Today’s News Synopsis:
The Commerce Department said construction spending fell 2.5% from July. Fiserv forecasts a 5.5% decline in home prices this year. According to the Treasury Department, the re-default rate for the Making Home Affordable Program averaged 20.4% after 1 year. Marcus & Millichap expect Orange County rents to rise 4.5% this year.
In The News:
Bloomberg – “Construction Spending in U.S. Unexpectedly Fell to Decade Low” (2-1-11)
“The 2.5 percent drop was the biggest since July and brought the value of all projects down to a $787.9 billion annual rate, the lowest since July 2000, Commerce Department figures showed today in Washington. The median estimate of economists in a Bloomberg survey called for a 0.1 percent gain.”
Housing Wire – “Fiserv sees housing prices stabilizing in most MSAs” (2-1-11)
“Fiserv Inc. (FISV: 63.03 +2.04%) expects home prices to decline 5.5% this year, but three-fourths of the 375 metro areas the company tracks will see prices stabilize by the end of the year with all markets stabilizing by the end of 2012. The company said 25% of all markets already show signs of prices leveling off, although the Fiserv Case-Shiller Indexes, which use data from the Federal Housing Finance Agency, still point to a slow recovery ‘with many false starts,’ especially in areas hit hard by foreclosures.”
Housing Wire – “Rep. Issa wants explanation for Fannie, Freddie legal fees” (2-1-11)
“Last week, Rep. Randy Neugebauer (R-Texas) released the results of his investigation into the fees. Since entering conservatorship in September 2008, Fannie and Freddie have spent more than $160 million in legal fees, including $24 million in defense of former Fannie CEO Frank Raines ($7.9 million), former Chief Financial Officer Tim Howard ($4.5 million) and former Controller Leanne Spencer ($11.8 million), according to the data.”
Housing Wire – “Senate committee considers foreclosure mediation program” (2-1-11)
“The Senate Committee on the Judiciary held a hearing Tuesday regarding possible legislation granting bankruptcy judges the power to require foreclosure mediation between banks and homeowners.”
Housing Wire – “Rosenberg warns against boosting 1Q GDP estimates” (2-1-11)
“David Rosenberg, chief economist and strategist at Toronto-based Gluskin Sheff + Associates, said the high level of housing inventory with many cities facing backlogs between 13 and 15 months’ of supply also continues to hinder growth.”
Bloomberg – “One in Five Mortgages Default Again After Modification” (2-1-11)
“The re-default rate for the Making Home Affordable Program averaged 20.4 percent after 12 months, 15.9 percent after nine months, 10.7 percent after six months and 4.6 percent after three months, according to a report released today by the Treasury Department.”
Orange County Register – “Forecast: O.C. rents to soar 4.5% in ’11” (2-1-11)
“Orange County apartment tenants should brace themselves for the biggest rent hikes in three years, with landlords pocketing 4.5% more rent in 2011 than they did last year, a Los Angeles-based national real estate brokerage said forecast.”
Looking Back:
One year ago, the MBA reported there was a $1.45 trillion balance of outstanding mortgages held by non-bank investors. SIGTARP predicted a second housing bubble. Fannie Mae’s mortgage delinquency rate increased to 5.29% in November 2009. U.S. home construction spending decreased by 2.7 percent within a month.
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California Real Estate Investing News is a post from: The Norris Group