Thursday
Wednesday
Is Search An Early Market Indicator
Real Estate Porn
The search bunny keeps on going
Its interesting that online search for real estate is as strong as ever. Sales are miserable, people are afraid to buy. They no longer know what value and they have no job security. So, why is search so strong. Realtor.com President, Errol Samuelson notes that Online search is a critical measure of interest in real estate, especially now that more than 90 percent of buyers search for their homes online. So what can we glean from data mining search. Well, it turns out quite a lot.
Search As An Economic Indicator
Studys that indicate that the answer is yes, search can indicate future interest. The National Academy of Sciences of the United States of America (PNAS) recently published a study and concluded that predictive power of search can predict activity several weeks in advance.
Where Are The Top Ten
Sun Belt Still Strong
The top 10 most searched real estate markets in 2010 were established based on the number of visitors that viewed properties in each Metro Service Area (MSA) in the United States from January 2010 to December 2010 on Realtor.com. Despite changing market conditions in 2010, the nation’s top search destinations remained remarkably stable and focused on the sunshine states of California, Nevada, Florida, Texas and Arizona.
Bottom Fishing?
Or Just Entertainment?
Despite changing market conditions in 2010, the nation’s most searched destinations remained remarkably consistent, focusing on the sunshine states of California, Nevada, Florida, Texas and Arizona. Whether the strong interest in Real Estate is just window shopping or whether these states will seriously pop first when the buying public feels this is the bottom remains to be seen. Be interesting to see if the heavy search points to an early opportunity.
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The search bunny keeps on going
Its interesting that online search for real estate is as strong as ever. Sales are miserable, people are afraid to buy. They no longer know what value and they have no job security. So, why is search so strong. Realtor.com President, Errol Samuelson notes that Online search is a critical measure of interest in real estate, especially now that more than 90 percent of buyers search for their homes online. So what can we glean from data mining search. Well, it turns out quite a lot.
Search As An Economic Indicator
Studys that indicate that the answer is yes, search can indicate future interest. The National Academy of Sciences of the United States of America (PNAS) recently published a study and concluded that predictive power of search can predict activity several weeks in advance.
Where Are The Top Ten
Sun Belt Still Strong
The top 10 most searched real estate markets in 2010 were established based on the number of visitors that viewed properties in each Metro Service Area (MSA) in the United States from January 2010 to December 2010 on Realtor.com. Despite changing market conditions in 2010, the nation’s top search destinations remained remarkably stable and focused on the sunshine states of California, Nevada, Florida, Texas and Arizona.
Bottom Fishing?
Or Just Entertainment?
Despite changing market conditions in 2010, the nation’s most searched destinations remained remarkably consistent, focusing on the sunshine states of California, Nevada, Florida, Texas and Arizona. Whether the strong interest in Real Estate is just window shopping or whether these states will seriously pop first when the buying public feels this is the bottom remains to be seen. Be interesting to see if the heavy search points to an early opportunity.
Related Articles
Apartment Sector: First One Out
Real Estate Markets: Whats The Catalyst
Thursday
Mortgage Bankers Weekly Update: Mortgage Applications Decrease as Rates Jump
Mortgage Bankers Association for the week of 2/16/2010
Market Composite Index: (loan application volume) a measure of mortgage loan application volume, decreased 9.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7.9 percent compared with the previous week.
Refinance Index: decreased 11.4 percent from the previous week and is the lowest Refinance Index recorded in the survey since the week ending July 3, 2009.
Purchase Index: decreased 5.9 percent from one week earlier. The unadjusted Purchase Index decreased 0.9 percent compared with the previous week and was 18.2 percent lower than the same week one year ago.
Refinance Share of Mortgage Activity: decreased to 64.0 percent of total applications from 66.6 percent the previous week. This is the fourth straight week the share has declined.
Arm Share: increased to 6.0 percent from 5.9 percent of total applications from the previous week.
MBA outlook: (Excerpted from mbaa.org)
Mortgage rates remained above 5% last week, up almost a full percentage point from their October lows, and refinance volume continued to drop, said Michael Fratantoni, MBAs Vice President of Research and Economics. Applications for home purchases also declined on a seasonally adjusted basis. Buyers have not returned to the market as rising rates have reduced affordability, to some extent .
Refinance Index: decreased 11.4 percent from the previous week and is the lowest Refinance Index recorded in the survey since the week ending July 3, 2009.
Purchase Index: decreased 5.9 percent from one week earlier. The unadjusted Purchase Index decreased 0.9 percent compared with the previous week and was 18.2 percent lower than the same week one year ago.
Refinance Share of Mortgage Activity: decreased to 64.0 percent of total applications from 66.6 percent the previous week. This is the fourth straight week the share has declined.
Arm Share: increased to 6.0 percent from 5.9 percent of total applications from the previous week.
MBA outlook: (Excerpted from mbaa.org)
Mortgage rates remained above 5% last week, up almost a full percentage point from their October lows, and refinance volume continued to drop, said Michael Fratantoni, MBAs Vice President of Research and Economics. Applications for home purchases also declined on a seasonally adjusted basis. Buyers have not returned to the market as rising rates have reduced affordability, to some extent .
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Freddie Mac Weekly Update: 30-Year Fixed-Rate Mortgage Drops to 5 Percent
30-year fixed-rate mortgage: Averaged 5.0 percent with an average 0.7 point for the week ending February 17, 2011, down from last week when it averaged 5.05 percent. Last year at this time, the 30-year FRM averaged 4.93 percent.
The 15-year fixed-rate mortgage: Averaged 4.27 percent with an average 0.7 point, down from last week when it averaged 4.29 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.
Five-year indexed hybrid adjustable-rate mortgages ARMs: Averaged 3.87 percent this week, with an average 0.6 point, down from last week when it averaged 3.92 percent. A year ago, the 5-year ARM averaged 4.12 percent.
One-year Treasury-indexed ARMs: Averaged 3.39 percent this week with an average 0.6 point, up from last week when it averaged 3.35 percent. At this time last year, the 1-year ARM averaged 4.23 percent.
Freddie Sayz
The 15-year fixed-rate mortgage: Averaged 4.27 percent with an average 0.7 point, down from last week when it averaged 4.29 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.
Five-year indexed hybrid adjustable-rate mortgages ARMs: Averaged 3.87 percent this week, with an average 0.6 point, down from last week when it averaged 3.92 percent. A year ago, the 5-year ARM averaged 4.12 percent.
One-year Treasury-indexed ARMs: Averaged 3.39 percent this week with an average 0.6 point, up from last week when it averaged 3.35 percent. At this time last year, the 1-year ARM averaged 4.23 percent.
Freddie Sayz
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac
Fixed mortgage rates eased slightly this week and continue to be very affordable. Prior to 2009, interest rates for 30-year fixed-rate mortgages had never been at 5 percent since our survey began in April 1971. In both 1981 and 1982, the rates were over three times as high as they are today.
The housing market is struggling to regain traction despite still historically low rates. New construction on one-family homes dipped slightly in January to an annualized pace of 413,000 units, which was the fewest number since May 2009. In addition, homebuilder confidence didnt improve for the third consecutive month in February.
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Wednesday
Are We Losing Twitter To Brisbane
Twitter, a San Francisco startup is looking to expand its workforce and save some money while doing it. San Francisco may lose Twitter to Brisbane. Twitter needs to grow its employee base and the payroll tax here in the city is 1.5%. Brisbane city has no tax and the internet company is 
thinking of a move.
Pending Legislation
Legislation is being put before the Board of Supervisors to suspend the payroll tax for six years. Any other company, moving to Mid-Market, that pays payroll taxes above $250,000, would also be eligible for the exemption. David Chui, Mayor Lee and Jayne Kim are all on board with this idea of attracting and keeping larger business in San Francisco.
Opposition to the tax makes the point that other companies could begin to use this to make the same case ...we'll move if you tax us. Supervisor John Avalos, worries about who is next if the city allows Twitter a tax break. He muses...could Wells or Bechtel be next to force the citys hand?
Twitter would like to stay in the city and move to bigger digs, hiring thousands of new people wants to make the move to Market and Ninth, an area that would see significant improvement if they did. It would provide an anchor tenant for an area, affected by blight and public safety issues.
Mr. Avalos makes a point, but the upside is all those new jobs and a significant statement for the remake of Mid Market, something the city has been wanting to do. Wouldnt the tax break be made up by all those new jobs and small business sales and payroll taxes. San Francisco rental stock is in the beginnings of an upswing. Many of theses new jobs would certainly underpin the rental market and indirectly support the green shoot beginnings of a recovery in that sector.
Thanks for Reading
www.yourpropertypath.com
thinking of a move.Pending Legislation
Legislation is being put before the Board of Supervisors to suspend the payroll tax for six years. Any other company, moving to Mid-Market, that pays payroll taxes above $250,000, would also be eligible for the exemption. David Chui, Mayor Lee and Jayne Kim are all on board with this idea of attracting and keeping larger business in San Francisco.
Opposition to the tax makes the point that other companies could begin to use this to make the same case ...we'll move if you tax us. Supervisor John Avalos, worries about who is next if the city allows Twitter a tax break. He muses...could Wells or Bechtel be next to force the citys hand?
Twitter would like to stay in the city and move to bigger digs, hiring thousands of new people wants to make the move to Market and Ninth, an area that would see significant improvement if they did. It would provide an anchor tenant for an area, affected by blight and public safety issues.
Mr. Avalos makes a point, but the upside is all those new jobs and a significant statement for the remake of Mid Market, something the city has been wanting to do. Wouldnt the tax break be made up by all those new jobs and small business sales and payroll taxes. San Francisco rental stock is in the beginnings of an upswing. Many of theses new jobs would certainly underpin the rental market and indirectly support the green shoot beginnings of a recovery in that sector.
Thanks for Reading
www.yourpropertypath.com
Thursday
Mortgage Bankers Weekly Update: Mortgage Applications Decrease as Rates Jump
Mortgage Bankers Association for the week of 02/09/2010
Market Composite Index: (loan application volume) a measure of mortgage loan application volume, decreased 5.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3.9 percent compared with the previous week.Refinance Index: decreased 7.7 percent from the previous week
Purchase Index: decreased 1.4 percent from one week earlier. The unadjusted Purchase Index increased 4.8 percent compared with the previous week and was 16.6 percent lower than the same week one year ago.
Refinance Share of Mortgage Activity: decreased to 66.6 percent of total applications from 69.3 percent the previous week. This is the lowest refinance share observed in the survey since the beginning of May 2010.
Arm Share: increased to 5.9 percent from 5.5 percent of total applications from the previous week.
MBA outlook: (Excerpted from mbaa.org)
Mortgage rates increased last week as many incoming economic indicators continue to show stronger growth than had been anticipated. Refinance volume continues to be low, as fewer homeowners with equity have any incentive to refinance, said Michael Fratantoni, MBAs Vice President of Research and Economics. We are at the beginning of the spring buying season, but purchase volume remains weak on a seasonally adjusted basis
We expect that mortgage originations will decrease to $967 billion in 2011, the lowest level of originations since 1997. This is a decline from $1.5 trillion in 2010 and a little under $2.0 trillion in 2009. Purchase originations should increase to $615 billion in 2011 up from $473 billion in 2010. Refinance originations, primarily impacted by the level of mortgage rates, are expected to drop sharply in 2011 to $352 billion and fall further in 2012 to $237 billion. We expect that the refinance share of originations should fall from 69 percent in 2010 to 36 percent in 2011, and then 24 percent in 2012 as rates climb above the 6 percent mark.
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Wednesday
Fannie Mae Raises Borrowers Costs
Costs Will Increase For Buyers Regardless Of Credit Worthiness
Beginning April 1, 2011 Fannie Mae will implement a higher interest rate to borrowers even if they have a perfect credit score for all loans term over 15 years. Freddie Mac will change its fee structure changes on of March 1st.
Loan Level Price Adjustment
Borrowers will be charged either a higher interest rate derived from the size of the down payment or how much equity is in their home for refis.
Banks Get Conservative
Risk vs. Reward
New home buyers shopping for mortgages will face these fee increases
* Someone buying a home with credit OVER 740 with 25% or lower down payment will now pay approx .125% more in rate.
* A borrower with a credit score over 740 refinancing to 80% of the value of their home and taking out additional cash can expect to pay an additional .25% higher in rate.
* Anyone buying or refinancing a condominium (excluding detached condos) with less than 25% down payment (or equity) can expect an increase in rate of almost .5%
* Borrowers without larger down payments will see slightly higher rates.
* Buyers with lower credit scores, they can expect much higher rates.
Fannie and Freddie have learned their lesson. The politics of housing has changed from a congressional mandate to make home ownership more accessable, even to the unquaalified, to a rational and more profitable system. They/we lost a bundle and they are looking at another bad year with foreclosures expected to rise again in 2011.
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A Recent Survey: Is It Time To Buy Rental Property
Beginning April 1, 2011 Fannie Mae will implement a higher interest rate to borrowers even if they have a perfect credit score for all loans term over 15 years. Freddie Mac will change its fee structure changes on of March 1st.
Loan Level Price Adjustment
Borrowers will be charged either a higher interest rate derived from the size of the down payment or how much equity is in their home for refis.
Banks Get Conservative
Risk vs. Reward
New home buyers shopping for mortgages will face these fee increases
* Someone buying a home with credit OVER 740 with 25% or lower down payment will now pay approx .125% more in rate.
* A borrower with a credit score over 740 refinancing to 80% of the value of their home and taking out additional cash can expect to pay an additional .25% higher in rate.
* Anyone buying or refinancing a condominium (excluding detached condos) with less than 25% down payment (or equity) can expect an increase in rate of almost .5%
* Borrowers without larger down payments will see slightly higher rates.
* Buyers with lower credit scores, they can expect much higher rates.
Fannie and Freddie have learned their lesson. The politics of housing has changed from a congressional mandate to make home ownership more accessable, even to the unquaalified, to a rational and more profitable system. They/we lost a bundle and they are looking at another bad year with foreclosures expected to rise again in 2011.
Related Articles
The Politics of Housing
FHA Reforms Shift The Game
A Recent Survey: Is It Time To Buy Rental Property
Sunday
SF Rental Market: Perspective On A Strong Market
San Francisco is often touted as the number one rental market in the US. Rents here are certainly high and due to a strong Tech and Bio Tech industry, Im sure thats true. But the rent board offers us some perspective. This great rental market is not for everyone...
San Franciscos rental housing stock is still dominated by rent-controlled units. Most tenants are
covered by rent control. This means rents can only be raised by certain amounts per year.Effective March 1, 2011 through February 29, 2012, the allowable annual increase amount is 0.5%. Units cannot come up to market rate until they are vacant. So the strong numbers you see reflect units recently available and now increased to reflect the market. Many occupied units are way below market. Often, this part of the story isnt reflected when we discuss San Franciscos strong rental market.
The San Francisco Rental Market
The tech industry drives the San Francisco leasing market.The San Francisco Business Times notes that a second straight quarter of growth with commercial tenants rent a net about a half million square feet than they vacated.
The Business Times goes on to say that SOMA accounted for half the city’s growth and has a total vacancy rate of 9.5%, including sublease space. In contrast, the financial district has a vacancy rate of 16%. Im sure some of the more desirable core neighborhoods are sporting low vacancy rates and grabbing higher rent rates.
Commercial rentals aside, when you factor in the number of the under market rent controlled units that can only raise rents by small percentages the picture becomes more of a mixed bag. Ownership of buildings with large ratios of rent controlled units to market rate units sport high prices but low cash flows.
Photo courtesy of jpalllan
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Wednesday
Case Siller: Will We Double Dip
Case Shiller report shows a deceleration in the annual growth rates in 17 of the 20 MSAs. Housing generally leads the economy out of a recession. This time its not, housing is simply suffering. Not only is money tight but job creation is still a big hurt. In some cities, the decline over the last year was quite sharp.
Artificial Stimulus
The tax credit
A Recent Survey: Is It Time To Buy Rental Property
David M. Blitze,chairman of S.&P.’s index committee tells the NY Times that a double-dip could be confirmed before spring. He goes on to say the series is now only 4.8% and 3.3% above their April 2009 lows. Certainly nine cities set new lows, and with the only positive news concentrated in southern California and Washington DC, the data point to weakness in home prices.
S&P sounds dismal, indeed. David Wyss, S&Ps chief economist tells martketwatch that The recovery in home prices has not only stopped, it's going in reverse, that it's going to get worse before it gets better
S&P sounds dismal, indeed. David Wyss, S&Ps chief economist tells martketwatch that The recovery in home prices has not only stopped, it's going in reverse, that it's going to get worse before it gets better
Some Balance Is Needed
Artificial Stimulus
The tax credit
First, the index to a positive spike due to the tax credit, an artificial inducement to buy. Well it worked, and we saw buyers flood the market. But comparing new data to a spike that doesnt represent normal market behavior, but a artificial spike in home sales due to the tax credit can skew the true picture.
Seasonality
This is the slowest part of the year for home sales and must have something to do with the steep decline
Weather
Could the weather have been worse for the mid west and east coast? Winter is traditionally a poor indicator of market health.
Certainly, this market needs no excuses and Im not second guessing S&P, but lets not lose perspective - winter data is hardly a leading indicator for housing markets and there is more to the story than the data is expressing
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