Pending Home Sales Dropped This Month

A drop is observed in the number of contract signed for pending home sales in November over the preceding month, though the sales are still higher from what was recorded in the same month last year.

This is the finding of a report made public by National Association of Realtors (NAR).


According to the report, which is based on a Pending Home Sales Index maintained by NAR, pending home sales recorded a drop of 16 percent from 114.

3 in October to 96 in November this year. The sale percentage of November when compared to the same period of the previous year is found to be higher by about 15.5 percent.

The officials at NAR are optimistic about the gains in sales activity again in early spring as a response by the first time home buyers to the recently expanded tax credt.

Green Buildings: Fewer Sick Days, Higher Rents

Environmentally-friendly construction practices have gotten a lot of hype over the past few years but do they really pay off as an investment? A new study found that tenants in green buildings experience increased productivity and fewer sick days. The research also found that that green buildings have lower vacancy rates and higher rents than non-green counterparts.


The study, conducted by the University of San Diego and commercial real estate broker CB Richard Ellis Group, found that tenants in green buildings such as the Behnisch Architekten-designed Unilever offices in Hamburg above are more productive based on two measures: the average number of tenant sick days and a productivity change. Respondents reported an average of 2.88 fewer sick days in their current green office versus their previous non-green office. About 55% of respondents indicated that employee productivity had improved.


Based on the average tenant salary, an office space of 250 square feet per worker and 250 workdays a year, the decrease in sick days translated into a net impact of nearly $5.00 per square foot per year. The increase in productivity translated into a net impact of about $20 per square foot. The study also showed that green buildings have 3.5% lower vacancy rates and 13% higher rental rates than the market.


The work was based on surveys of 154 buildings under CBRE's management, totaling more than 51.6 million square feet and housing 3,000 tenants in ten markets across the U.S. The study defined a green building as those with LEED certification at any level or those that bear the EPA ENERGY STAR ® label.


Another report out in the past week concluded that constructing new green buildings or retrofitting existing structures with energy efficient air conditioning, solar panels and the like will support 7.9 million U.S. jobs and pump $554 billion into the American economy over the next four years. The study, by the U.S. Green Building Council and Booz Allen Hamilton, determined that green construction spending currently supports more than 2 million American jobs and generates more than $100 billion in gross domestic product and wages.


The economic impact of the total green construction market from 2000 to 2008, the study found, was $178 billion. It created or saved 2.4 million jobs and generated $123 billion in wages.


The U.S. Green Building Council certifies LEED buildings and obviously has an interest in the movement, but Rick Fedrizzi, chief exec of the group said something remarkably down to earth in releasing the report: “Our goal is for the phrase ‘green building’ to become obsolete, by making all building and retrofits green – and transforming every job in our industry into a green job.”


Can't argue with that.

Home Inventories Expected to Rise Due to Bank Foreclosures

Home foreclosures are expected to cause the housing inventory to increase in 2010 as a rising number of homeowners are defaulting on their home loans.


In 2009, a record three million homes went into bank foreclosure. Analysts predict 3.1 million home foreclosures in 2010. The federal home loan-modification program, which is part of the stimulus package, has not improved home foreclosure rates.


Many financial institutions did not have the resources to modify defaulted home loans. Additionally, the program doesn't work for many people, as 61 percent of modified home loans in 2008 still went into bank foreclosure.

Why Will Bank Foreclosures Continue to Rise?

The projected number of bank foreclosures will continue to rise for many reasons, including:


* continued high unemployment.
* the expiration of stimulus package programs that have helped the housing market.
* the large number of adjustable rate home loans that are due to be reset to higher interest rates.
* the postponement of repossessions in 2009 due to pressure from the federal government to modify home loans.
* very low home prices in the real estate market, which cause many homeowners to owe more on their home loans than their homes are worth.


Will the Stimulus Package Programs for the Housing Market Be Extended?
The real estate market has shown some positive signs in late 2009 due to low home sale prices, low mortgage rates, and a home tax credit program that has been extended and expanded.


However, many of the housing portions of the economic stimulus package are scheduled to end in the spring, which is a crucial time for home sales. For example, the home tax credits for first-time home buyers and repeat home buyers expires at the end of April unless they are extended again.


In addition, the Federal Reserve stimulus program that is buying back mortgage-backed securities and agency debt is scheduled to end on March 31. However, there are indications that the program may also be extended, depending on the economy.

Mortgage Rates Start the New Year Slightly Lower Than They Ended the Old Year

McLean, VA today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.09 percent with an average 0.7 point for the week ending January 7, 2009, down from last week when it averaged 5.14 percent. Last year at this time, the 30-year FRM averaged 5.01 percent.

The 15-year FRM this week averaged 4.50 percent with an average 0.7 point, down from last week when it averaged 4.54 percent. A year ago at this time, the 15-year FRM averaged 4.62 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.44 percent this week, with an average 0.6 point, unchanged from last week when it averaged 4.44 percent. A year ago, the 5-year ARM averaged 5.49 percent.

The 1-year Treasury-indexed ARM averaged 4.31 percent this week with an average 0.6 point, down from last week when it averaged 4.33 percent. At this time last year, the 1-year ARM averaged 4.95 percent.


(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.) "Mortgage rates eased slightly this week after rising consecutively through December," said Frank Nothaft, Freddie Mac vice president and chief economist. "Current interest rates for fixed-rate mortgages are just about at their annual average for 2009, while ARM rates are considerably below their averages for last year."


"As the economy strengthens further and the Federal Reserve (Fed) decides to raise its overnight target rate, ARM rates will follow suit because they are typically tied to shorter-term interest rates. However, the federal funds futures market does not anticipate any Fed action until the second half of 2010."

Megan Fox Gets A New House

BUYER: Megan Fox

LOCATION: Los Angeles, CA

PRICE: $2,942,500

SIZE: 5,200 square feet, 4 bedrooms, 5 bathrooms

YOUR MAMAS NOTES: In late November, sultry and sexual Transformers ack-tress Megan Fox went on the boob-toob and told the world that she bought her on-again/off-again boy-beau Brian Austin Green a red 1966 Ford Mustang Fastback. A few weeks later, according to Freddie Feedsusinformation who knows all things real estate in Los Feliz, Miss Fox also bought herself a new home in the Los Feliz area of Los Angeles for, according to property records, $2,942,500.


Listen children, Your Mama has never seen a Transformers movie nor do we intend to see one. Therefore, what little we know about Miss Fox is, for better or worse, based on what we've read in the gossip glossies and on the interweb. Our completely meaningless assessment of Miss Fox is that beehawtcha has a tendency towards verbal diarrhea, frequently whining to the press about everything including Transformers director Michael Bay, her absent boyfriend, the Hollywood grind, and how men are "scared of confident vaginas." Oh, lo-ward have mercy on Miss Fox. Your Mama will slap the sexy right off her 23-year old damn face if she starts complaining about the fat paychecks she pulls in from her crappy acting jobs that allow her to spend millions on a fancy new house.


Listen up her little Miss Fox because Your Mama is going to give you some free and sage advice about how to remain viable in Tinseltown when you've yet to reveal any real acting chops: Bitch and bellyache all you want to your friends and family about how terrible it is it be pretty and how tiresome it it to be compared to Angelina Jolie–who, Miss Fox, is actually an Oscar winning actress, something you'd be so lucky to be–but we suggest you put a sensor in your large-lipped mouth when talking to the press because listening to rich and privileged 20-something year old celebrities complain about their success tends to grate on fans' nerves like nails on a chalkboard and, at the rate you're going, you're going to blather your way to the graveyard of forgotten starlets.


Anyhoo, property records for the mini-manse Your Mama is told Miss Fox bought indicates the 1936 Mediterranean measures 4,052 square feet and includes 4 bedrooms and 5 poopers. Listing information for the recently re-worked residence, however, states the there are 5,200 square feet with 5 bedrooms and 4 poopers including a master suite with walk-in closet, private terrace and a spa-like bathroom with lots of Carrara marble, a free standing soaking tub and a terlit closet that, we are happy to report, has a window.


The house also includes a formal living room with fireplace and several French doors that open to a tiled terrace that runs along the back of the house, a formal dining room, family room, media/pool table room, and a newly done dee-luxe kitchen with wood floors, snow white flat-fronted cabinetry, a Hyundai-sized Viking range, Carrara marble counter tops, and a huge window above the sink with a view of downtown L.A. that is so lovely that it could probably even entice the Dr. Cooter–who avoids dishpan hands with a fervor akin to a middle aged first wife avoiding a much younger plastic boobied second wife–to do some after dinner dishes.


The walled and gated home, according to listing information, also has custom hardwood floors, dee-ziner poopers, restored vintage details, whole-house audio, panoramic views that stretch from downtown to the ocean, a pill-shaped swimming pool with several terraces and lawn areas surrounding it, and–natch–state-of-the-art security which means any of you moe-rons who have the dumb-ass idea to knock on Miss Fox's new door will be greeted with some serious and deserved unpleasantness.


It's unclear if Miss Fox's former fiancée and current man-friend Brian Austin Green, he of Beverly Hills 90210 fame, will be moving his underpants into her new digs but, given that he currently has his 1920s Tudor style house in the Hollywood Hills on the market at $2,395,000, there's a pretty good chance he'll soon need a place to park his Ford Mustang.

Real estate market expected to remain strong in first half of 2010

A new Royal LePage survey predicts Canada's residential real estate market will remain unusually strong through the first half of 2010.

The real estate firm says as confidence in the economic recovery grows, average prices are expected to continue to increase.

Royal LePage executive Phil Soper says the real estate market enters 2010 with "considerable momentum from an unusually strong finish to the previous year."
He says the stimulus effect of low borrowing costs has contributed to a sharp rise in demand that has driven activity to new highs.

Royal LePage says house prices appreciated in late 2009, with fourth quarter price averages higher than fourth quarter 2008.

The average price of detached bungalows rose to $315,055 (up 6 per cent), the price of standard two-storey homes rose to $353,026 (up 5.2 per cent), and the price of a standard condominium rose to $205,756 (up 6.4 per cent).

Regions that saw the strongest declines during the recession are now showing marked gains. Those regions include Toronto and the Lower Mainland, B.C. Vancouver in particular experienced a robust quarter, with home prices rising across all housing types surveyed.

"No other sector of the economy has been as highly affected by economic stimulus as housing," said Soper.

"As consumer confidence has improved, Canadians have shown a lingering reluctance to acquire depreciating assets such as consumer durables, but have embraced the opportunity to invest in real property."

Maharashtra State Govt Increases Real Estate Value by 10-20%

Property in Maharashtra just got more expensive. The state government has increased the market value of real estate by 10-20 per cent in its Ready Reckoner 2010. The ready reckoner is a guide for the market price of residential and commercial properties, based on which stamp duty and registration fee for their sale and purchase are calculated. Under the revised rates, a land owner would have to pay more stamp duty because his land got more expensive; the developer would raise the sale price of his finished property since his land acquisition cost got higher; and a retail buyer would have to cough up more for property, stamp duty and registration fee.

This is likely to have its rippling effect on redevelopment of old, dilapidated buildings in Mumbai and surrounding Tier II cities, too. With the upward revision of rates, properties being developed on textile mill land would also see a sharp rise as the ready reckoner raised their value on an average by 13 per cent. “The state government expects to mobilise Rs 5,075 crore through stamp duty and registration fee by the end of 2009-10,” a senior state government official, who did not want to be quoted, said, justifying the rate revision. A large number of builders and developers representing the Confederation of Real Estate Developers’ Association (Credai) and the Maharashtra Chamber of Housing Industry (MCHI) expressed their dissatisfaction over the decision.

“The increased rates in the ready reckoner will be applicable for land, residential and commercial properties and various premiums charged on additional floor space index (FSI), staircase, etc. This will adversely affect redevelopment of old buildings, chawls and rented houses. There are over 19,000 old and dilapidated buildings in Mumbai alone, in addition to the fresh properties being developed. Same is the story for other Tier II cities,” said a Credai official, requesting not to be quoted. The revised rates would be applicable in Nagpur, Pune, Aurangabad, Amravati and Nanded as well. The Credai official added that with the revised rates, the land that cost Rs 1 crore (Rs 10 million) would now be valued at Rs 1.15 crore (Rs 11.5 million). A flat of Rs 20 lakh would cost Rs 23 lakh, not to mention the extra Rs 15,000 that one would haave to shell out for stamp duty and other charges.

Ranjan Bandalkar, vice-president, MCHI, said residential property buyers would have to pay more transaction cost. “There is a possibility that prices of houses may increase 10-5 per cent in Mumbai and rest of Maharashtra. The government will have to reconsider its decision.” Rajani S Ajmera, former president of MCHI, said the government should not have increased the ready reckoner rates when the real estate sector was just looking up. “We have in fact demanded that stamp duty should be brought down to 3 per cent from 5 per cent. The rationalisation of these rates is necessary.” Credai Vice-President Dharmesh Jain, too, said the government needed to reconsider the decision as the real estate sector was yet to recover from the global economic meltdown.

Credai members also warned that there could be less takers for commercial properties. “Development of commercial properties has already been affected due to the global meltdown and it has yet to see the revival.” Otherwise an annual exercise, the ready reckoner was not revised after January 2008 due the economic downturn.

Invest In Foreign Real Estate Using Your Retirement Funds

U.S. stock markets have rallied recently. If you’ve recouped some of your losses, now could be a good time to consider diversifying a portion of your IRA funds out of U.S. markets by putting them into a home—maybe a winter retreat—overseas.


You can think of it as an investment...or as an insurance policy. There’s no saying what the U.S. markets will do over the next few years and diversifying internationally this way can help limit your U.S. exposure.


The good news is: You can find the property of your dreams anywhere in the world, purchase all or part of it with your retirement assets (gaining the tax advantages that delivers), and eventually take ownership of it—completely legally.


The IRS allows a great deal of flexibility when it comes to investing the assets of your retirement account. As a U.S. citizen, you can use your IRA or other self-directed retirement account to buy international real estate.


The rules governing the ownership of real estate are simple. You can own virtually any kind of real estate you could name in your IRA or other retirement account, including: raw land, condos, office buildings, single-family homes, multi-family homes, apartments, and improved land.


You can own the real estate fully, you can purchase an option on the real estate, or you can buy outright using a land trust, L.L.C., or similar entity.


All of these options are allowed for the kind of investment I’m describing. You can pay for the property in full using retirement assets—or you can finance it.

Commercial Real Estate At Lowest Level Since 2002

The commercial real estate market has been in free fall the past couple of years. We think that residential real estate took a hit, but the commercial markets are down 44% since the peak in October 2007, a scant 26 months ago.


On a good note, declines are expected to slow down in the coming months. But the caveat is that tight lending markets are going to continue to impact the commercial real estate market. Since commercial debt is cyclical commercial borrowers need to refinance much more often than residential property owners.

2010 is shaping up to be a rough year for commercial real estate property owners.

He Moody’s/REAL Commercial Property Price Indices fell 1.5 percent in October from September to the lowest since August 2002. Prices were down 36 percent from a year earlier and are 44 percent below the peak in October 2007, Moody’s Investors Service Inc. said in a statement.


Values are dropping as U.S. unemployment climbs and consumers cut spending. Office vacancies may approach 20 percent next year as employers hold off hiring, commercial property brokers Jones Lang LaSalle Inc. and Grubb & Ellis Co. said last month. via Bloomberg.