Bankers Association.

“What got us into this situation was people making loans that shouldn’t have happened,” Seiwert said in a telephone interview from the organization’s headquarters in Washington.

Outstanding bank loans for land and new development sank to $113 billion in the quarter ending Sept. 30, down 44 percent from a peak of $203 billion in June 2008, according to Federal Deposit Insurance Corp. data. Loans for all construction and development fell to $492.2 billion from a peak of $629.5 billion in June 2008, the FDIC said Nov. 24.

The supply of new homes on the market rose to 7.9 months in November, compared with the five-year average of 7.2 months, according to the Commerce Department. With unemployment and foreclosures still at quarter-century highs, demand could remain weak for a while, especially with federal tax incentives for home buyers set to phase out in April.

Confidence Drop

Confidence among homebuilders fell this month to the lowest level since June, as traffic hit a 10-month nadir, the National Association of Home Builders said Jan. 19.

U.S. sales of new homes fell to an annual pace of 355,000 in November, down 11 percent from October, the Commerce Department reported Dec. 23. Homebuilders have seen orders and revenue decline since 2005, when 1.28 million new homes sold, according to the Census Bureau.

Grosvenor Investment Management of Philadelphia and KeyBank Real Estate Capital Residential Investment Partners, which raised $100 million in 2007, took almost two years to make their first investment, said John Hay, manager of the fund for KeyBank Real Estate Capital Markets, a private equity unit of Cleveland- based KeyBank NA.

‘Very Challenging’

The managers wanted to buy ready-to-build lots for about 20 cents on the dollar. They wouldn’t invest in markets such as Las Vegas, South Florida, or Southern California. So far, the fund has entered five deals totaling about $30 million each for subdivisions outside Atlanta, Denver, Philadelphia, Portland, Oregon, and Raleigh real estate in North Carolina.

“This investing, while it’s ahead of the game, is still very, very challenging,” Hay said.

Reuben S. Leibowitz, managing director of JEN Partners LLC, a New York-based private equity fund, said he invested $50 million in 2009 for land and construction partnerships in Southern California and Arizona, where he believes the buyers are coming back.

In May, Leibowitz bought Canta Mia, a 600-home “active- adult” community outside of Phoenix that caters to retirees. The original developer, Tousa Inc., filed for bankruptcy and Leibowitz acquired the project -- complete with model homes -- for less than the cost of improvements, such as roads and waterlines. He expects to get his money back in four to seven years, although he doesn’t think there are many other good deals out there. “There won’t be many people who are successful” at bottom-fishing in this market, he said.

At least one private equity fund has pulled up stakes. Rockpoint Group, a Boston investment firm, raised $470 million for a residential real estate fund from investors including a $270 million commitment from the California State Teachers Retirement System. In August, Rockpoint suspended the fund, returning the money to investors, after it failed to find enough workable deals.

30-Year Loans Now Below 5%

2010-01-22T21:34:00.000-05:00

The Washington Post

Rates for 30-year home loans fell below 5 percent this week but remained above last month's record lows.

The average rate on a 30-year, fixed-rate mortgage was 4.99 percent, down from 5.06 percent a week earlier, mortgage company Freddie Mac said Thursday.

It was the third straight weekly decline. The drop comes after interest rates fell in the bond market this week as concerns about the economy increased demand for the safety of government debt, which is closely tied to mortgage rates.

The average rate on 15-year, fixed-rate mortgages fell to 4.4 percent, down from 4.45 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.27 percent, down from 4.32 percent a week earlier. Rates on one-year, adjustable-rate mortgages dropped to 4.32 percent from 4.39 percent.

Borrowers can lower their interest rates by buying points, equal to 1 percent of the total loan amount. The nationwide averages in Freddie Mac's survey were 0.7 points for 30-year loans and 0.6 points for 15-year, five-year and one-year loans.

Falling mortgage rates might help bolster the nation's housing market as borrowing becomes less expensive for consumers. The decline in home-loan rates boosted the number of mortgage applications by more than 9 percent last week, according to data from the Mortgage Bankers Association.

The Mortgage Bankers Association's index of applications to purchase a home or refinance a mortgage rose 9.1 percent in the week ended Jan. 15, led by a surge in refinancing. The group's refinancing gauge gained 11 percent, while the purchase index advanced 4.4 percent.

After Months Of Declines, Foreclosures Jump In December

2010-01-14T10:08:00.001-05:00

USA Today

Foreclosure filings increased 14% in December from November, the first monthly increase since foreclosure activity peaked in July, according to a RealtyTrac report out Thursday.

Foreclosure filings were reported on 349,519 properties in December, which were also 15% higher than in December 2008, RealtyTrac said.

"It's somewhat startling to see these kind of numbers," says Brian Bethune at IHS Global Insight. "There are a few areas that are improving. New York has had no further deterioration. But the problem states, like Florida, California and Arizona, are still suffering."

After peaking at more than 361,000 homes in July, foreclosure filings had been falling because of trial loan modifications, state legislation extending the foreclosure process and a large volume of homes in the foreclosure pipeline, RealtyTrac CEO James Saccacio said in a statement.

Foreclosure activity in the fourth quarter decreased 7% from the third quarter, although it was still up 18% from the fourth quarter of 2008.

And after four consecutive month-over-month declines in California, foreclosure activity there in December increased nearly 9% from November. California's fourth-quarter foreclosure activity was still down 17% from the third quarter.

About 2.4 million homes are expected to be lost through foreclosure, auction and other means in 2010, according to Moody's Economy.com. That's despite the Obama administration's efforts to get banks to rework strapped borrowers' home loans into lower monthly payments. The goal is to prevent foreclosures by providing homeowners with more-affordable mortgages.

As of early December, more than 700,000 homeowners had received trial modifications. The Treasury Department will release updated numbers on Friday. "The foreclosure crisis continues on. I don't see any stabilization," says Mark Zandi at Moody's Economy.com. "The foreclosure crisis is in full swing, and the (mortgage) modification efforts aren't working that well."

The ongoing foreclosure crisis, he says, will continue to lead to falling home prices in spring and summer.

Filings were reported on 2.8 million properties in 2009, a 21% increase in total properties from 2008 and up 120% from 2007, according to RealtyTrac.

Some states did see foreclosure numbers continue to decline. In North Carolina, holders of Raleigh real estate saw a further decline in bank foreclosures, with a drop of 16.1% over 2008.

Foreclosure filings could ease as more banks agree to short sales, allowing delinquent homeowners to sell homes for less than the balance of their mortgage. The Obama administration is attempting to encourage short sales.

"We should also see more short sales, because lenders are becoming more comfortable with it, and it costs them less" than a foreclosure, Zandi says.

Foreclosure filings reached a record high in 2009, touching one of every 45 homes, according to RealtyTrac.

State	Total properties w/ filings	Change from 2008

California	632,573	20.8%

Florida	516,711	34.1%

Arizona	163,210	39.6%

Illinois	131,132	31.8%

Michigan	118,302	11.5%

Nevada	112,097	44.3%

Georgia	106,110	24.5%

Ohio	101,614	-10.5%

Texas	100,045	4.0%

New Jersey	63,208	1.1%

Virginia	52,127	6.4%

Colorado	50,514	0.2%

New York	50,369	0.7%

Pennsylvania	44,732	20.2%

Maryland	43,248	33.7%

Indiana	41,405	-9.9%

Tennessee	40,733	-7.8%

Massachusetts	36,119	-18.5%

Washington	35,268	35.3%

Wisconsin	35,252	79.0%

Oregon	34,121	89.6%

Minnesota	31,697	56.3%

Missouri	28,519	-8.8%

North Carolina	28,384	-16.1%

Utah	27,140	82.9%

South Carolina	25,163	67.8%

Alabama	19,896	156.3%

Connecticut	19,679	-10.2%

Idaho	17,161	101.6%

Arkansas	16,547	15.9%

Oklahoma	12,937	3.8%

Louisiana	11,750	64.8%

Kentucky	9,682	33.7%

Kansas	9,056	45.6%

Hawaii	9,002	182.6%

New Mexico	7,212	93.5%

New Hampshire	7,210	8.7%

Iowa	5,681	5.5%

Mississippi	5,402	135.6%

Rhode Island	5,065	-23.1%

District of Columbia	3,235	-22.6%

Maine	3,178	11.5%

Delaware	3,034	20.6%

Alaska	2,442	25.5%

Nebraska	1,845	-42.2%

West Virginia	1,479	115.9%

Montana	1,373	10.2%

South Dakota	765	90.3%

Wyoming	717	5.9%

North Dakota	390	5.1%

Vermont	143	4.4%

U.S. total	2.8 million	21.2%

Source: RealtyTrac

Job Growth Erodes as Housing Bust Pushes Mobility to Record Low

2010-01-13T20:41:00.000-05:00

Bloomberg

Raul Lopez, laid off from three construction jobs since October 2007, is focusing his search for work near Antioch, California, because his $392,000 mortgage is almost triple the price his home there would sell for today.

“If it wasn’t for the house, I’d probably move closer to Oakland, Hayward, San Leandro, places where there are jobs,” said Lopez, 36, who is married with four daughters.

The ability to relocate for employment, which helped the U.S. recover quickly after previous deep recessions, is the latest victim of the housing bust. About 12.5 percent of Americans moved in the year ended March 2009, the second-lowest ever, estimates Brookings Institution demographer William Frey, after a 60-year record low of 11.9 percent the previous year.

Local moves may rise “a little bit” in the 12 months that end this March, with long-distance migration “staying flat,” Frey said. “Both will be below normal levels from earlier in the decade.”

Some households are staying put because they owe more on their mortgages than their properties are worth; others have trouble selling houses in depressed areas, economists say. The S&P/Case-Shiller composite index of home prices in 20 U.S. metropolitan areas was down 29 percent in October from its July 2006 peak.

“One of the hallmarks of America’s labor market is a high level of mobility,” said Joseph Stiglitz, a Nobel Prize-winning economist, in a Jan. 3 interview in Atlanta, where he was speaking to an economics conference. “We are about to lose that.”

Stagnant Workforce

The stagnant workforce may raise the long-term trend rate for unemployment by 1 percentage point and lower economic growth 0.3 percent a year through 2012, said Michael Feroli, an economist in New York for JPMorgan Chase & Co. It has already contributed to keeping the jobless rate as much as 1.5 percentage points higher than would have been suggested by the depth of the recession, Peter Orszag, director of the U.S. Office of Management and Budget, estimated in July.

The U.S. economy shrank 3.8 percent in the 12 months that ended in June, the worst performance since the 1930s. Unemployment reached a 26-year high of 10.2 percent in October before sliding to 10 percent in November. The rate stayed at 10 percent in December, according to the median estimate of 72 economists in a Bloomberg News survey. The Labor Department will release the data on Jan 8.

Pharmaceutical and biotechnology companies have lost potential employees in the past two years as candidates are stuck with houses worth less than their mortgages, said Deborah Coogan Seltzer, a vice president in Atlanta for the Dallas-based executive search firm Pearson Partners International. Some prospects also worry it may take a year or more to sell their homes, even if they have equity in the properties, she added.

Candidates Withdraw

“It’s a constant factor,” Seltzer said. “Conservatively, in at least 70 percent of the searches I’ve worked on in the last 12-to-18 months at least one or two candidates have withdrawn from the process after they’ve investigated their real-estate situation.”

Some companies are allowing recent hires to stay where they are and use a combination of telecommuting and traveling, said Kevin Kelleher, president and chief executive officer of Danbury, Connecticut-based Cartus Corp., which specializes in relocation.

Employers and their prospects are “thinking about assignments or commuting policies rather than picking up the family and moving on,” he said.

Seltzer and Kelleher declined to provide names of specific companies.

Labor-Market Recoveries

The ability and willingness of workers to relocate has contributed to labor-market recoveries following recessions that ended in March 1975 and November 1982, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody’s Economy.com. The unemployment rate fell 1.6 percentage points to 7.4 percent in May 1976 from a year earlier and dropped 2.5 percentage points to 8.3 percent in December 1983 from the previous December.

While some economists say the recession that began in December 2007 may have ended last summer, unemployment will fall only 0.8 percentage point to an average of 9.2 percent in 2011, according to a December Bloomberg News survey of 46 economists.

“You don’t have to be a rocket scientist” to know that unemployment will be higher and “the noninflationary speed limit, or what economists call the potential growth rate of the economy, is going to be lower as a result of the housing-related decline in labor mobility,” David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto, said in a Jan. 4 telephone interview.

‘Negative Equity’

Almost 10.7 million homes, or 23 percent of all mortgaged properties, were worth less than the debt owed on them at the end of the third quarter, according to a Nov. 24 report from First American CoreLogic. An additional 2.3 million mortgages are approaching “negative equity” as loan defaults mount nationwide, the Santa Ana, California-based real-estate research company said.

Sixty-five percent of Nevada homeowners owed more than their houses were worth, the highest rate in the nation, according to the report. Arizona ranked second, at 48 percent, followed by Florida, Michigan and California.

States that grew the fastest during the 2002-2006 housing bubble, including Florida and Nevada, are now experiencing reversals in population trends. The number of people in Florida, where unemployment is 11.5 percent, fell 58,294 in the 12 months ended April 2009, the first decline since 1946, the University of Florida Bureau of Economic and Business Research estimated in August.

Can’t Sell

More people might have left if they had been able to sell their homes, said Jack McCabe, president of McCabe Research & Consulting in Deerfield Beach, Florida, which specializes in real estate.

“Loan modifications have been of insignificant help,” he said.

Through November, U.S. lenders had permanently renegotiated about 31,000 of the 4 million mortgages targeted for relief by the Obama administration’s foreclosure-prevention plan.

Housing woes have exacerbated a decline in worker mobility that began in 1951, when 21 percent of Americans moved, according to the Census Bureau. More families now depend on two incomes, which makes moving more complicated, said Peter Francese, a demographic-trends analyst in Exter, New Hampshire, for New York-based advertising agency Ogilvy & Mather Worldwide.

Aging Population

The aging U.S. population also reduces mobility, he said. The largest age group is 45- to 55-year-olds and the fastest- growing segment is 55- to 65-year-olds, both of which have established family and social networks that complicate relocation, Francese said.

Out-of-state moves, usually associated with job changes, remained at a record low 1.6 percent of the population for a second year in the 12 months ended March 2009, Brookings’ Frey estimates.

Anecdotal evidence suggests an even lower rate for the full year. Shipments handled by movers and paid for by individuals in the first half dropped 18 percent from January-June 2008, while employer-paid moves fell 27 percent, according to the American Moving & Storage Association, an industry trade group based in Alexandria, Virginia.

“This is our first national slump caused by a housing bubble and that ties down workers,” said Nobel Prize-winning economist Paul Krugman in a Jan. 4 interview. “It is a transitory thing, but transitory can mean several years.”

30 Year Mortgage Rates Fall To Average Of 5.09%

2010-01-08T11:09:00.001-05:00

USA Today

Rates for 30-year home loans inched downward this week, first decline in a month, but remained above last month's record lows.

The average rate on a 30-year fixed mortgage was 5.09% this week, down from 5.14% a week earlier, mortgage company Freddie Mac said Thursday.

Rates dropped to a record low 4.71% in early December, pushed down by an aggressive government campaign to reduce consumers' borrowing costs, but then rose steadily the rest of the month.

The average rate on a 15-year fixed-rate mortgage fell to 4.5% this week, from 4.54% last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.44%, unchanged from a week earlier. Rates on one-year, adjustable-rate mortgages fell to an average 4.31% from 4.33%.

The rates do not include add-on fees known as points. One point is equal to 1% of the total loan amount.

The nationwide fee for loans in Freddie Mac's survey averaged 0.7 point for 30-year and 15-year loans and 0.6 point for five-year and one-year loans.

Freddie Mac collects mortgage rates Monday through Wednesday each week from lenders around the country. Rates often fluctuate significantly, even within a day, often in line with interest rates on long-term Treasury bonds.

The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out in the spring. The goal of the program is to make home buying more affordable and prop up the housing market, including Raleigh real estate.

The central bank's policymakers have been conflicted about whether to expand or cut back a program intended to drive down mortgage rates and bolster the housing market, according to meeting minutes released Wednesday.

Some Fed policymakers argued that the program might need to be expanded and extended beyond its current end date of March 31, arguing that the additional dose of stimulus would be especially needed if the economic recovery were to weaken.

However, one member thought the program could be scaled back given the improvement in economic and financial conditions.

Getting the housing market back on firm footing is key to a lasting recovery. The collapse of the housing market, which dragged down home prices, was the catalyst for the longest and worst recession to hit the country since the 1930s.

Fed Reserve Officials Have Differing Views On Mortgage Buyout Program

2010-01-07T14:33:00.001-05:00

USA Today

Some Federal Reserve policymakers last month were conflicted over whether to expand or cut back a program intended to drive down mortgage rates and bolster the housing market, according to a document released Wednesday.

Minutes of the Fed's closed-door meeting on Dec. 15-16 revealed that a "few members" thought that the Fed's $1.25 trillion program to buy mortgage securities from Fannie Mae and Freddie Mac might need to be expanded and extended beyond its current end date of March 31. Such an additional dose of stimulus would be especially needed if the economic recovery were to weaken, they argued.

However, one member thought the program could be "scaled back" given the improvement in economic and financial conditions.

The debate over the future of the program comes amid uncertainties about the vigor of the budding economic recovery.

At the December meeting, Fed policymakers decided not to make any changes to the program. At their September meeting, they opted to slow the pace of the purchases, wrapping them up by the end of March, rather than the end of 2009.

The minutes don't identify speakers by name but seeks to provide a more detailed account of the Fed's private discussions.

Some Fed officials remained concerned about the economy's ability to mount a self-sustaining recovery once government supports are removed. To that end, those officials worried that improvements seen in the housing market might be "undercut" this year as the Fed's mortgage-buying program winds down, the government's home buyer tax credits expire at the end of April and home foreclosures grow.

Getting the housing market back on firm footing is a key ingredient to a lasting recovery. The collapse of the housing market, which dragged down home prices with it, was the catalyst for the longest and worst recession to hit the country since the 1930s.

"Generally the outlook was for gains in housing activity to continue. However, some participants still viewed the improved outlook as quite tentative and again pointed to potential sources of softness," the minutes said.

To nurture the recovery, the Fed at the December meeting kept its key bank lending rate at a record low near zero and pledged to hold it there for an "extended period." The goal: low interest rates will entice people and businesses to boost spending, which will fuel economic growth.

Economists said the Fed is all but certain to leave rates at record lows at its next meeting on Jan. 26-27 and probably for a good chunk of this year.

"Overall, there is nothing here to suggest that interest rates will rise for quite some time," Paul Ashworth, economist at Capital Economics., said of the Fed minutes. Ashworth is among the economists predicting economic growth will slow in the second half of this year as President Barack Obama's $787 billion stimulus package of tax cuts and increased government spending fades.

Most Fed officials don't currently see inflation as a problem because companies have "little ability to raise their prices" in the fragile economic environment. But they had mixed views about inflation risks.

Some noted that rising prices of oil and other commodities could boost inflation pressures down the road. Others thought investors' expectations of inflation could edge up because of large federal government budget deficits and vast sums of money the Fed pumped into the economy to fight the financial crisis.

However, others predicted that the sluggish recovery and "slack" in the economy — meaning factories operating well below capacity and the weak labor market — would keep inflation under wraps.

At the December meeting, Fed staff gave several presentations on research into "inflation dynamics."

The biggest challenge facing Fed Chairman Ben Bernanke and his colleagues is to decide when to start boosting interest rates. Moving too soon could short-circuit the recovery. Waiting too long could unleash inflation.

Small Improvements That Sell

2010-01-06T01:21:00.000-05:00

MSN

With very little effort, you can transform an average house into an above-average property that is sure to get second looks from buyers. Follow these guidelines to make sure your property stands out above the rest:

Paint inside and out
Fresh paint is the most cost-effective and profitable improvement you can make, even if your home doesn't need a new coat. Paint the interior walls a neutral color and the ceilings white to make rooms look bigger.

New lights
Replace outdated fixtures. This inexpensive improvement can update old decor that might have discouraged buyers.

New flooring
Install new carpet, linoleum, or tile, and refurbish hardwood floors if needed. Choose a neutral color for new carpeting. New flooring will increase the market value of your home, while shabby floors can kill a sale.

Planted landscape
Attractive front and back yards boost the value of any property. Mow the lawn, trim shrubs, and plant new bedding flowers. Clean up perennial beds. Plant some trees if the yard is barren, especially in the front parkway. Sweep the patio or deck and decorate with potted plants and flowers.

Inspection

At a cost of $200-$300, it could be worth it to hire your own home inspector to give your entire home a thourough going-over before any potential buyers do. This is especially true if you have let any routine maintenance fall by the wayside for a number of years.

Completed repairs
Before listing your home for sale, make all minor repairs and catch up on maintenance. If you've deferred maintenance, get a professional home inspection. If the inspection reveals problems, make the repairs before listing the home. If you don't, the buyer will probably discount the offer price for more than the cost of repairs or replacement.

A clean garage
If you use your garage for storage, clean it out and rent a storage space. Paint the interior white. If your garage is unfinished, install wallboard or build storage shelves on the back wall. A clean garage will help solidify a buyer's impression of a home in move-in condition.

As you can see, there are many small improvements you can do yourself on a limited budget without venturing into an entire home remodeling project.

Price Data Is Good News For Home Buyers

2009-12-29T16:25:00.000-05:00

Wall Street Journal

Homes are now cheap.

No, not everywhere in the country (more about that later). And, even after the latest Case-Shiller data, it's anyone's guess when they might actually turn around and start rising steadily again. It could be years.

But if you've been thinking of buying a home to live in, the current meltdown is a big opportunity.

You might not know it from the coverage of the latest data. Too many, as usual, are focused on the trees instead of the forest. The 10 and 20-city composite indexes were unchanged between September and October. And the numbers were lower than a year ago, but the rate of decline seems to have slowed: Two facts that are both obvious and practically useless. Indeed the latest survey contains a whole truckload of information for all those who prefer data to knowledge.

But long-term fundamentals are more important than the short-term noise. And it's generally a mistake to pay too much attention to doomsayers or to overthink these things.

Here's some home truths.

Real estate prices in the Case-Shiller 10-city index have now fallen by a stunning 30% from their 2005 peak. Nothing like it has been seen since the Great Depression–and, according to some sources, not then either. Obviously for anyone who bought a home at the peak of the market this has been a disaster. But for those thinking of buying a home now this is exceptionally good news.

And at the same time, mortgage rates have also plummeted. In 2006 you had to pay an average of about 6.4% on a 30-year fixed loan, according to the Federal Reserve. Right now you can get deals for about 5%.

Put the two together, and it's a winning combination.

The Case-Shiller 10-city data go back to 1987. I ran the numbers comparing the index values, mortgage rates and average weekly earnings. Net conclusion: On average–an important point I'll return to shortly–buying a home now is as cheap as it was in the mid-1990s, when houses were an absolute steal.

No, the Case-Shiller data aren't perfect. The biggest complaint is that they are weighted too much towards the coasts and the big "bubble" cities like Miami, Las Vegas and Phoenix.

So I decided to run the same analyses–average prices, mortgage rates and weekly earnings–for the home price data tracked by the U.S. Census. Those numbers go back further than Case-Shiller, to 1972.

You can see the results in the two charts here.

The top chart simply compares the average home price to average weekly earnings. Yes, there has been a clear, gently rising long-term trend: Over many decades people have been choosing to spend more on housing, buying bigger and better homes. But the bubble, and subsequent collapse, still stand out clearly. By this measure, median homes nationwide today are about as cheap–when compared to earnings–as they were in the early 1990s.

Yet back then mortgage rates were around 8, 9 or even 10%.

If you buy an average home today, and take out a 30-year mortgage at 5%, the annual bill for interest and repayment of principal will come to about 19 times typical weekly earnings (If you get the $8,000 refundable tax credit too, it drops below 18 times). As you can see from the bottom chart, we haven't seen it that low since the early 1970s.

You can hear the objections. Doomsayers ask: What about these waves of mortgage resets coming in the next two years? What about all the unemployment? And the foreclosures? And so on.

These are all valid arguments for refusing to buy homes when they are expensive, or even averagely priced. But the whole point about markets is that they adjust. Prices are now cheap. They reflect this bad news, and more. If you have a stable income, and you can get a 30-year mortgage at 5% or so, and you are willing to drive a hard bargain on a home in this market, this is your time.

Over and over again, history suggests that the best investments are the ones no one wants–gold when it was $260 an ounce, Amazon.com when it fell below $10 in 2002, Hong Kong shares during the SARS "crisis" in 2003, and so on. If an investment feels comfortable, it's should make you nervous. If it makes you really nervous, that's probably good.

The biggest objection, or caveat, is one I hinted at earlier. These are average prices - check with a realator for prices on Raleigh real estate. The variations are truly remarkable. Prices in places like Miami, Las Vegas and Phoenix have roughly halved from the highs in early 2006, according to Case-Shiller. Meanwhile in cities like New York and Boston they have fallen by a fifth or less. It's hard to argue that some of the most resilient areas are cheap. New York real estate prices are still up about 75% since the start of the decade. Maybe they have much further to fall.

But outside of these hot spots, real estate is now cheap.

Citigroup To Suspend Foreclosures For 30 Days

2009-12-18T10:51:00.000-05:00

USA Today

WASHINGTON — Citigroup will suspend foreclosures and evictions for 30 days in a temporary break for about 4,000 borrowers during the holiday season.

The New York-based bank said Thursday the suspension will run from Friday through Jan. 17. It applies only to borrowers whose loans are owned by Citi. Borrowers who make payments to Citi but whose loans are owned by other investors are out of luck.

"We want our borrowers to have a much less stressful time, to spend their time with their families during the holidays as opposed to worrying about their homes," Sanjiv Das, head of the company's mortgage division, said in an interview.

The suspension means Citi will halt foreclosure sales and stop evicting homeowners from properties it has already seized. The company projects it will help 2,000 homeowners with scheduled foreclosure sales and another 2,000 that were due to receive foreclosure notices including holders of Raleigh real estate.

Das also said the company is working on "some long-term fundamental alternatives" to foreclosure, but declined to be specific. "We know that moratoriums are not permanent solutions," he said.

Most major lenders suspended foreclosures last winter while the Obama administration developed its $75 billion loan modification program. Foreclosures picked up again after those suspensions lifted. In recent months, they have fallen as banks evaluate whether borrowers qualify for the government program.

Citi has enrolled about 100,000 borrowers in the Obama program, but had made only about 270 of those modifications permanent as of the end of last month, according to a Treasury Department report. But Das said the low number resulted from a "reporting error" and said it will rise dramatically by year-end.

"I have put a lot of pressure on my team to make sure that there is almost nothing left in the pipeline," he said.

Homebuyer Tax-Credit Extension Fails as Catalyst

2009-12-17T12:26:00.000-05:00

Bloomberg

President Barack Obama’s extension last month of a tax credit for first-time homebuyers failed to stir optimism among homebuilders or stock investors about the industry’s prospects.

The National Association of Home Builders/Wells Fargo Housing Market Index and a Standard & Poor’s index of homebuilding shares dropped after Obama signed the legislation on Nov. 6. The chart tracks these indicators since 2000.

Homebuyers received another five months, until April 30, to take advantage of the government’s $8,000 credit. They also became eligible for an additional $6,500 credit if they owned their previous residence for at least five years.

“The extension has not materially helped traffic or sales despite the program’s expansion,” Carl Reichardt, a Wells Fargo analyst, wrote yesterday in a report.

The NAHB/Wells Fargo index, an indicator of builders’ confidence, fell to 16 this month from 17 in November. None of the 47 economists in a Bloomberg News survey expected the decline. Readings below 50 show that most participants are pessimistic.

S&P’s industry gauge, consisting of builders in the S&P 500, MidCap 400 and SmallCap 600 indexes, dropped 8.4 percent from Nov. 6 to yesterday. S&P’s broadest index of U.S. stocks rose 4 percent during the period.

The shifts in sentiment and share prices were at odds with the growth in November housing starts and building permits that the Commerce Department reported today. Starts rose 8.9 percent to an annual rate of 574,000 homes. Permits climbed 6.9 percent to a 584,000 pace including such items as vacation homes in Atlantic Beach NC, the fastest since November 2008.

Annual Remodeling Report Finds 4 Best Improvements For Selling Your Home

2009-12-12T12:57:00.000-05:00

MSN

House prices are still dropping, so it pays to know which upgrades will deliver the best return when you sell your home. An annual remodeling report finds 4 basic replacements are likely your smartest choice.

Remodeling is a better investment in some years than others. This year is among the worst if you’re hoping to recoup much money when you sell, says a newly released report. Homeowners are getting back just 64%, on average, of a project’s cost, compared with 87% in 2005, according to Remodeling Magazine’s 2009-2010 Cost vs. Value report.

Some projects pay back better than others. You get more bang for the buck putting money into a basement or attic upgrade than adding a wing to the house. Some of the highest-return projects include a deck addition and quick, conservatively priced replacements of old siding, entry door or windows. (If you want a different perspective, personal-finance guru Liz Pulliam Weston calls remodeling “a waste of money.”)

The report compiles responses from about 4,000 members of the National Association of Realtors in 80 cities to survey questions about 33 hypothetical projects. “I think what the real-estate agents are saying is you’re taking a big risk if you’re buying these high-ticket items, because the market is slow. Buyers are looking for utility,” says Sal Alfano, the magazine’s editorial director. “They’re not so wowed these days as they were three or four years ago.”

A retreat from overbuilding
Some contractors are dropping their rates to get work, so it might seem a good moment, if you have the money, to do a big, blow-out addition. And maybe it is, if you can keep the house long enough. But today, a high-end master suite remodel, for example, returns just 56% of the cost, on average, compared with 80% in 2005.

“You’re not seeing the big 750-square-foot additions being put on the side of a house like you were a few years ago,” says Martin Conneely, owner of Conneely Contracting, in Arlington, Mass. “Our biggest (jobs) right now are maintenance replacements (of windows, doors, siding and roofing), basement renovations and moderately priced upgrades in the kitchen and bath.”

Despite widespread talk of falling labor prices among remodelers, the cost of construction overall hadn’t changed much. Return on investment (ROI) is dropping because, in a market flooded with foreclosures, even if labor costs are dropping, the price of existing homes is at such a discount that anything newly built can’t compete.

The 22-year-old Cost vs. Value survey makes clear that return on investment depends greatly on where you live. The highest payback is in the Pacific region (Alaska, California, Hawaii, Oregon and Washington). There, although costs are double the next-most-expensive region (the Mid-Atlantic, including New Jersey, New York and home remodeling Pennsylvania), high resale values more than compensate.

Peter Michelson, CEO of Renewal Design-Build in Decatur, Ga., cautions homeowners to be aware that projects described and priced in this report can — and often do — cost considerably more than the amounts given.

ROI is better in the West South Central (Arkansas, Louisiana, Texas, Oklahoma), South Atlantic (Washington, D.C., Delaware, Florida, Georgia, Maryland, the Carolinas, Virginia, West Virginia) and East South Central (Alabama, Kentucky, Mississippi, Tennessee) regions.

Residents of the Mountain states (Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico) and New England (Maine, Massachusetts, Connecticut, New Hampshire, Rhode Island, Vermont) enjoy average returns.

It’s hardest to make a buck back on your project in the Middle Atlantic, West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, the Dakotas) and East North Central (Indiana, Michigan, Ohio and Wisconsin) regions.

The math didn’t always come out so poorly. As recently as 2005, few homeowners bothered to figure out if their plans meant overbuilding for the neighborhood, Alfano says. They just commissioned the work they wanted and assumed prices would rise to cover their costs.

They were largely correct until 2006, when payback began shrinking along with the scale of jobs that homeowners were undertaking. “The projects that were evaluated as having the most return were not kitchens and baths so much anymore. All of a sudden it was these exterior replacements: roofing, siding and windows,” Alfano says.

It was the beginning of the end of the housing boom. “Today, resale value has come to the forefront. People are much more conscious of building for the neighborhood, and they’re worried about their mortgage rates and their jobs.”

Basic replacements rule
As a group, low-cost replacements — new siding, windows, doors and roofing — deliver the best bang for the buck now, a considerably better payback than from a two-story remodel or a kitchen remodel.

Given great improvements in materials, you can replace your inefficient 10- or 15-year-old products with highly efficient ones for a decent return when you sell. In addition, the improvements help you save on heating and cooling bills. Replacing leaky windows with highly efficient newer ones is a good example. The technology behind the glass and frames has so improved that you’re tightening up your home’s weatherproofing in the process. You get more comfort and, from the real-estate agent’s point of view, new windows show off your house from the street.

Replacement projects included in the Cost vs. Value survey all cost less than $20,000 and most cost considerably less. They instantly enhance curb appeal, boosting a home’s marketability, and they require little maintenance once installed - all of which are better prospects than with a home addition. A bonus: Most of these replacements qualify for a federal tax credit for energy efficiency (not included in Remodeling Magazine’s ROI calculations).

1. Replace the front door.

    * The absolute best return on the money of any of the projects surveyed — 129% of cost — is gained by replacing a beat-up front door with a $1,200 steel-shell door filled with foam insulation.
    * A new fiberglass door (more expensive, at $3,490) returns less, about 65%. (Fiberglass is the new chic building material because it’s rugged and durable, can be painted and will mimic almost any wood. Unlike wood, it doesn’t crack, warp or shrink and needs zero maintenance.)
    * Spend about $7,500 on an entire new entrance, including a widened opening, a solid-core wood door and high-end glass, new lighting and better locks, and you’ll recoup 69%, on average.

2. Replace home siding

    * Replacing old siding with a durable fiber-cement product ($13,287) recoups about 84% at resale.
    * Use vinyl siding ($10,607) to get an 80% return.
    * Foam-backed vinyl ($13,022) costs more and earns back less — roughly 79% — but it is much more efficient at insulating a home.

3. Replace windows. Three of the four window-replacement projects considered in the survey pay back about 77%:

    * Wood-trimmed windows ($11,700).
    * Lower-end vinyl windows ($10,728).
    * Windows trimmed in higher-end vinyl ($13,862).
    * The fourth project, higher-end wood-replacement windows ($17,816), has a return of about 72%. Fiberglass windows weren’t included in the study.

Replace the roofing: Spend $19,731 on new fiberglass asphalt shingles and you’re likely to recoup about 67% of the cost.

    * A higher-end roof replacement using standing-seam metal ($37,359) pays back about 61% of the cost, agents told the survey.

Additions aren’t cost-effective
Except for a new deck, which pays back nicely, adding to a home’s footprint brings a poor return these days. There are better ROIs for Raleigh real estate.

A new deck
    * Wood is high-maintenance, but homebuyers love it: A new wood deck ($10,634) returns 81%.
    * New outdoor decks of midrange composite planks ($15,373) return around 71% of the cost at resale.
    * A higher-grade composite ($37,745) brings an ROI of about 61%.

Other additions
    * Adding a 200-square-foot sunroom ($73,167) recoups 51%. [Find a Sunroom Builder in Grand Rapids Michigan]
    * A high-end ($225,995) master suite project, adding 640 square feet to the house, including a bath with walk-in shower and stone walls, brings a 56% return.
    * A less ambitious, less costly ($103,696), 640-square-foot master suite addition including whirlpool bath and ceramic tile recoups 65%.
    * A garage addition ($87,230) earns back about 56%.
    * A high-end bathroom addition ($75,812) earns about 58% at resale.
    * Adding a midrange, 6-by-8-foot full bath ($39,046) recoups about 60%.
    * Add a midrange two-story wing ($156,309) to the house, including 24-by-16-foot first-floor family room and second-floor bedroom and full bath, for a return of about 69%.
    * A midrange family room addition ($82,756) returns around 65% of the cost.
    * Adding a sunroom or home office were the projects that yielded the least payback, presumably because these special-purpose rooms appeal to fewer buyers and are in less demand.

Best use of the money (besides replacements)
Upgrading existing space, such as a bathroom remodel, is the best bet for recouping cost. It makes sense: Pouring a foundation, framing a structure and bringing in electricity and plumbing are among the most expensive aspects of a building project. When you can largely skip these steps and increase your usable space, the payback is richer:

    * An attic conversion, including a 15-by-15-foot bedroom with dormer and a 5-by-7-foot bath with shower ($49,346) returns comparative gold: 83% return, on average. Agents in several cities said this job would return more than 100%.
    * A basement ($62,067) remodel —a 20-by-30-foot entertainment room and 5-by-8-foot full bath — recoups about 75% of its cost.
    * A midrange 5-by-7-foot bathroom remodel ($16,142) with standard fixtures and trim has a 71% ROI.
    * Expanding that bathroom to 100 square feet ($52,295), including moving plumbing and wiring and adding higher-end cabinets and fixtures, brings a 62% ROI.

Kitchens and baths: Scaled back but ever popular
High-end kitchens and baths are fading in popularity, replaced by “very practical things,” Michelson says. “The $400,000 and $500,000 jobs are few and far between. The jobs between $50,000 and $200,000, we’re doing lots of those.”

Bath and kitchen remodeling hasn’t stopped, since these projects maximize the enjoyment of the most-used spaces in a home. But “people are definitely being smarter with their money,” Conneely says. “For instance, a $75,000 remodel five years ago? That same client would today spend $50,000.” People who blithely bought the best of everything now pursue the same look by choosing materials judiciously.

    * A minor kitchen upgrade ($21,411) installing new cabinet fronts, laminate counters and other cosmetic improvements is a decent investment, at 78% ROI.
    * A major kitchen remodel ($57,215) using midrange materials — semi-custom cabinets and laminate counters — pays back about 72%.
    * A high-end major kitchen remodel ($111,794) with top-of-the-line cherry cabinets, stone counters, glass backsplash and expensive, built-in appliances, pays back just 63%.

10 Questions Regarding The Housing Market

2009-11-27T17:46:00.001-05:00

The Wall Street Journal

The U.S. housing market has been in a slump for the past four years. When will it ever end?

In recent years, real estate has proven as jittery and unreliable as any other market. The average U.S. home price nearly doubled between January 2000 and April 2006, according to the First American LoanPerformance index. Since then, the average has fallen about 30%. The drop has been 53% in the Las Vegas metropolitan area and 39% in Miami, where about a quarter of all households with mortgages are behind on their payments or in foreclosure. The value of your home might be determined more by whether the neighbors keep their jobs than whether the house has ample light and closet space.

Here is a guide to navigating a fractured and volatile market:

1. Is the housing market getting better?

It has shown some signs of healing this year, but the much-touted recovery is tentative and fragile.

Home sales have increased from the severely depressed levels of 2008. The inventory of unsold homes listed for sale also is down. Bidding wars are breaking out for foreclosed homes in the sorts of neighborhoods (near jobs and decent schools) that attract both first-time buyers and investors seeking rental properties.

But more than 6.7 million U.S. households with mortgages, or about 13%, are behind on their payments or are in the foreclosure process, according to the Mortgage Bankers Association. Eventually, many of them will lose those homes, sending more supply onto the market. Unemployment has continued to rise, and the housing market is unlikely to show a sustained recovery until job growth resumes.

While the supply of middle-class homes on the market has declined somewhat, it remains ample in most places. And there is a huge glut of high-end houses for sale in many areas. That means prices of high-end homes might still have a long way to fall.

2. When will housing bottom out?

There probably won't be any clear turning point. Monthly indicators, such as home sales and prices, tend to bounce erratically from month to month, making it hard to discern the underlying trend. And the housing bust will end at different times in different places. House prices already might have bottomed out in the coveted Virginia suburbs with short commutes into Washington, D.C., for instance. But it probably will be years before all of the unsold condos find buyers in parts of Florida.

Generalizations about states or metropolitan areas don't say much about what is happening in your neighborhood. In Summit, N.J., known for good schools and an easy, 45-minute train commute to Manhattan, the median home price in September was up 1.2% from a year earlier, according to Otteau Valuation Group, an appraisal company. In Atlantic City, N.J., which suffers from too much speculative building of condominiums and weak demand for vacation homes, the median price is down about 12% from a year ago.

3. What signals should I watch to determine whether my local market is improving?

One way to get a sense of supply is to ask a good local real estate agent for stats on how many homes are listed for sale in your town and how many months it would take at the current sales rate to absorb that supply. Anything over about six months generally is considered high, meaning that sellers might have to cut prices. Another way to get a sense of a neighborhood's health is to count the number of for-sale signs and vacant houses. If there are more than a couple vacant homes in a block, that might be a bad sign, particularly if no one is taking care of them.

The supply of homes listed for sale has fallen very sharply in some areas. But the supply is likely to balloon again in many areas with a renewed surge in foreclosures. Many local newspapers provide information on foreclosure filings.

Demand depends heavily on the job market. The U.S. Bureau of Labor Statistics provides unemployment rates by metropolitan area. In September, they ranged from 2.9% in Bismarck, N.D., to 30% in El Centro, Calif. State and local agencies provide job-market data, too. Celia Chen, a housing economist at Moody's Economy.com, says help-wanted signs can be a useful local indicator; if you start seeing more of them around your neighborhood, that is a sign that business in your area could be starting to recover.

4. How can I figure out the value of my home?

You never know for sure what a home will fetch until you put it on the market, and then it is partly a matter of luck. Will the eager buyer who shares your taste in home style and neighborhood show up on day one or day 200?

Some Web sites -- including Zillow.com, HomeGain.com and Cyberhomes.com -- provide estimates of individual home values. These estimates are largely based on recent sales of nearby homes, and in some cases they are wildly off the mark. But they often provide a ballpark idea of a home's value.

You might come closer to the real value by talking to a local agent and looking at recent prices for homes that you know are very similar to yours. If you want to be more scientific and don't mind paying a few hundred dollars, hire a professional appraiser.

5. Does it matter whether I'm "under water"?

At least you have plenty of company. About 20% of owners of single-family homes with mortgages owe more than the current estimated value of their homes, according to Zillow.com.

If you can afford your monthly payment and don't need to move soon, that might not be a big problem. But it is hard, and sometimes impossible, to refinance a mortgage if you are under water, and you will take a bath if you have to sell the home now. Some people who can afford to make their monthly mortgage payments are deciding it doesn't make sense to do so because they don't expect their home values ever to recover to past peaks, and they could rent similar houses for much lower monthly costs.

6. If I lose my home to foreclosure, how long will it take to repair my credit record?

It probably will be three to five years before you can qualify for a home mortgage insured by the government, depending on your circumstances, and that assumes you have re-established a record for paying your bills on time. The foreclosure will remain a blot on your credit record for seven years, likely raising your interest costs even if you do get another loan. If you pay bills on time, keep your credit-card balances low and don't apply for too many cards, you can make a "slow, gradual improvement" in your credit score, says Tom Quinn, a vice president at Fair Isaac Corp., which provides tools for analyzing credit records.

7. If I'm renting, is now a good time to buy a house?

It may well be. Prices in most areas are well below their peaks, even if they haven't hit bottom. Don't kid yourself that you can time the bottom of the market perfectly. But don't feel any pressure to buy in a hurry, because the supply of housing is likely to remain ample for years in many areas.

Generally, it doesn't make sense to buy unless you expect to remain in the house for at least four or five years, because the transaction costs -- including commissions for real estate agents and mortgage fees -- are heavy.

But now is clearly a good time to rent. Many landlords need tenants badly. The national apartment-vacancy rate in the third quarter was 7.8%, the highest in 23 years, according to Reis Inc., a New York research firm. So landlords are cutting rents and offering such sweeteners as free flat-screen televisions or several months of free rent to retain or attract tenants. Some owners of condos will "cut their throats to get some kind of rental income to cover part of their expenses," says Jack McCabe, a real estate consultant in Deerfield Beach, Fla.

8. Can I get a tax credit if I buy a home now?

Under an expanded and extended program approved by Congress earlier this month, tax credits are available to many people who buy or sign a contract to buy a principal residence by April 30 and complete the purchase by June 30. The tax credit is up to $8,000 for first-time home buyers and $6,500 for people who already have owned a home for at least five consecutive years during the previous eight years. The credit is available for individual taxpayers with annual incomes of up to $145,000 or joint filers with incomes up to $245,000.

9. Can I get a mortgage on attractive terms?

Only if you have a good credit record, a moderate amount of debt in relation to your income and the ability to fully document your income. That last requirement is fairly easy for people who work for a salary and have had the same employer for more than two years, but it can be tough for self-employed people with incomes that vary substantially from year to year.

A borrower with a strong credit score of 740 or higher (on the scale of 300 to 850) and the ability to make a down payment of at least 20% could get an interest rate of about 5% with no origination fees on a 30-year fixed-rate mortgage, says Lou Barnes, a mortgage banker in Boulder, Colo. But if your credit score is 680, the rate jumps to about 5.5%.

People who can't make a down payment of at least 20% generally are being funneled into loans insured by the Federal Housing Administration. That means paying extra fees for the FHA insurance.

Borrowing costs are steeper at the high end of the housing market. For so-called jumbo loans -- those above $729,750 in areas with the highest housing costs or $417,000 in places with the lowest costs -- interest rates on 30-year fixed-rate mortgages last week averaged 5.95%, according to HSH Associates, a financial publisher.

10. Should I invest in foreclosed homes?

Probably not. A lot of investors chase these properties, and only the most experienced know how to deal with all of the pitfalls. Homes auctioned at trustee or sheriff sales are sold on an as-is basis, and there is no provision for an inspection before you take ownership. If after buying you find out that termites have been treating the floor joists as an all-you-can-eat buffet, that is your problem. You must pay for the full price within a day or two, so you need a lot of cash or access to special short-term loans for investors that come with interest rates of around 18%. This is a pursuit best left to people with a lot of time, nerve, cash and knowledge of the local market.

New Home Sales Highest Since 2008

2009-11-25T11:43:00.000-05:00

Bloomberg

Purchases of new homes in the U.S. rebounded more than anticipated in October as buyers rushed to take advantage of a government tax credit before it expired.

Sales rose 6.2 percent to an annual pace of 430,000, the highest level since September 2008, the Commerce Department said today in Washington. The median sales price fell 0.5 percent and the number of unsold homes reached a four-decade low.

Rising demand shows the administration’s incentive for first-time buyers, which earlier this month was extended into next year and expanded to include current owners, may help housing recover from the worst slump since the Great Depression. Home values may remain under pressure as builders are forced to compete with mounting foreclosures as unemployment climbs.

“We are getting some help from the Federal Reserve in terms of low rates, lower prices and of course the tax credit,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio. “People are coming off the fence and getting into the market. We have seen a bottom. I’m pretty confident that the turn in the housing industry is behind us.”

Sales were projected to climb to a 404,000 annual pace from an originally reported 402,000 rate in September, according to the median estimate in a Bloomberg survey of 75 economists. Forecasts ranged from 350,000 to 425,000. The government revised September’s reading up to 405,000. Commerce Department also said.

U.S. stocks rose after the report. The Standard & Poor’s 500 Index increased 0.2 percent to 1107.66 at 10:36 a.m. in New York.

Sales in the South

The entire increase in sales was in the South, while the other three U.S. regions registered a decline.

“The South is the largest region by size, accounting for over 50 percent of new home sales, so that the gain is still significant, even though a broader improvement would have been more favorable,” Ryan Wang, an economist at HSBC Securities USA Inc. in New York, said in a note to clients.

The median price of a new home in the U.S. decreased to $212,200, from $213,200 a year earlier.

Sales of new homes were up 5.1 percent from October 2008, the first year-over-year gain since November 2005.

Inventories dropped. The number of homes for sale fell to a seasonally adjusted 239,000, the fewest since May 1971. The supply of homes at the current sales rate decreased to 6.7 months’ worth, the lowest level since December 2006.

Timely Indicator

While accounting for less than 10 percent of the housing market, new-home purchases are considered a timelier indicator because they are based on contract signings. Sales of previously owned homes, which make up the remainder, are compiled from closings and reflect contracts signed weeks or months earlier.

President Barack Obama this month extended the $8,000 tax credit for first-time homebuyers until April 30 from Nov. 30, and expanded it to include some current homeowners.

Borrowing costs may stay low as Fed policy makers have signaled they will hold the benchmark interest rate near zero for an extended period.

“The housing sector continued to recover, on balance,” central bankers said in minutes of the Nov. 3-4 meeting released yesterday.

Lower rates and stimulus efforts are reviving demand. Existing home sales jumped in October to the highest level since February 2007, the National Association of Realtors reported this week.

Tax Credit

The timing of the tax incentive’s extension indicates existing home purchases may jump again this month, decline in December and early 2010, before picking up again, the Realtors group said this week.

The erosion in prices is also abating, the S&P/Case-Shiller home-price index showed yesterday. Home prices in 20 cities rose in September from the prior month, the fourth straight gain. Compared with September 2008, the gauge had the smallest year- over-year decline since the end of 2007.

The labor market needs to turn around to ensure a sustained rebound in housing, according to economists. The unemployment rate, which rose to a 26-year high of 10.2 percent last month, will exceed 10 percent through the first half of 2010, a Bloomberg survey showed.

Foreclosure filings surpassed 300,000 for an eighth straight month in October as rising joblessness made it tougher for homeowners to pay bills, according to RealtyTrac Inc. data.

Home Improvement

Companies seeing signs of stability include Home Depot Inc., the largest U.S. home-improvement retailer. The Atlanta- based company’s third-quarter profit beat the average estimate of analysts as it slashed costs, and the chain gained market share.

Home Depot “continued to see signs of stabilization in the markets that were hardest hit by the housing crisis,” Chief Executive Officer Frank Blake said on a conference call with analysts on Nov. 17. “Despite this positive momentum, caution is appropriate.”

Internet Summit Held At Raleigh Convention Center

2009-11-19T04:05:00.000-05:00

Raleigh Telegram

RALEIGH - See photos from the Internet Summit held at the Raleigh Convention Center on November 4th and 5th, that The drew in over 1,200 tech executives from around the world to talk about the future of the web and mobile applications.

The event included displays from up and coming technology firms, speakers from companies such as Microsoft, ESPN.com, Lending Tree, Pandora.com, as well as representatives from the Raleigh online marketing world. Others that participated included executives from Google, IBM, Lenovo, Red Hat, Technorati, AOL, Expedia.com, Digg, Microsoft, CBS Interactive, ESPN.com, Topix, Peak10, Hosted Solutions, iContact, Bronto, and more.

The event inclouded panel discussions on email marketing, cloud computing, mobile devices, and more as well as networking sessions in between events. It was a great chance for Raleigh web developers to show off their talents.

The annual event, which is in its second year, was organized by the TechJournal South magazine and was co-sponsored by The Raleigh Telegram and was the largest Internet event ever held in North Carolina.

View photos from the 2009 Internet Summit

Housing Sales Up 17% In Triangle Housing Market

2009-11-18T14:09:00.000-05:00

Triangle Business Journal

For the first time in more than a year, the Triangle residential market made a monthly gain in the number of homes sold, with 17.6 percent more homes sold during October compared to the year prior,

Market watchers say the data signifies a major turning point in the local housing economy.

In the Triangle, 2,009 homes were sold in October compared to 1,709 homes sold the same month the year prior, according to Triangle Multiple Listing Service. Triangle MLS tracks new and existing home sales data in Wake, Durham, Orange and Johnston counties.

The dollar volume of homes sold last month also grew, by 8.3 percent, to $441.8 million in October compared to $407.9 million in homes sold the year prior. That’s the first gain in sales volume since October 2008, says residential real estate analyst Stacey Anfindsen.

“We’ve hit the floor, and at least we know how low we can go – hopefully -- and operate our business off of that,” Anfindsen says.

Anfindsen gave two reasons the market improved. First, the federal $8,000 first-time home buyer tax credit program, which expires at the end of November, helped convince many buyers who were on the fence to take the plunge. The federal government since has instituted another tax credit program that offers a $6,500 tax break to qualified homeowners looking to move up to middle-market homes that cost no more than $800,000.

Second, home sales in the Triangle started their free-fall in late 2008, so the market today is in comparison to one of the slowest housing markets in decades.

“October, November and December should be really good because everything kind of shut down this time last year,” Anfindsen says. “We’ll probably see the market grow 5 to 10 percent and have nice comparisons until about February when we will see it start to normalize.”

All is not well, though. The average Triangle home sale price was down by 8 percent in October compared to October 2008, and it took four more days on market to sell than the year prior. But the inventory of homes for sale also declined, by 13 percent, and the number of new listings including Raleigh real estate declined by 2.5 percent, meaning there is less competition for the homes on the market for sale.

In Wake County, 1,141 homes sold in October compared to 967 home sales the year before, which is an 18 percent increase. Total dollar volume of homes sold in the county was $270 million, which was up by 5.5 percent from the year prior.

In Durham County, 269 homes sold in October compared to 210 homes sold the year before, which is a 28 percent increase. Total dollar volume of homes sold in the county was $52 million, which was up by 23.4 percent from the year prior.

In Orange County, 91 homes sold in October compared to 62 homes sold the year before, or a 47 percent increase. The total dollar volume of homes sold in the county was $28.3 million, which was up 43 percent from the year prior.

In Johnston County, 193 homes sold in October compared to 176 homes the year before, or a 9.7 percent increase. Total dollar volume of homes sold in the county was $32 million, which was up by 5 percent from the year prior.

Still Time To Earn Tax Credits For Home Projects

2009-10-12T17:25:00.001-04:00

Story from the Wall Street Journal

Looking to make home improvements to help keep energy costs down this winter? The federal government is offering some financial incentives in the form of tax credits.

The credits can be claimed on a homeowner's income taxes for 2009 or 2010, whatever year the improvements were purchased. With a credit, the amount comes off any taxes you owe. Also, the credit is nonrefundable, meaning it allows taxpayers to lower their tax liability to zero, but not below zero, according to the Internal Revenue Service.

It's a good time to be thinking about improvements, says Ronnie Kweller, spokeswoman for the Alliance to Save Energy.

Upgrade your insulation, windows, doors, roofing, heating and air-conditioning system or water heater, and you could qualify for a federal tax credit for 30% of the purchase price of the product -- up to a $1,500 maximum credit.

To qualify for the credit, you must place those purchases in service between Jan. 1, 2009 and Dec. 31, 2010.

"The $1,500 cap applies to the aggregate amount of credits claimed in both years combined," says Robin Christian, senior tax analyst at the tax and accounting business of Thomson Reuters. "Also, only improvements made to your principal residence qualify -- vacation homes are not considered."

Details on which products qualify can be found on the Environmental Protection Agency's Energy Star program Web site. Some stores also post information. For instance, at Home Depot's Web site, there's a link to a list of specific products that qualify. Click on "Tax Credit Eligibility."
No Cap on Bigger Items

For typically more-costly improvements -- including solar water heaters, solar panels, small wind-energy systems and geo-thermal heat pumps -- the credit is for 30% of the purchase price, with no cap, according to energystar.gov. Fuel cells also are covered, at 30% of the cost, up to $500 per 0.5 kilowatt of power capacity.

Credits for these improvements are available through 2016, but you must claim them for the tax year in which you made the purchase. And all but the fuel-cell equipment can be used for a vacation home as well.

One note: To qualify for the credits, all of the products must be used inside a home. That means equipment used to heat a pool or hot tub doesn't qualify, Ms. Christian says.

Also, the federal tax credits don't always cover the cost of installation. The installation costs for heating and cooling systems and some other higher-cost improvements qualify, according to the Energy Star site. But installation of windows, insulation, doors and roofs doesn't.

The tax-credit rules are different if you are building a new home. In this instance, you can qualify for the credit for some upgrades, including geo-thermal heat pumps, solar panels, solar water heaters, small wind-energy systems and fuel cells. But you won't get a tax credit for the purchase of windows, doors, insulation, roofs, heating and air-conditioning systems, and nonsolar water heaters, according to the Energy Star site.

Make sure any products you purchase come with a Manufacturer Certification Statement, a signed statement from the manufacturer that says the product qualifies for the tax credit. You will need that and any receipts when you claim the credit on your taxes.

Monica Rebella, a certified public accountant in Tustin, Calif., suggests making a copy of receipts since the print can wear off receipts over time.
Where to Start

When looking to make a home more energy efficient, consumers typically first turn to insulation and windows.

"If you need insulation, that is the most cost-effective upgrade you can make -- even without a tax credit," says Karen Schneider, Web-site manager for Energy Star. "If you have a 50-year-old home and never looked at the insulation, now is the time to do that."

Many insulation projects, such as upgrading or adding insulation in an attic, are easy for do-it-yourselfers, says Michael Chenard, director of environmental affairs for home-improvement store Lowe's. "Insulation is one of the easiest things to do that is covered by the tax-credit promotion," he says.

Replacing windows also can be done by amateurs, as long as the measurements are accurate, Mr. Chenard says.

The tax credit makes the cost of a more-efficient window competitive with a lower-grade window that doesn't qualify, says Art Donnelly, owner of Legacy Builders & Remodelers in Holbrook, N.Y. And because of the weak economy, companies' "backlogs aren't as long," he says. "So it's quicker to get things installed."

Housing Data Yield Mixed Results Overall

2009-09-18T08:42:00.000-04:00

By The Wall Street Journal

Housing starts rose slightly in August, but a decline in construction of single-family homes after five months of increases highlighted the fragile state of the economy.

Meanwhile, in a positive sign, the pace of layoffs slowed as initial claims for jobless benefits dropped by 12,000 to 545,000 in the week ended Sept. 12.

Housing starts climbed 1.5% to a seasonally adjusted annual rate of 598,000 in August from the previous month on an increase in multifamily home construction, the Commerce Department said Thursday. But single-family homes and kitchen remodeling Grand Rapids, which accounted for about 80% of all housing starts, fell 3% to 479,000.

Many economists expect home remodeling Grand Rapids to contribute positively to gross domestic product in the second half of the year, after dragging it down last quarter. But as the housing sector continues on its rocky path to stabilization, it might not make a strong contribution. Even with recent gains, new home starts were 29.6% lower than a year earlier, and they are expected to remain at relatively low levels while the market works through the glut of foreclosed homes and builders battle a tight credit market.

On a more positive note, Precision Remodeling building permits, a sign of future construction, increased 2.7% in August to a seasonally adjusted annual rate of 579,000.

With permit requests also rising, we should continue to see improvement in housing going forward. Just don't expect any huge increases, and don't be surprised if once in a while activity eases.

Despite the fall in single-family home remodeling Quakertown starts, they are expected to trend upward, albeit at a slow pace. They are still 21.7% lower than a year earlier.

Starts of multifamily homes with sunrooms Grand Haven, five or more units, including apartments and condominiums, tend to be more volatile. They rose 35.3% in August after falling in July. The number of starts is still off 48.2% from a year earlier.

"A modest rebound from such a depressed level of activity is not too surprising," Morgan Stanley analysts wrote in a note to clients. "However, we do not expect to see any sustained upside in multifamily construction."

The labor market continued on its slow road to recovery as the four-week average of new claims for jobless benefits, which aims to smooth volatility, fell by 8,750 to 563,000, the Labor Department said Thursday.

But continuing jobless claims, those drawn by workers for more than one week, climbed to 6.23 million in the week ended Sept. 5 -- up 129,000.

NC Gov. Perdue signs beefed up consumer protection

2009-09-10T10:25:00.000-04:00

By The Associated Press

RALEIGH, N.C. — North Carolina consumers soon will have new protections from Raleigh real estate foreclosures and intimidating debt collection practices.

Gov. Beverly Perdue on Wednesday signed into law a bill approved by the Legislature last month and backed by Attorney General Roy Cooper.

Once the new law takes effect next month, it will allow a clerk of court to postpone Raleigh real estate foreclosure hearings for up to 60 days to allow a homeowner more time to work out a payment plan with the mortgage holder and remain in their home.

During this recession, thousands of North Carolinians have lost their homes because of foreclosure. When Raleigh NC real estate is foreclosed it's bad for our Raleigh families, it's bad for our Raleigh communities, it's bad for our Raleigh businesses and it's bad for the entire state North Carolina. This bill makes it easier for homeowners to work out a deal with their lenders and avoid foreclosure.

The bill also sets out new rules for companies that attempt to collect from consumers on old debts from credit cards or other unpaid bills.

The law extends regulation to debt buyers, who Cooper said have engaged in overly aggressive debt collecting practices.

Debt buyers pay credit card companies, hospitals and others a fraction of the full amount due on unpaid accounts, then work at forcing debtors to pay up. The state law extends debt-collection regulations to cover the law firms that often file lawsuits to collect the cash. Critics say debt buyers often pursue collection even when it is barred by law, such as when the debt is discharged after bankruptcy or has lingered beyond the legal collection deadline.

Beginning next month, debt buyers who try to collect on a debt that they should reasonably know is blocked by a statute of limitations could face lawsuits and civil penalties of up to $4,000 per violation.

The state law also will require debt collectors to provide documents proving they own the accounts they're trying to collect. Taking a Raleigh NC real estate debtor to court will require records including the original account number of the debt, the name of the original creditor, and an itemization of charges and fees the current creditor claims is owed.

First Time Homebuyer Program

2009-09-04T11:50:00.000-04:00

Many Americans are about to close on the sale of their new home to officially become a homeowner for the first time.

Americans are taking advantage of the federal first time homebuyers program, before it runs out.

It definitely gives Americans the ambition to keep on everybody because buying a home is such a long process. You have to jump through so many hoops.

Ann Davis of FORHomeBuyers, Inc., says, "To meet the deadline, you must close on the sale of your home by November 30th". Ann Davis is a top buyers agent in the Raleigh real estate market.

To do that, Davis recommends that you have a contract in place by the end of September.

She says that should give you enough time and some extra, to make sure everything that leads up to the closing, gets done.

There are contingencies such as the home inspection contingency that needs to be performed and making sure you have mortgage in place which usually takes a couple of weeks.

The first time home buyer credit is available for homes bought on or after January 1st of this year.

To qualify, if you're single, you must make less than $75,000 a year.

If you're married, it's a combined income of less than $150,000.

The credit is a maximum of $8,000 or 10% of the home's purchase price.

To get the first time home buyer's tax credit, all you need to do is file for it on your federal income tax return.

FORHomeBUYERS, Inc., offers Exclusive Buyer Only Raleigh Real Estate Services.

Are you considering relocating to Raleigh NC, buying or building a new home in Raleigh-Cary-Durham-Chapel Hill NC or anywhere in the Triangle area of North Carolina? FOR HomeBUYERS, Inc., a leading Raleigh real estate agency and Exclusive Buyer Real Estate Agency in Raleigh will represent YOU 100% throughout the entire home buying or home building process.

As an 18 year old Raleigh Real Estate Agency we have Exclusive Buyer Only Real Estate Agents who serve Raleigh, Durham, Cary, Apex, Chapel Hill, Garner, Holly Springs, Fuquay Varina, Wake Forest, Knightdale, Wendell, Zebulon, Hillsborough, Clayton, Wake County, Durham County, Orange County, Chatham County, Johnston County, North Carolina (NC).

Pending U.S. home sales jump in July

2009-09-01T15:10:00.000-04:00

By The Charlotte Business Journal

First-time buyers of Chapel Hill homes kept pending home sales climbing for the sixth consecutive month in July, according to the National Association of Realtors.

The group’s Pending Home Sales Index jumped 3.2 percent in July to 97.6. The index is 12 percent higher than in July 2008.

The recovery is broad-based across the Raleigh real estate market and across most of North Carolina. Housing affordability has been at record highs this year with the added stimulus of a first-time-buyer tax credit.

The index was up in the South and West but declined in the Midwest and Northeast.

The NAR’s Housing Affordability Index for July was 158.5, up 36 points year over year.

Raleigh real estate sales will likely drop in next year’s first quarter if the tax credit isn’t extended.

However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010.

Existing-home sales figures for August will be released Sept. 24, and the Pending Homes Sales Index for the month will be released Oct. 1, the association says.

CUs Foreclosing on Fewer Homes Than Banks and Not as Quickly

2009-09-01T14:24:00.000-04:00

By The Credit Union Times

In general, credit unions appear to be foreclosing on a smaller percentage of their mortgage loans than other financial institutions and are usually taking longer to do it, according to credit union executives and NCUA data.

An organization that bills itself as the “leading online marketplace of foreclosure properties,” reported that foreclosures nationwide rose 7% in July over the previous month and were 32% over what they had been a year before. The worse states for home foreclosures were, as they have been for months, California, Florida, Arizona and Nevada. However, Utah, Idaho, Georgia, Illinois, Colorado and Oregon were also high in the firm’s rankings.

July marks the third time in the last five months where we’ve seen a new record set for foreclosure activity. Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions.

Credit unions have been part of this trend, but in a more deliberate manner, according to NCUA data and credit union executives.

According to the NCUA, the ratio among all federally insured credit unions for fixed-rate and hybrid balloon first mortgages that were two months delinquent, as of March, was 0.9% and the ratio for adjustable-rate first mortgages that were more than two months delinquent was 2.18%. Both numbers suggested that the rate of credit union mortgage loans that eventually wind up in foreclosure will remain extremely low relative to the overall housing and foreclosure picture. But, credit union executives pointed out that foreclosure rates are running at historic highs for their institutions.

No doubt our foreclosures on Chapel Hill homes have been lower than that the nation overall, but certainly higher than we are used to. Part of that is because we did not make the same sorts of risky, novelty loans that got so many homeowners and their lenders in trouble, so we haven’t had as many loans go bad.

But also observed that the foreclosure spike could be seen as an overall necessary evil for the real estate market overall.

The increase on foreclosures on Winston Salem Homes is not all bad news to the extent that it represents a reviving housing market.

Lenders are slower to foreclose when housing prices are in the dumps, and they calculate they will have to hold the properties for longer. If a market starts to rise, they might foreclose faster in order to move the foreclosed property back into a more profitable situation more quickly.

With a more or less nationwide field of membership and as the largest credit union mortgage originator and servicer, Navy Federal provides a unique window on the state of credit union foreclosures, since it had borrowers in markets hard hit by the economic downturn and ones that have had it relatively easier.

According to Navy Federal’s June 2009 report to NCUA, the credit union had a delinquency rate of 0.88% for fixed-rate first mortgages and 3.08% for adjustable rate mortgages. In addition, the credit union had almost $495 million worth of foreclosed real estate on its books.

In addition to better loans to begin with,the Navy’s ability to work with borrowers on loans still on its books as helping to keep the foreclosure numbers down. The Navy Federal has about 50% of the loans it originates on its books and has sold about 50% to the secondary market.

The credit union has not yet begun to participate in the Making Home Affordable program, but they have until the end of the year to formally participate.

Instead, Navy Federal has been working one-on-one with borrowers to determine which parameters of their loans can be modified to bring them back, if possible, to a number they can afford. Nobody wants to foreclose, he observed.

According to the credit union’s June Raleigh real estate report to NCUA, SECU holds more than $366 million in foreclosed real estate, up from over $327 million in June of last year.

The SECU’s foreclosure picture is often clouded by the number of times it may be the first mortgage holder in a situation where the borrower has taken a second mortgage with another lender.

Every modification situation that succeeds is going to be different, and none of the ones that fail will fail for precisely the same reason.

Once it’s clear that SECU will foreclose on a property, the credit union moves swiftly to place it with real estate agents who know the community and have experience staging and selling foreclosed properties.

They don’t want to have to hold on to these places any longer than we have to. That’s why foreclosures are pretty much a lose-lose circumstance–because we have a property we don’t want to have and the borrower has a property that a lot of the time, they still want to have.

Somewhat surprisingly, the small measure of good news in the foreclosure situation may be coming from Florida, one of the hardest hit states.

What people forget is that the foreclosure and real estate crisis started down here faster than it did in the rest of the country, so we are pretty much burned through our problem real estate already.

Busy time for homebuilders

2009-08-27T15:43:00.000-04:00

By The Wall Street Journal

WASHINGTON -- At least the market for new Wilson NC homes isn't getting worse, and that's the first step to getting better.

In fact, the overall economy is getting a small boost as more buyers walk into model houses ready to sign contracts and builders hire workers to pour foundations and pave roads.

Construction of single-family Chapel Hill homes rose in July for the fifth straight month, edging up almost 2 percent to the highest level since October, the government said Tuesday. Building permits climbed nearly 6 percent.

Each new Wilson NC home, Vacation homes Atlantic Beach NC and Chapel Hill Home built creates about three jobs, on average, and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.

With new construction up 37 percent from its low point this winter, the industry is expected to help the overall economy this quarter for the first time in 3-1/2 years.

"Housing is no longer a drag," said Mark Vitner, a senior economist with Wells Fargo. "That's a good thing."

Of course, the housing industry is coming back from the worst recession since the Great Depression, and construction is still more than 70 percent lower than at its 2006 peak. So the effect of hiring and spending on materials such as wood and concrete is modest.

In addition, hammers are silent at construction sites for apartment buildings. For developers, it makes little sense to build when there are so many vacant homes and condominiums for rent. Apartment construction fell 13 percent from June to July.

That pulled the combined construction rate for homes and apartments down 1 percent to a seasonally adjusted annual rate of 581,000 units, from 587,000 in June. Economists polled by Thomson Reuters expected 600,000.

There are still several threats to the recovery of the U.S. housing market.

The unemployment rate, now 9.4 percent, could exceed 10 percent, leaving more homeowners unable to pay their mortgages. Interest rates are still at historic lows but could rise, making homes less affordable. Foreclosures are still at record highs.

And July was the last month that most builders could start new homes and have first-time buyers qualify for a new tax credit. Buyers can save 10 percent on the price of a home, up to $8,000 in taxes, if they complete the purchase by the end of November.

Builders and real estate agents are pressuring Congress for that credit to be extended. If it isn't, sales could easily slump.

One of the reasons for the purchase was Centex's focus on more affordable homes. Since the housing bubble burst, many builders have shifted to smaller houses, Assisted living raleigh and Assisted Living Dearborn, which can be sold at lower prices.

Home Prices Show More Signs of Life

2009-08-26T15:27:00.000-04:00

Raleigh real estate and Durham real estate real estate, Home prices rose again in the year's second quarter, but economists say it's too soon to call it a turning point for the beleaguered sector.

Apex real estate prices increased 0.4 percent from May to June after increasing 0.2 percent from April to May.

Prices, however, are still down significantly -- 11.9 percent -- when compared with June 2008.

For national home prices, the substantial 15.4 percent drop in June from a year earlier was the smallest decline since April 2008.

The gains are the first two consecutive quarterly increases in three years, although prices are at the same level as early 2003.

Adding to that momentum is rising consumer confidence. The New York-based Conference Board's Consumer Confidence Index reported Tuesday that confidence in August had rebounded from July because consumers became less concerned about the job outlook.

Home Price Indices measure the residential housing market by tracking changes in home values using repeat sales of existing homes.

Existing-home sales also show an upward trend this year, as the National Association of Realtors on Aug. 21 reported increases for four months in a row for the first time in five years.

In the Northeast, existing-home sales climbed 13 percent in July, the biggest gain of any of the four regions. However the median price was down 15 percent from a year ago because of the increase in foreclosed homes, which NAR said typically sell for 15 percent to 20 percent less than other homes.

Raleigh real estate, Durham real estate and Chapel Hill real estate also is seeing the upward trend in month-over-month statistics.

The median price of homes sold edged up to $430,000 in June from $429,000 in May, and the number of homes sold rose 51 percent in the same time period.

When comparing June prices with June 2008, however, prices and volume were down. A year ago, the median price was $515,000 and 23 more homes were sold during the month.

Sellers understand the over-inflation of prices that took place in 2004 to 2006, so the correction has already taken place.

That while drops in prices have varied across Bergen County, prices have fallen an average of 10 percent since 2005. That's opened up homeownership to a lot more people.

Realtors report increased sales and interest in homes priced at less than $500,000, which is considered lower end for the county. They also report a "strong demand" for homes in foreclosures. While the distressed prices hurt sales, they help reduce inventory.

The tone of the market has definitely shifted, but even with the pronounced rise in foreclosures, prices moved marginally upward. And that's a positive.

The U.S. Department of Commerce will release new-home sales figures today.

MLS: Triangle home sales heat up in July

2009-08-24T11:32:00.000-04:00

Published By Triangle Business Journal

While the number of new and existing homes sold in the Triangle declined year-over-year in July, it was the best month so far in 2009 – and perhaps a sign that the residential real estate market is beginning to thaw.

According to the July Raleigh real estate report from Triangle Multiple Listing Service Inc., 2,337 homes were sold during July in the Triangle, down 8.5 percent from the 2,553 homes sold in July 2008 but a vast improvement over the 21 percent decline posted in June, when 2,211 homes were sold.

Year to date, the number of home sales in the Triangle are down 25 percent.

The total dollar volume of homes sold in July was down 12.2 percent from the year prior, to $536.3 million.

Much of the decline in home sales in the Triangle area is not related to demand. Many buyers are experience problems at the closing table. Home lenders are changing the terms of the loan prior to the closing, as many banks are hesitant to approve new home loans.

Ann Davis, founder of FORHomeBUYERS and a leading buyers agent in the RTP area reports that relationships and experience with local banks, credit unions and other Triangle home lenders are critical in today's market.

"We have direct contacts and many years of working experience designing custom home loans that work for all parties."

"Our clients' can use our experience to side-step many issues related to their credit rating and FICO scores and proceed smoothly through the entire closing process, says Ann Davis."

The median sales price of a home sold in the Triangle was down 1.8 percent in July, to $186,500, from $190,000 the year prior.

The number of new listings and the inventory of homes for sale also dropped 16 percent and 12.6 percent, respectively.

The Triangle region, as tracked by Triangle MLS, includes Wake real estate, Durham real estate, Orange real estate and Johnston real estate.

Broken down by county, Wake County had 10.5 percent fewer home sales in July compared to the year prior. Durham County had 11 percent fewer home sales. Orange County had 13.3 percent fewer home sales. Johnston County had no change from the year prior, with 206 homes sales in July.

Raleigh Real Estate Jumped 11% in June From May

2009-07-28T09:46:00.000-04:00

Story By The Wall Street Journal

Raleigh real estate soared in June from the previous month, the third increase in a row and supplying fresh evidence the housing market is beginning to recover from its long crisis.

Sales of single-family homes increased by 11.0% to a seasonally adjusted annual rate of 384,000 compared to the prior month. Though, year-over-year, new-home sales were 21.3% lower than the level in June 2008.

The median price for new Chapel Hill homes was $206,200 in June, down 12.0% from $234,300 in June 2008. On a monthly basis, the price fell from May 2009's $219,000.

The increase was the fourth in six months, as buyers take advantage of falling prices. It appears new-home sales reached a bottom in January, at a level of 329,000, and that the market is beginning to recover slowly. The level of 384,000 in June was the highest since 390,000 last November.

Raleigh real estate new home construction unexpectedly rose in June. Housing starts increased 3.6% to a seasonally adjusted 582,000 annual rate compared to the prior month. The starts data also showed building permits surged, and single-family starts made their biggest climb in four years.

May new-home sales for Chapel Hill homes rose 2.4% to an annual rate to 346,000, Monday's data showed. Originally, May sales fell, sliding 0.6% to 342,000. April sales climbed 1.8%.

A recovery of the housing market will be slow. New homes are in competition with used homes, which are cheaper these days because of foreclosures.

Prices are down because of too much supply. The ratio of houses for sale to houses sold in June was 8.8. But inventories are shrinking. The ratio was 10.2 in May. At the end of June, there were an estimated 281,000 homes for sale. That's below 293,000 for sale at the end of May.

Cheaper prices and historically low mortgage rates are offsetting tight credit and a high unemployment rate. Another lure, for first-time buyers, is a government tax credit.

Regionally last month, new-home sales rose 29.2% in the Northeast, 43.1% in the Midwest, and 22.6% in the West. Sales in the South were down 5.3%.

An estimated 36,000 homes were actually sold in June, up from 33,000 in May, based on figures not seasonally adjusted.

Even real estate and property sales at unique offerings like Raleigh retirement communities are increasing.

If you're considering relocating to Raleigh NC, buying or building a new home in Raleigh-Cary-Durham-Chapel Hill NC or finding a Raleigh retirement community, FOR HomeBUYERS, Inc., a leading Raleigh real estate agency and Exclusive Buyer Real Estate Agency in Raleigh will represent YOU 100% throughout the entire home buying or home building process.

Federal Tax Incentive Gets Market Moving

2009-07-07T10:17:00.000-04:00

Story from Newburyport News

There is a tax credit to stimulate the real estate market, and it's working. In February, a federal tax credit for first-time home buyers of $8,000 was passed into law, and the effect has been noticeable.

Basically, if you haven't owned a home for the last three years and your income is within the prescribed limits, if you buy a home before Dec. 1, you can claim an $8,000 credit against your 2009 income tax return. That's a chunk of cash in your pocket to buy a home. And because the FHA is giving mortgages with as little as 3.5 percent down to people with reasonable credit, the barriers to buying a home are low.

So things have been happening. The demand for lower-priced properties — less than $300,000 — has increased substantially. Condos are selling. Renters who never before thought they could buy their own home are finding out that now they can! And while buyers can't borrow the down payment, it CAN be a gift from a relative.

Some homeowners are realizing that now is a great time to sell because of this new demand. They have been catching on that now is a good time to put their starter home on the market and move on — it's a great time to move up because the homes in the $300K to $600K range are well priced and the interest rates are low.

Buyer and seller services have never been better — the best Realtors have hung in there through the slump and are busy with the growing momentum.

This government stimulus is well thought out and having a beneficial and stabilizing effect on the real estate market. While no one expects prices to go back to the levels of a few years ago any time in the foreseeable future, prices are now at the 2001-2002 levels, which makes a lot more sense. Unless you bought your home or refinanced it to the max at the peak of a giddy market, when many people — including the lending industry — unfortunately chose to ignore the old adage "it's too good to be true," you are probably in good shape to thoughtfully plan your home ownership future. Once again, we do have something to look forward to!

Current Market Trends

2009-07-03T12:55:00.000-04:00

Story from the Press Democrat

The real estate industry is full of clichés and metaphors, for example: “location, location, location,” “a wave of foreclosures is about to hit the market,” “are we at the bottom of the market?” and “interest rates are the lowest they’ve been since the Macedonian Period!”

These clichés and metaphors are spewed out more frequently than the phrase “bailout” flashes across the ticker on Fox News, MSNBC and other media conglomerates who attempt to shape our economic thought process and buying habits. The million-dollar question: “Is this the right time to buy real estate?”

Although we can’t look into the future and give an accurate answer to that question, we can look at history and trends.

According to Kiplinger’s Personal Finance, “It’s a good time to snag a bargain if you’re confident in your job prospects and you don’t plan to sell for at least five years.” Over the past decade, real estate lost its way. Real estate was typically purchased to have a place to call “home” and raise a family or create lifelong memories. However, when real estate rose faster than a kindergartner’s hand when asked by their teacher “who wants a cookie?” real estate became a commodity and the American dream of owning a home changed overnight to an appreciation feeding frenzy.

Consumers thought it was their right to gain 20 percent appreciation year after year until they were ready to sell and retire from the proceeds or refinance with a less risky loan and take cash out for exotic vacations, vehicle and boat purchases or trips to the local home improvement store where homes were transformed from an outdated and sometimes unlivable dwelling to the neighborhood Taj Mahal.

With all of that aside, it does seem like now is a good time to buy real estate. In fact, according to Forbes.com, the number one item on their list of things to buy before the economy improves is housing. “This may be the best time in a generation to buy a home.”

The Pew research center reported that 75 percent of Americans said it was a “good” or “very good” time to buy (people-press.org). The Wall Street Journal reported that median home prices in the San Francisco Bay Area are up 9.2 percent year-to-date and MSN Money.com/Case Shiller posted the following statistics regarding return on investment from Jan. 1, 2001 through Dec. 31, 2008: The Dow Jones down 19.8 percent, the S&P down 35.2 percent, the Nasdaq down 59.9 percent and real estate up 69.8 percent.

I am often told by consumers that they’re waiting for the market to go down even more before they decide to buy. However, keep in mind that if homes decrease another 10 percent, you’ll save $50,000 on a $500,000 purchase, but if interest rates increase by more than 1 percent it will offset the $50,000 you saved on your purchase price and your monthly cost will increase.

USA Today is currently estimating that California’s excess supply of homes will be substantially depleted and new construction will be needed to meet demand, thus leading to a housing recovery. Over the past six years, 30-year mortgage interest rates have hit historical lows on five different occasions, followed by quick and dramatic increase in rates as reported by the Federal Reserve.

Again, one cannot predict the future, but with data and statistics one can be informed and make an educated decision. Our market place (especially homes priced under $400,000) is very competitive. Buyers in this price range are often bidding against multiple offers, homes are selling for above asking price and inventory is very low — all creating a demand for a supply that has decreased dramatically. It is a good time to buy, so contact a real estate professional, get pre-qualified with a loan officer and let the shopping begin!

Triangle Home Sales Dip, But Positives Emerge

2009-05-16T06:23:00.000-04:00

Story from Triangle Business Journal

The number of Triangle homes sold in April was down year over year, but new data from the Triangle Multiple Listing Service show a couple of welcome trends.

First, while the 1,623 homes sold last month represented a 30 percent drop from the 2,324 sold in April 2008, it is the highest monthly total posted in six months. The triangle remains strong for those seeking Chapel Hill, Durham, or Raleigh relocation services.

Even better, the number of houses on the market represented a 7.5 month supply, down almost half from a high of 14.9 months in November. April 2008 featured a 6.9 month supply.

The median price for houses sold in April dipped 4 percent, to $177,600, from $184,922 in the same month last year. While a negative number, it’s still much better than the double-digit declines seen across much of the U.S.

The MLS figures, which are supplied by Stacey Anfindsen of research company Metrostudy, cover the Raleigh-Cary and Durham metropolitan areas. The numbers also are broken down by county.

• In Wake County, the number of homes sold dropped 35 percent, to 862. The inventory for sale represented a 7.3-month supply, up from 6.3 a year ago. The median price fell 2.5 percent, to $195,000.

• In Durham County, the number of homes sold slipped 20 percent, to 245. The inventory for sale for each Durham real estate agency represented a 4.9-month supply, down from 5.2 a year ago. The median price rose 3 percent to $170,000.

• In Orange County, the number of homes sold plunged 48 percent, to 57. The inventory for sale represented a 6.5-month supply, up from 5.9 a year ago. The median price fell 11 percent to $258,000.

• In Johnston County, the number of homes sold dips 22 percent, to 173. The inventory for sale represented a 8.9-month supply, up from 8.1 a year ago. The median price fell 5.6 percent, to $150,100.

Durham-Chapel Hill Surges Past Raleigh-Cary For Job Growth Potential

2009-04-15T21:45:00.000-04:00

Story from Triangle Business News

The Durham-Chapel Hill metropolitan area has surged past Raleigh-Cary in NewGeography.com’s annual study ranking job-growth potential.

Durham-Chapel Hill soared 24 spots, to No. 19, in the rankings of all U.S. metropolitan areas with at least 30,000 jobs. Raleigh-Cary tumbled 30 spots, to No. 38.

The rankings are based largely on federal job growth numbers for 336 metropolitan areas. Researchers assess the numbers for the current year, the previous year and the previous five years and also compare five-year growth rates over the past decade to come up with a score for each area.

In addition to the overall rankings, the metros are grouped by market size. Durham-Chapel Hill rose seven spots, to No. 4, in the midsize group, while Raleigh-Cary dropped seven spots in the large group, to No. 8, from No. 1 last year.

Joel Kotkin, one of the researchers who put together the rankings, said on his blog that Durham-Chapel Hill offers tax and housing-cost bargains compared to major markets such as San Jose, Calif., and Boston.

Asked why Raleigh-Cary fell, Kotkin said in an e-mail that “It is a drop of jobs that was a bit more than other high-flyers.”

But, Kotkin said, Raleigh-Cary’s job numbers were still relatively solid, especially considering how poor the U.S. economy has performed over the past 15 months. Both areas are still among the most popular in the nation for relocating, and Raleigh real estate continues to sell along with Durham and Chapel Hill real estate.

“In 2008, 2 percent growth made a city a veritable boom town,” Kotkin said on his blog.

“In past iterations, we saw many fast-growing economies – some adding jobs at annual rates of 3 percent to 5 percent,” said Kotkin.

The top city overall was Odessa, Texas. For the complete rankings, go to this page on NewGeography.com.

The Return Of Jumbo Mortgages

2009-04-05T23:55:00.000-04:00

As Originally Posted to the Wall Street Journal

Jumbo mortgages became more expensive and harder to come by as the nation's credit crisis deepened. That might be starting to change.

"Jumbo" refers to mortgages that are too large to be bought by Freddie Mac or Fannie Mae. The "conforming loan limit" for those government-backed entities is $417,000 in many parts of the country, but goes up to $729,750 in high-cost areas of the continental United States.

Bank of America recently began trumpeting its jumbo program, offering 30-year fixed-rate jumbo mortgages with rates in the high-5% range. "We decided it was time to really go after that market," says Vijay Lala, a product management executive for the bank.

More lenders may soon join in, says Guy Cecala, publisher of Inside Mortgage Finance.

He says Bank of America appears to have lower jumbo rates than its giant banking competitors Wells Fargo, J.P. Morgan Chase and Citibank. "I suspect the others will slowly follow suit," Mr. Cecala says.

Big Drop in Rates

The rates on 30-year fixed-rate jumbo mortgages averaged 6.5% for the week ended March 27 -- the lowest since May 2007, according to HSH Associates, a publisher of consumer loan information. On Oct. 31, a recent high point, the average rate on a 30-year fixed-rate jumbo mortgage was 7.9%, according to HSH data.

GMAC also has been pricing its jumbos aggressively, says Paola A. Kielblock, national product specialist for Fairway Independent Mortgage, a mortgage broker and banker based in Madison, Wis.

She recently has seen rates in the high-5% to the low-6% range for 30-year fixed-rate jumbo mortgages, and the low-5% range for five-year adjustable-rate jumbos.

Bill Higgins, chief lending officer for ING Direct, says his firm has been offering jumbos in the 5% range for several months -- even back when average rates were higher.

Lenders' interest in making more jumbo loans isn't surprising, says Keith Gumbinger, vice president for HSH.

Lenders no longer have many institutional buyers for their jumbo loans, forcing them to keep the loans they write on their books. Banks held back when cash was tight. But banks have more money to lend these days, as consumers have taken money out of the stock market and put it into safer investments.

"More cash comes in the door," Mr. Gumbinger says, and so "the loans go out the other side."

Plus, banks have gotten assistance from the federal government, and record-low conforming mortgage rates have inspired more people to refinance loans -- giving banks some more liquidity, he says.

For financial institutions, the return on a jumbo mortgage is also starting to look appealing. Banks are "taking a look at what investment alternatives there are," says Mr. Higgins of ING Direct, and they "are saying 'we wouldn't mind a 6% to 7% asset on the books.' "

Cheaper But Not Easy

Borrowers in the market for this kind of loan, however, shouldn't expect a simple process. Mortgage shoppers will find differences in price and availability from lender to lender, Mr. Gumbinger says. Jumbo programs vary greatly from one side of town to the other, he adds, and lenders will sometimes originate a higher volume of loans for a while, then slow down.

"To be honest, I'm not certain if [the low rates] will be around for a while," Ms. Kielblock says.

What You Need to Know

If you think you're in the market for a jumbo mortgage, consider the following:

Do you really need a jumbo? Don't automatically assume that your mortgage will exceed the conforming loan limits, says Cameron Findlay, chief economist of LendingTree. As home prices have fallen and the U.S. has raised loan limits in some areas, more home buyers probably need conforming mortgages.

Some people who are looking to refinance and who originally needed jumbo loans may also fall within increased loan limits.

With a conforming mortgage, you will likely get a better rate.

Availability may be increasing, but requirements are still stiff. Bank of America jumbo loans, for example, require at least a 720 credit score and a 20% down payment (or 20% home equity on a refinancing). And borrowers need to have at least six months worth of reserves in the bank. ING Direct requires 25% down.

Search widely for good deals. "Borrowers need to shop around for any mortgage, but particularly for jumbos," Mr. Cecala says. "A small local lender or credit union may have a good deal, but you won't know unless you do your homework. Ask real-estate agents, your friends, or anyone who might have a lead on a good jumbo lender."

Compare apples to apples. Lenders often talk about their products in terms that don't allow you to easily compare with other lenders, Mr. Higgins of ING says. Make sure to draw fair comparisons that consider mortgage fees and costs.

Raleigh Real Estate Market Summary

2009-03-31T21:22:00.000-04:00

Raleigh (, rälē or rah-lee) is the capital of the state of North Carolina and the county seat of Wake County.

Raleigh is known as the "City of Oaks" for its many oak trees. As of the 2000 census, it had a population of 276,093, making it the second most populous city in North Carolina, after Charlotte.

Raleigh, Durham and Chapel Hill make up the three cities of The Triangle, so named in 1959 with the creation of the Research Triangle Park, a research park between Durham and Raleigh (mostly located within Durham County).

The Triangle is a regional population, equivalent to the U.S. Census Bureau's Combined Statistical Area of Raleigh-Durham-Cary. Its estimated total population as of 2005 was 1,509,560. The estimated Raleigh-Cary metropolitan statistical area population, as of 2004, is 914,680.

While almost all of the city limits is located in Wake County, a few small portions of Raleigh are actually in Durham County as a result of annexation Raleigh Durham Annexation Agreement Lines.

The City of Raleigh estimates its population to be 353,604 as of July 1, 2006, making it one of the fastest growing cities in the nation.

Raleigh placed fourth on MONEY Magazine's 2006 list of Best Big Cities.

Raleigh Real Estate Market Stats:

Population: 412,559
Average Home Price: $250,000
Average Rental Price: $1,250
Average Cost of Living: +14%
Male/Female: 50%50%
Married/Single: 31%69%

Raleigh Real Estate Market Demographics:
Adults 20-24: 10%
Adults 25-34: 23%
Adults 35-49: 34%
Adults 50-64: 23%
Adults 65+: 10%

Leading Raleigh Real Estate Company: FOR Home BUYERS 800-333-2893
Email: staff@forhomebuyers.com or Visit: www.forhomebuyers.com