Saturday, January 29, 2011

Mortgage refinances may drop 77% by 2012 « HousingWire

Residential mortgage refinances are expected to deteriorate over the next two years due to factors not limited to rising interest rates. Some are predicting that mortgage refinancings, in fact, will fall by 77% by 2012 and drag down the overall market for originations.

Total refinances hit about $1 trillion in 2010 and accounted for 69% of the market share for originations, according to the Mortgage Bankers Association. The trade association is predicting that will drop more than two-thirds to just $352 billion and comprise of 36% market share in 2011.

MBA anticipates only $236 billion worth of refinances to take place in 2012.

Mortgage purchases will not make up for the losses in the refinance sector, according to the firm's numbers. Purchase originations are expected to increase to $614 billion from $473 billion in 2011 (up 30%), bringing the total originations for the year to $966 billion.

In 2010, origination transactions summed $1.5 trillion, which means a nearly 36% drop in overall residential lending activity.

MBA Senior Vice President and Chief Economist Jay Brinkmann said rising mortgage rates will filter the market for refinances, and that repurchase requests from Fannie Mae, Freddie Mac and mortgage insurers will also impact the market.

"This will continue to hold down originations," he said.

The MBA forecasts new home sales will rise and existing home sales will fall, up to 351,000 and down to 4.8 million, respectively.

Financial services firm KBW reported a 17.5% increase in new home sales from November to December, putting the 2010 year-end total at 329,000. December new home sales, which totaled about 22,000, were down 7.6% compared to a year earlier.

KBW said the average monthly sale volume for 2010 was between 20,000 and 26,000.

"Assuming the absolute level of monthly sales remains near current levels in the near term, the annualized new home sales numbers should continue to improve on seasonal factors in coming months," the firm said.

by Christine Ricciardi HousingWire January 27, 2010





Mortgage refinances may drop 77% by 2012 « HousingWire

Mortgage refinances may drop 77% by 2012 « HousingWire

Residential mortgage refinances are expected to deteriorate over the next two years due to factors not limited to rising interest rates. Some are predicting that mortgage refinancings, in fact, will fall by 77% by 2012 and drag down the overall market for originations.

Total refinances hit about $1 trillion in 2010 and accounted for 69% of the market share for originations, according to the Mortgage Bankers Association. The trade association is predicting that will drop more than two-thirds to just $352 billion and comprise of 36% market share in 2011.

MBA anticipates only $236 billion worth of refinances to take place in 2012.

Mortgage purchases will not make up for the losses in the refinance sector, according to the firm's numbers. Purchase originations are expected to increase to $614 billion from $473 billion in 2011 (up 30%), bringing the total originations for the year to $966 billion.

In 2010, origination transactions summed $1.5 trillion, which means a nearly 36% drop in overall residential lending activity.

MBA Senior Vice President and Chief Economist Jay Brinkmann said rising mortgage rates will filter the market for refinances, and that repurchase requests from Fannie Mae, Freddie Mac and mortgage insurers will also impact the market.

"This will continue to hold down originations," he said.

The MBA forecasts new home sales will rise and existing home sales will fall, up to 351,000 and down to 4.8 million, respectively.

Financial services firm KBW reported a 17.5% increase in new home sales from November to December, putting the 2010 year-end total at 329,000. December new home sales, which totaled about 22,000, were down 7.6% compared to a year earlier.

KBW said the average monthly sale volume for 2010 was between 20,000 and 26,000.

"Assuming the absolute level of monthly sales remains near current levels in the near term, the annualized new home sales numbers should continue to improve on seasonal factors in coming months," the firm said.

by Christine Ricciardi HousingWire January 27, 2010






Mortgage refinances may drop 77% by 2012 « HousingWire

Mortgage refinances may drop 77% by 2012 « HousingWire

Residential mortgage refinances are expected to deteriorate over the next two years due to factors not limited to rising interest rates. Some are predicting that mortgage refinancings, in fact, will fall by 77% by 2012 and drag down the overall market for originations.

Total refinances hit about $1 trillion in 2010 and accounted for 69% of the market share for originations, according to the Mortgage Bankers Association. The trade association is predicting that will drop more than two-thirds to just $352 billion and comprise of 36% market share in 2011.

MBA anticipates only $236 billion worth of refinances to take place in 2012.

Mortgage purchases will not make up for the losses in the refinance sector, according to the firm's numbers. Purchase originations are expected to increase to $614 billion from $473 billion in 2011 (up 30%), bringing the total originations for the year to $966 billion.

In 2010, origination transactions summed $1.5 trillion, which means a nearly 36% drop in overall residential lending activity.

MBA Senior Vice President and Chief Economist Jay Brinkmann said rising mortgage rates will filter the market for refinances, and that repurchase requests from Fannie Mae, Freddie Mac and mortgage insurers will also impact the market.

"This will continue to hold down originations," he said.

The MBA forecasts new home sales will rise and existing home sales will fall, up to 351,000 and down to 4.8 million, respectively.

Financial services firm KBW reported a 17.5% increase in new home sales from November to December, putting the 2010 year-end total at 329,000. December new home sales, which totaled about 22,000, were down 7.6% compared to a year earlier.

KBW said the average monthly sale volume for 2010 was between 20,000 and 26,000.

"Assuming the absolute level of monthly sales remains near current levels in the near term, the annualized new home sales numbers should continue to improve on seasonal factors in coming months," the firm said.

by Christine Ricciardi HousingWire January 27, 2010






Mortgage refinances may drop 77% by 2012 « HousingWire

Mortgage refinances may drop 77% by 2012 « HousingWire

Residential mortgage refinances are expected to deteriorate over the next two years due to factors not limited to rising interest rates. Some are predicting that mortgage refinancings, in fact, will fall by 77% by 2012 and drag down the overall market for originations.

Total refinances hit about $1 trillion in 2010 and accounted for 69% of the market share for originations, according to the Mortgage Bankers Association. The trade association is predicting that will drop more than two-thirds to just $352 billion and comprise of 36% market share in 2011.

MBA anticipates only $236 billion worth of refinances to take place in 2012.

Mortgage purchases will not make up for the losses in the refinance sector, according to the firm's numbers. Purchase originations are expected to increase to $614 billion from $473 billion in 2011 (up 30%), bringing the total originations for the year to $966 billion.

In 2010, origination transactions summed $1.5 trillion, which means a nearly 36% drop in overall residential lending activity.

MBA Senior Vice President and Chief Economist Jay Brinkmann said rising mortgage rates will filter the market for refinances, and that repurchase requests from Fannie Mae, Freddie Mac and mortgage insurers will also impact the market.

"This will continue to hold down originations," he said.

The MBA forecasts new home sales will rise and existing home sales will fall, up to 351,000 and down to 4.8 million, respectively.

Financial services firm KBW reported a 17.5% increase in new home sales from November to December, putting the 2010 year-end total at 329,000. December new home sales, which totaled about 22,000, were down 7.6% compared to a year earlier.

KBW said the average monthly sale volume for 2010 was between 20,000 and 26,000.

"Assuming the absolute level of monthly sales remains near current levels in the near term, the annualized new home sales numbers should continue to improve on seasonal factors in coming months," the firm said.

by Christine Ricciardi HousingWire January 27, 2010






Mortgage refinances may drop 77% by 2012 « HousingWire

Mortgage refinances may drop 77% by 2012 « HousingWire

Residential mortgage refinances are expected to deteriorate over the next two years due to factors not limited to rising interest rates. Some are predicting that mortgage refinancings, in fact, will fall by 77% by 2012 and drag down the overall market for originations.

Total refinances hit about $1 trillion in 2010 and accounted for 69% of the market share for originations, according to the Mortgage Bankers Association. The trade association is predicting that will drop more than two-thirds to just $352 billion and comprise of 36% market share in 2011.

MBA anticipates only $236 billion worth of refinances to take place in 2012.

Mortgage purchases will not make up for the losses in the refinance sector, according to the firm's numbers. Purchase originations are expected to increase to $614 billion from $473 billion in 2011 (up 30%), bringing the total originations for the year to $966 billion.

In 2010, origination transactions summed $1.5 trillion, which means a nearly 36% drop in overall residential lending activity.

MBA Senior Vice President and Chief Economist Jay Brinkmann said rising mortgage rates will filter the market for refinances, and that repurchase requests from Fannie Mae, Freddie Mac and mortgage insurers will also impact the market.

"This will continue to hold down originations," he said.

The MBA forecasts new home sales will rise and existing home sales will fall, up to 351,000 and down to 4.8 million, respectively.

Financial services firm KBW reported a 17.5% increase in new home sales from November to December, putting the 2010 year-end total at 329,000. December new home sales, which totaled about 22,000, were down 7.6% compared to a year earlier.

KBW said the average monthly sale volume for 2010 was between 20,000 and 26,000.

"Assuming the absolute level of monthly sales remains near current levels in the near term, the annualized new home sales numbers should continue to improve on seasonal factors in coming months," the firm said.

by Christine Ricciardi HousingWire January 27, 2010






Mortgage refinances may drop 77% by 2012 « HousingWire

Mortgage refinances may drop 77% by 2012 « HousingWire

Residential mortgage refinances are expected to deteriorate over the next two years due to factors not limited to rising interest rates. Some are predicting that mortgage refinancings, in fact, will fall by 77% by 2012 and drag down the overall market for originations.

Total refinances hit about $1 trillion in 2010 and accounted for 69% of the market share for originations, according to the Mortgage Bankers Association. The trade association is predicting that will drop more than two-thirds to just $352 billion and comprise of 36% market share in 2011.

MBA anticipates only $236 billion worth of refinances to take place in 2012.

Mortgage purchases will not make up for the losses in the refinance sector, according to the firm's numbers. Purchase originations are expected to increase to $614 billion from $473 billion in 2011 (up 30%), bringing the total originations for the year to $966 billion.

In 2010, origination transactions summed $1.5 trillion, which means a nearly 36% drop in overall residential lending activity.

MBA Senior Vice President and Chief Economist Jay Brinkmann said rising mortgage rates will filter the market for refinances, and that repurchase requests from Fannie Mae, Freddie Mac and mortgage insurers will also impact the market.

"This will continue to hold down originations," he said.

The MBA forecasts new home sales will rise and existing home sales will fall, up to 351,000 and down to 4.8 million, respectively.

Financial services firm KBW reported a 17.5% increase in new home sales from November to December, putting the 2010 year-end total at 329,000. December new home sales, which totaled about 22,000, were down 7.6% compared to a year earlier.

KBW said the average monthly sale volume for 2010 was between 20,000 and 26,000.

"Assuming the absolute level of monthly sales remains near current levels in the near term, the annualized new home sales numbers should continue to improve on seasonal factors in coming months," the firm said.

by Christine Ricciardi HousingWire January 27, 2010






Mortgage refinances may drop 77% by 2012 « HousingWire

Mortgage refinances may drop 77% by 2012 « HousingWire

Residential mortgage refinances are expected to deteriorate over the next two years due to factors not limited to rising interest rates. Some are predicting that mortgage refinancings, in fact, will fall by 77% by 2012 and drag down the overall market for originations.

Total refinances hit about $1 trillion in 2010 and accounted for 69% of the market share for originations, according to the Mortgage Bankers Association. The trade association is predicting that will drop more than two-thirds to just $352 billion and comprise of 36% market share in 2011.

MBA anticipates only $236 billion worth of refinances to take place in 2012.

Mortgage purchases will not make up for the losses in the refinance sector, according to the firm's numbers. Purchase originations are expected to increase to $614 billion from $473 billion in 2011 (up 30%), bringing the total originations for the year to $966 billion.

In 2010, origination transactions summed $1.5 trillion, which means a nearly 36% drop in overall residential lending activity.

MBA Senior Vice President and Chief Economist Jay Brinkmann said rising mortgage rates will filter the market for refinances, and that repurchase requests from Fannie Mae, Freddie Mac and mortgage insurers will also impact the market.

"This will continue to hold down originations," he said.

The MBA forecasts new home sales will rise and existing home sales will fall, up to 351,000 and down to 4.8 million, respectively.

Financial services firm KBW reported a 17.5% increase in new home sales from November to December, putting the 2010 year-end total at 329,000. December new home sales, which totaled about 22,000, were down 7.6% compared to a year earlier.

KBW said the average monthly sale volume for 2010 was between 20,000 and 26,000.

"Assuming the absolute level of monthly sales remains near current levels in the near term, the annualized new home sales numbers should continue to improve on seasonal factors in coming months," the firm said.

by Christine Ricciardi HousingWire January 27, 2010






Mortgage refinances may drop 77% by 2012 « HousingWire

Mortgage refinances may drop 77% by 2012 « HousingWire

Residential mortgage refinances are expected to deteriorate over the next two years due to factors not limited to rising interest rates. Some are predicting that mortgage refinancings, in fact, will fall by 77% by 2012 and drag down the overall market for originations.

Total refinances hit about $1 trillion in 2010 and accounted for 69% of the market share for originations, according to the Mortgage Bankers Association. The trade association is predicting that will drop more than two-thirds to just $352 billion and comprise of 36% market share in 2011.

MBA anticipates only $236 billion worth of refinances to take place in 2012.

Mortgage purchases will not make up for the losses in the refinance sector, according to the firm's numbers. Purchase originations are expected to increase to $614 billion from $473 billion in 2011 (up 30%), bringing the total originations for the year to $966 billion.

In 2010, origination transactions summed $1.5 trillion, which means a nearly 36% drop in overall residential lending activity.

MBA Senior Vice President and Chief Economist Jay Brinkmann said rising mortgage rates will filter the market for refinances, and that repurchase requests from Fannie Mae, Freddie Mac and mortgage insurers will also impact the market.

"This will continue to hold down originations," he said.

The MBA forecasts new home sales will rise and existing home sales will fall, up to 351,000 and down to 4.8 million, respectively.

Financial services firm KBW reported a 17.5% increase in new home sales from November to December, putting the 2010 year-end total at 329,000. December new home sales, which totaled about 22,000, were down 7.6% compared to a year earlier.

KBW said the average monthly sale volume for 2010 was between 20,000 and 26,000.

"Assuming the absolute level of monthly sales remains near current levels in the near term, the annualized new home sales numbers should continue to improve on seasonal factors in coming months," the firm said.

by Christine Ricciardi HousingWire January 27, 2010






Mortgage refinances may drop 77% by 2012 « HousingWire

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Tuesday, January 25, 2011

Market Recap - Week Ending January 21, 2011

Stronger than expected economic data with a hint of higher inflation was negative for mortgage markets this week. Concerns about the level of demand for US securities from China added to the pressure. As a result, mortgage rates ended the week higher.

A number of factors combined during the week to push mortgage rates higher. The recent trend of improving economic data continued this week in the housing sector. The inflation component of the Philly Fed manufacturing report also revealed a sharp increase. Later in the week, a Treasury auction for securities which provide protection from inflation showed that investor concerns about future inflation are growing. Investors also worried about a decline in demand for US bonds from China. The Treasury reported that China was a net seller of Treasury securities in November. As the largest foreign holder of US fixed-income securities, any sustained drop in demand from China would have a large impact on US bond markets, including mortgage-backed securities (MBS) markets.

Overall, this week's housing sector data was positive. December Existing Home Sales rose 12% from November to an annual rate of 5.28 million units. The inventory of unsold existing homes declined 4% to an 8.1-month supply. First-time buyers accounted for 33% of existing home sales. December Housing Starts fell 4% from November, but December Building Permits, a leading indicator, rose 17% to the highest level since March. The performance of the housing market varied in different regions, but to see improvement on the national level is encouraging.

The biggest economic event next week will be Wednesday's FOMC meeting. Investors will be looking for an update on the economy and the Fed's plans for monetary policy. The most important economic data will be Friday's report on Gross Domestic Product (GDP), the broadest measure of economic growth. Before that, New Home Sales will be released on Wednesday. Pending Home Sales, a leading indicator for the housing sector, and Durable Orders will come out on Thursday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.


Market Recap - Week Ending January 21, 2011

Market Recap - Week Ending January 21, 2011

Stronger than expected economic data with a hint of higher inflation was negative for mortgage markets this week. Concerns about the level of demand for US securities from China added to the pressure. As a result, mortgage rates ended the week higher.

A number of factors combined during the week to push mortgage rates higher. The recent trend of improving economic data continued this week in the housing sector. The inflation component of the Philly Fed manufacturing report also revealed a sharp increase. Later in the week, a Treasury auction for securities which provide protection from inflation showed that investor concerns about future inflation are growing. Investors also worried about a decline in demand for US bonds from China. The Treasury reported that China was a net seller of Treasury securities in November. As the largest foreign holder of US fixed-income securities, any sustained drop in demand from China would have a large impact on US bond markets, including mortgage-backed securities (MBS) markets.

Overall, this week's housing sector data was positive. December Existing Home Sales rose 12% from November to an annual rate of 5.28 million units. The inventory of unsold existing homes declined 4% to an 8.1-month supply. First-time buyers accounted for 33% of existing home sales. December Housing Starts fell 4% from November, but December Building Permits, a leading indicator, rose 17% to the highest level since March. The performance of the housing market varied in different regions, but to see improvement on the national level is encouraging.

The biggest economic event next week will be Wednesday's FOMC meeting. Investors will be looking for an update on the economy and the Fed's plans for monetary policy. The most important economic data will be Friday's report on Gross Domestic Product (GDP), the broadest measure of economic growth. Before that, New Home Sales will be released on Wednesday. Pending Home Sales, a leading indicator for the housing sector, and Durable Orders will come out on Thursday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.


Market Recap - Week Ending January 21, 2011

Market Recap - Week Ending January 21, 2011

Stronger than expected economic data with a hint of higher inflation was negative for mortgage markets this week. Concerns about the level of demand for US securities from China added to the pressure. As a result, mortgage rates ended the week higher.

A number of factors combined during the week to push mortgage rates higher. The recent trend of improving economic data continued this week in the housing sector. The inflation component of the Philly Fed manufacturing report also revealed a sharp increase. Later in the week, a Treasury auction for securities which provide protection from inflation showed that investor concerns about future inflation are growing. Investors also worried about a decline in demand for US bonds from China. The Treasury reported that China was a net seller of Treasury securities in November. As the largest foreign holder of US fixed-income securities, any sustained drop in demand from China would have a large impact on US bond markets, including mortgage-backed securities (MBS) markets.

Overall, this week's housing sector data was positive. December Existing Home Sales rose 12% from November to an annual rate of 5.28 million units. The inventory of unsold existing homes declined 4% to an 8.1-month supply. First-time buyers accounted for 33% of existing home sales. December Housing Starts fell 4% from November, but December Building Permits, a leading indicator, rose 17% to the highest level since March. The performance of the housing market varied in different regions, but to see improvement on the national level is encouraging.

The biggest economic event next week will be Wednesday's FOMC meeting. Investors will be looking for an update on the economy and the Fed's plans for monetary policy. The most important economic data will be Friday's report on Gross Domestic Product (GDP), the broadest measure of economic growth. Before that, New Home Sales will be released on Wednesday. Pending Home Sales, a leading indicator for the housing sector, and Durable Orders will come out on Thursday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.


Market Recap - Week Ending January 21, 2011

Market Recap - Week Ending January 21, 2011

Stronger than expected economic data with a hint of higher inflation was negative for mortgage markets this week. Concerns about the level of demand for US securities from China added to the pressure. As a result, mortgage rates ended the week higher.

A number of factors combined during the week to push mortgage rates higher. The recent trend of improving economic data continued this week in the housing sector. The inflation component of the Philly Fed manufacturing report also revealed a sharp increase. Later in the week, a Treasury auction for securities which provide protection from inflation showed that investor concerns about future inflation are growing. Investors also worried about a decline in demand for US bonds from China. The Treasury reported that China was a net seller of Treasury securities in November. As the largest foreign holder of US fixed-income securities, any sustained drop in demand from China would have a large impact on US bond markets, including mortgage-backed securities (MBS) markets.

Overall, this week's housing sector data was positive. December Existing Home Sales rose 12% from November to an annual rate of 5.28 million units. The inventory of unsold existing homes declined 4% to an 8.1-month supply. First-time buyers accounted for 33% of existing home sales. December Housing Starts fell 4% from November, but December Building Permits, a leading indicator, rose 17% to the highest level since March. The performance of the housing market varied in different regions, but to see improvement on the national level is encouraging.

The biggest economic event next week will be Wednesday's FOMC meeting. Investors will be looking for an update on the economy and the Fed's plans for monetary policy. The most important economic data will be Friday's report on Gross Domestic Product (GDP), the broadest measure of economic growth. Before that, New Home Sales will be released on Wednesday. Pending Home Sales, a leading indicator for the housing sector, and Durable Orders will come out on Thursday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.


Market Recap - Week Ending January 21, 2011

Market Recap - Week Ending January 21, 2011

Stronger than expected economic data with a hint of higher inflation was negative for mortgage markets this week. Concerns about the level of demand for US securities from China added to the pressure. As a result, mortgage rates ended the week higher.

A number of factors combined during the week to push mortgage rates higher. The recent trend of improving economic data continued this week in the housing sector. The inflation component of the Philly Fed manufacturing report also revealed a sharp increase. Later in the week, a Treasury auction for securities which provide protection from inflation showed that investor concerns about future inflation are growing. Investors also worried about a decline in demand for US bonds from China. The Treasury reported that China was a net seller of Treasury securities in November. As the largest foreign holder of US fixed-income securities, any sustained drop in demand from China would have a large impact on US bond markets, including mortgage-backed securities (MBS) markets.

Overall, this week's housing sector data was positive. December Existing Home Sales rose 12% from November to an annual rate of 5.28 million units. The inventory of unsold existing homes declined 4% to an 8.1-month supply. First-time buyers accounted for 33% of existing home sales. December Housing Starts fell 4% from November, but December Building Permits, a leading indicator, rose 17% to the highest level since March. The performance of the housing market varied in different regions, but to see improvement on the national level is encouraging.

The biggest economic event next week will be Wednesday's FOMC meeting. Investors will be looking for an update on the economy and the Fed's plans for monetary policy. The most important economic data will be Friday's report on Gross Domestic Product (GDP), the broadest measure of economic growth. Before that, New Home Sales will be released on Wednesday. Pending Home Sales, a leading indicator for the housing sector, and Durable Orders will come out on Thursday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.


Market Recap - Week Ending January 21, 2011

Market Recap - Week Ending January 21, 2011

Stronger than expected economic data with a hint of higher inflation was negative for mortgage markets this week. Concerns about the level of demand for US securities from China added to the pressure. As a result, mortgage rates ended the week higher.

A number of factors combined during the week to push mortgage rates higher. The recent trend of improving economic data continued this week in the housing sector. The inflation component of the Philly Fed manufacturing report also revealed a sharp increase. Later in the week, a Treasury auction for securities which provide protection from inflation showed that investor concerns about future inflation are growing. Investors also worried about a decline in demand for US bonds from China. The Treasury reported that China was a net seller of Treasury securities in November. As the largest foreign holder of US fixed-income securities, any sustained drop in demand from China would have a large impact on US bond markets, including mortgage-backed securities (MBS) markets.

Overall, this week's housing sector data was positive. December Existing Home Sales rose 12% from November to an annual rate of 5.28 million units. The inventory of unsold existing homes declined 4% to an 8.1-month supply. First-time buyers accounted for 33% of existing home sales. December Housing Starts fell 4% from November, but December Building Permits, a leading indicator, rose 17% to the highest level since March. The performance of the housing market varied in different regions, but to see improvement on the national level is encouraging.

The biggest economic event next week will be Wednesday's FOMC meeting. Investors will be looking for an update on the economy and the Fed's plans for monetary policy. The most important economic data will be Friday's report on Gross Domestic Product (GDP), the broadest measure of economic growth. Before that, New Home Sales will be released on Wednesday. Pending Home Sales, a leading indicator for the housing sector, and Durable Orders will come out on Thursday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.


Market Recap - Week Ending January 21, 2011

Market Recap - Week Ending January 21, 2011

Stronger than expected economic data with a hint of higher inflation was negative for mortgage markets this week. Concerns about the level of demand for US securities from China added to the pressure. As a result, mortgage rates ended the week higher.

A number of factors combined during the week to push mortgage rates higher. The recent trend of improving economic data continued this week in the housing sector. The inflation component of the Philly Fed manufacturing report also revealed a sharp increase. Later in the week, a Treasury auction for securities which provide protection from inflation showed that investor concerns about future inflation are growing. Investors also worried about a decline in demand for US bonds from China. The Treasury reported that China was a net seller of Treasury securities in November. As the largest foreign holder of US fixed-income securities, any sustained drop in demand from China would have a large impact on US bond markets, including mortgage-backed securities (MBS) markets.

Overall, this week's housing sector data was positive. December Existing Home Sales rose 12% from November to an annual rate of 5.28 million units. The inventory of unsold existing homes declined 4% to an 8.1-month supply. First-time buyers accounted for 33% of existing home sales. December Housing Starts fell 4% from November, but December Building Permits, a leading indicator, rose 17% to the highest level since March. The performance of the housing market varied in different regions, but to see improvement on the national level is encouraging.

The biggest economic event next week will be Wednesday's FOMC meeting. Investors will be looking for an update on the economy and the Fed's plans for monetary policy. The most important economic data will be Friday's report on Gross Domestic Product (GDP), the broadest measure of economic growth. Before that, New Home Sales will be released on Wednesday. Pending Home Sales, a leading indicator for the housing sector, and Durable Orders will come out on Thursday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.


Market Recap - Week Ending January 21, 2011

Sunday, January 23, 2011

Commercial-real-estate market registers positive changes

The Phoenix-area commercial-real-estate market passed a significant milestone in the fourth quarter, but you won't find evidence of it by looking at statistics.

That's because the positive changes were psychological, rather than economic, property investors and brokers said.

About three years after the area's commercial-real-estate market followed housing down the drain, a large number of struggling property owners who had been holding out for a miracle recovery finally began to accept the truth, investor Steven Jaffe and others said.

At the same time, a number of real-estate investment firms that had been hanging onto cash in anticipation of a desperation-fueled commercial-property giveaway finally realized it wasn't going to happen.

"The panic was gone, and the blind optimism that everything was going to turn around was gone," said Jaffe, executive vice president and general counsel for BH Properties LLC, a Los Angeles-based real-estate investment firm.

BH Properties recently acquired the 320-unit Fiesta Park apartment complex, 1033 S. Longmore, in Mesa, for $5.5 million.

It was the company's first purchase in the Phoenix in nearly three years, he said.

"Our last acquisition was in April 2008 - that's when we put the brakes on," he said.

Jaffe said the company is now actively seeking more Phoenix-area apartment buildings to buy and that it also would consider picking up some retail and industrial properties for the right price.

While sales of office, industrial and retail properties remained slow in 2010, the number of interested buyers looking for deals increased dramatically, according to area brokers and investors.

They also reported an explosion of leasing activity as businesses made a mad rush to lock in long-term lease rates at market-bottom prices.

"I'm about ready to call the bottom in the office market," said Jim Achen Jr., senior vice president at commercial-real-estate firm Transwestern in Phoenix.

Achen and fellow Transwestern broker William Zurek have closed on two huge lease deals within the past month, one for 95,000 square feet at ASU Research Park, in Tempe, to DuPont Air Products NanoMaterials LLC and the other for 135,114 square feet at 2512 W. Dunlap Ave., in Phoenix, to IT-services firm Cognizant.

In all, Phoenix-area businesses in 2010 signed new leases on a net 5.9 million square feet of office space, said Craig Henig, senior managing director of commercial-real-estate firm CB Richard Ellis in Phoenix.

All that movement rivals the amount of activity during the local real-estate market's peak years of 2005 and 2006, Henig said, but it didn't cause a significant gain in leased space overall.

The total pickup of about 234,000 square feet made 2010 a turning point after two years of net decreases, he said, but it also shows that the vast majority of activity came from local moves that did not involve any expansion.

Still, there were more announcements about new commercial construction projects during the past month than there had been during the entire previous year.

One came from luxury-apartment-community builder Alliance Residential Co., which said last week that it plans to build a 270-unit apartment community at the 26th Street and Camelback Road location that once was home to the Hard Rock Cafe, and also where real-estate mogul and TV personality Donald Trump had planned back in 2004 to build a $200 million resort.

Another came from data-center operator Digital Realty Trust Inc., which announced Monday that it would add 226,000 square feet to its existing data center at 2121 S. Price Road in Chandler.

Still, the Phoenix area isn't likely to see any big announcements about new office construction for quite some time, said Bryon Carney, president and managing partner of Cassidy Turley BRE Commercial in Phoenix.

More than one out of every four square feet of rentable office space was vacant as of Dec. 31, he said, which means a lot of excess supply that likely would take years to fill.

Still, all of the commercial-real-estate deal makers said 2011 was going to see a sharp rise in sale transactions, nearly all of them driven by sellers' financial troubles.

Henig said about 95 percent of the commercial-real-estate sales in 2010 were short-sale- or foreclosure-driven, he said, a trend that's expected to continue for at least two more years.

Achen said lenders and "special servicers," hired to mitigate securitized commercial-real-estate loan losses on behalf of the investors, have begun to step up their foreclosure activities, a sign that they believe the properties slated for foreclosure are once again marketable.

"I do think special servicers are feeling confident enough in the market to go ahead and foreclose," he said.

Scottsdale, southeast Valley gained the most office tenants in 2010

Office properties in Scottsdale and the southeast Valley added a net 782,000 square feet of rented office space, while north Phoenix and the Camelback/Piestewa Peak area lost about 774,000 square feet due to tenants vacating.

Regional submarketRentable office space (sq. ft.)Office vacancy rateNet change in rented office space (sq. ft.)Office under construction (sq. ft.)Average 1-year lease rate (per sq. ft.)
West Phoenix2.7 million39.8%19,5420$23.05
North Phoenix8.4 million28.1%(-251,931)0$19.08
Desert Ridge/Paradise Valley1.9 million31.8%23,5120$23.77
Camelback/Piestewa Peak10.1 million28.6%(-212,141)0$23.86
Central Business District16.4 million20.7%(-66,850)0$21.68
East Phoenix8.7 million22%(-60,143)0$19.92
Scottsdale17.4 million27.4%437,9700$22.40
Southeast Valley10.5 million28.7%343,7110$21.16
Metro Phoenix76.2 million26.2%233,6700$21.77

Source: CB Richard Ellis


MORE ON THIS TOPIC

Industrial-property sector improves; office and retail vacancies worsen

The vacancy rate for industrial and warehouse properties in the Phoenix area decreased in 2010. Vacancy rates for office and retail space were up slightly.

Property typeVacancy rate 2010Vacancy rate 2009
Office26.2%25.9%
Retail12.2%11.1%
Industrial14.7%16.1%

Source: CB Richard Ellis

by J. Craig Anderson
The Arizona Republic Jan. 23, 2011 12:00 AM



Commercial-real-estate market registers positive changes

Commercial-real-estate market registers positive changes

The Phoenix-area commercial-real-estate market passed a significant milestone in the fourth quarter, but you won't find evidence of it by looking at statistics.

That's because the positive changes were psychological, rather than economic, property investors and brokers said.

About three years after the area's commercial-real-estate market followed housing down the drain, a large number of struggling property owners who had been holding out for a miracle recovery finally began to accept the truth, investor Steven Jaffe and others said.

At the same time, a number of real-estate investment firms that had been hanging onto cash in anticipation of a desperation-fueled commercial-property giveaway finally realized it wasn't going to happen.

"The panic was gone, and the blind optimism that everything was going to turn around was gone," said Jaffe, executive vice president and general counsel for BH Properties LLC, a Los Angeles-based real-estate investment firm.

BH Properties recently acquired the 320-unit Fiesta Park apartment complex, 1033 S. Longmore, in Mesa, for $5.5 million.

It was the company's first purchase in the Phoenix in nearly three years, he said.

"Our last acquisition was in April 2008 - that's when we put the brakes on," he said.

Jaffe said the company is now actively seeking more Phoenix-area apartment buildings to buy and that it also would consider picking up some retail and industrial properties for the right price.

While sales of office, industrial and retail properties remained slow in 2010, the number of interested buyers looking for deals increased dramatically, according to area brokers and investors.

They also reported an explosion of leasing activity as businesses made a mad rush to lock in long-term lease rates at market-bottom prices.

"I'm about ready to call the bottom in the office market," said Jim Achen Jr., senior vice president at commercial-real-estate firm Transwestern in Phoenix.

Achen and fellow Transwestern broker William Zurek have closed on two huge lease deals within the past month, one for 95,000 square feet at ASU Research Park, in Tempe, to DuPont Air Products NanoMaterials LLC and the other for 135,114 square feet at 2512 W. Dunlap Ave., in Phoenix, to IT-services firm Cognizant.

In all, Phoenix-area businesses in 2010 signed new leases on a net 5.9 million square feet of office space, said Craig Henig, senior managing director of commercial-real-estate firm CB Richard Ellis in Phoenix.

All that movement rivals the amount of activity during the local real-estate market's peak years of 2005 and 2006, Henig said, but it didn't cause a significant gain in leased space overall.

The total pickup of about 234,000 square feet made 2010 a turning point after two years of net decreases, he said, but it also shows that the vast majority of activity came from local moves that did not involve any expansion.

Still, there were more announcements about new commercial construction projects during the past month than there had been during the entire previous year.

One came from luxury-apartment-community builder Alliance Residential Co., which said last week that it plans to build a 270-unit apartment community at the 26th Street and Camelback Road location that once was home to the Hard Rock Cafe, and also where real-estate mogul and TV personality Donald Trump had planned back in 2004 to build a $200 million resort.

Another came from data-center operator Digital Realty Trust Inc., which announced Monday that it would add 226,000 square feet to its existing data center at 2121 S. Price Road in Chandler.

Still, the Phoenix area isn't likely to see any big announcements about new office construction for quite some time, said Bryon Carney, president and managing partner of Cassidy Turley BRE Commercial in Phoenix.

More than one out of every four square feet of rentable office space was vacant as of Dec. 31, he said, which means a lot of excess supply that likely would take years to fill.

Still, all of the commercial-real-estate deal makers said 2011 was going to see a sharp rise in sale transactions, nearly all of them driven by sellers' financial troubles.

Henig said about 95 percent of the commercial-real-estate sales in 2010 were short-sale- or foreclosure-driven, he said, a trend that's expected to continue for at least two more years.

Achen said lenders and "special servicers," hired to mitigate securitized commercial-real-estate loan losses on behalf of the investors, have begun to step up their foreclosure activities, a sign that they believe the properties slated for foreclosure are once again marketable.

"I do think special servicers are feeling confident enough in the market to go ahead and foreclose," he said.

Scottsdale, southeast Valley gained the most office tenants in 2010

Office properties in Scottsdale and the southeast Valley added a net 782,000 square feet of rented office space, while north Phoenix and the Camelback/Piestewa Peak area lost about 774,000 square feet due to tenants vacating.

Regional submarketRentable office space (sq. ft.)Office vacancy rateNet change in rented office space (sq. ft.)Office under construction (sq. ft.)Average 1-year lease rate (per sq. ft.)
West Phoenix2.7 million39.8%19,5420$23.05
North Phoenix8.4 million28.1%(-251,931)0$19.08
Desert Ridge/Paradise Valley1.9 million31.8%23,5120$23.77
Camelback/Piestewa Peak10.1 million28.6%(-212,141)0$23.86
Central Business District16.4 million20.7%(-66,850)0$21.68
East Phoenix8.7 million22%(-60,143)0$19.92
Scottsdale17.4 million27.4%437,9700$22.40
Southeast Valley10.5 million28.7%343,7110$21.16
Metro Phoenix76.2 million26.2%233,6700$21.77

Source: CB Richard Ellis


MORE ON THIS TOPIC

Industrial-property sector improves; office and retail vacancies worsen

The vacancy rate for industrial and warehouse properties in the Phoenix area decreased in 2010. Vacancy rates for office and retail space were up slightly.

Property typeVacancy rate 2010Vacancy rate 2009
Office26.2%25.9%
Retail12.2%11.1%
Industrial14.7%16.1%

Source: CB Richard Ellis

by J. Craig Anderson
The Arizona Republic Jan. 23, 2011 12:00 AM

Commercial-real-estate market registers positive changes

The Phoenix-area commercial-real-estate market passed a significant milestone in the fourth quarter, but you won't find evidence of it by looking at statistics.

That's because the positive changes were psychological, rather than economic, property investors and brokers said.

About three years after the area's commercial-real-estate market followed housing down the drain, a large number of struggling property owners who had been holding out for a miracle recovery finally began to accept the truth, investor Steven Jaffe and others said.

At the same time, a number of real-estate investment firms that had been hanging onto cash in anticipation of a desperation-fueled commercial-property giveaway finally realized it wasn't going to happen.

"The panic was gone, and the blind optimism that everything was going to turn around was gone," said Jaffe, executive vice president and general counsel for BH Properties LLC, a Los Angeles-based real-estate investment firm.

BH Properties recently acquired the 320-unit Fiesta Park apartment complex, 1033 S. Longmore, in Mesa, for $5.5 million.

It was the company's first purchase in the Phoenix in nearly three years, he said.

"Our last acquisition was in April 2008 - that's when we put the brakes on," he said.

Jaffe said the company is now actively seeking more Phoenix-area apartment buildings to buy and that it also would consider picking up some retail and industrial properties for the right price.

While sales of office, industrial and retail properties remained slow in 2010, the number of interested buyers looking for deals increased dramatically, according to area brokers and investors.

They also reported an explosion of leasing activity as businesses made a mad rush to lock in long-term lease rates at market-bottom prices.

"I'm about ready to call the bottom in the office market," said Jim Achen Jr., senior vice president at commercial-real-estate firm Transwestern in Phoenix.

Achen and fellow Transwestern broker William Zurek have closed on two huge lease deals within the past month, one for 95,000 square feet at ASU Research Park, in Tempe, to DuPont Air Products NanoMaterials LLC and the other for 135,114 square feet at 2512 W. Dunlap Ave., in Phoenix, to IT-services firm Cognizant.

In all, Phoenix-area businesses in 2010 signed new leases on a net 5.9 million square feet of office space, said Craig Henig, senior managing director of commercial-real-estate firm CB Richard Ellis in Phoenix.

All that movement rivals the amount of activity during the local real-estate market's peak years of 2005 and 2006, Henig said, but it didn't cause a significant gain in leased space overall.

The total pickup of about 234,000 square feet made 2010 a turning point after two years of net decreases, he said, but it also shows that the vast majority of activity came from local moves that did not involve any expansion.

Still, there were more announcements about new commercial construction projects during the past month than there had been during the entire previous year.

One came from luxury-apartment-community builder Alliance Residential Co., which said last week that it plans to build a 270-unit apartment community at the 26th Street and Camelback Road location that once was home to the Hard Rock Cafe, and also where real-estate mogul and TV personality Donald Trump had planned back in 2004 to build a $200 million resort.

Another came from data-center operator Digital Realty Trust Inc., which announced Monday that it would add 226,000 square feet to its existing data center at 2121 S. Price Road in Chandler.

Still, the Phoenix area isn't likely to see any big announcements about new office construction for quite some time, said Bryon Carney, president and managing partner of Cassidy Turley BRE Commercial in Phoenix.

More than one out of every four square feet of rentable office space was vacant as of Dec. 31, he said, which means a lot of excess supply that likely would take years to fill.

Still, all of the commercial-real-estate deal makers said 2011 was going to see a sharp rise in sale transactions, nearly all of them driven by sellers' financial troubles.

Henig said about 95 percent of the commercial-real-estate sales in 2010 were short-sale- or foreclosure-driven, he said, a trend that's expected to continue for at least two more years.

Achen said lenders and "special servicers," hired to mitigate securitized commercial-real-estate loan losses on behalf of the investors, have begun to step up their foreclosure activities, a sign that they believe the properties slated for foreclosure are once again marketable.

"I do think special servicers are feeling confident enough in the market to go ahead and foreclose," he said.

Scottsdale, southeast Valley gained the most office tenants in 2010

Office properties in Scottsdale and the southeast Valley added a net 782,000 square feet of rented office space, while north Phoenix and the Camelback/Piestewa Peak area lost about 774,000 square feet due to tenants vacating.

Regional submarketRentable office space (sq. ft.)Office vacancy rateNet change in rented office space (sq. ft.)Office under construction (sq. ft.)Average 1-year lease rate (per sq. ft.)
West Phoenix2.7 million39.8%19,5420$23.05
North Phoenix8.4 million28.1%(-251,931)0$19.08
Desert Ridge/Paradise Valley1.9 million31.8%23,5120$23.77
Camelback/Piestewa Peak10.1 million28.6%(-212,141)0$23.86
Central Business District16.4 million20.7%(-66,850)0$21.68
East Phoenix8.7 million22%(-60,143)0$19.92
Scottsdale17.4 million27.4%437,9700$22.40
Southeast Valley10.5 million28.7%343,7110$21.16
Metro Phoenix76.2 million26.2%233,6700$21.77

Source: CB Richard Ellis


MORE ON THIS TOPIC

Industrial-property sector improves; office and retail vacancies worsen

The vacancy rate for industrial and warehouse properties in the Phoenix area decreased in 2010. Vacancy rates for office and retail space were up slightly.

Property typeVacancy rate 2010Vacancy rate 2009
Office26.2%25.9%
Retail12.2%11.1%
Industrial14.7%16.1%

Source: CB Richard Ellis

by J. Craig Anderson
The Arizona Republic Jan. 23, 2011 12:00 AM

Commercial-real-estate market registers positive changes

The Phoenix-area commercial-real-estate market passed a significant milestone in the fourth quarter, but you won't find evidence of it by looking at statistics.

That's because the positive changes were psychological, rather than economic, property investors and brokers said.

About three years after the area's commercial-real-estate market followed housing down the drain, a large number of struggling property owners who had been holding out for a miracle recovery finally began to accept the truth, investor Steven Jaffe and others said.

At the same time, a number of real-estate investment firms that had been hanging onto cash in anticipation of a desperation-fueled commercial-property giveaway finally realized it wasn't going to happen.

"The panic was gone, and the blind optimism that everything was going to turn around was gone," said Jaffe, executive vice president and general counsel for BH Properties LLC, a Los Angeles-based real-estate investment firm.

BH Properties recently acquired the 320-unit Fiesta Park apartment complex, 1033 S. Longmore, in Mesa, for $5.5 million.

It was the company's first purchase in the Phoenix in nearly three years, he said.

"Our last acquisition was in April 2008 - that's when we put the brakes on," he said.

Jaffe said the company is now actively seeking more Phoenix-area apartment buildings to buy and that it also would consider picking up some retail and industrial properties for the right price.

While sales of office, industrial and retail properties remained slow in 2010, the number of interested buyers looking for deals increased dramatically, according to area brokers and investors.

They also reported an explosion of leasing activity as businesses made a mad rush to lock in long-term lease rates at market-bottom prices.

"I'm about ready to call the bottom in the office market," said Jim Achen Jr., senior vice president at commercial-real-estate firm Transwestern in Phoenix.

Achen and fellow Transwestern broker William Zurek have closed on two huge lease deals within the past month, one for 95,000 square feet at ASU Research Park, in Tempe, to DuPont Air Products NanoMaterials LLC and the other for 135,114 square feet at 2512 W. Dunlap Ave., in Phoenix, to IT-services firm Cognizant.

In all, Phoenix-area businesses in 2010 signed new leases on a net 5.9 million square feet of office space, said Craig Henig, senior managing director of commercial-real-estate firm CB Richard Ellis in Phoenix.

All that movement rivals the amount of activity during the local real-estate market's peak years of 2005 and 2006, Henig said, but it didn't cause a significant gain in leased space overall.

The total pickup of about 234,000 square feet made 2010 a turning point after two years of net decreases, he said, but it also shows that the vast majority of activity came from local moves that did not involve any expansion.

Still, there were more announcements about new commercial construction projects during the past month than there had been during the entire previous year.

One came from luxury-apartment-community builder Alliance Residential Co., which said last week that it plans to build a 270-unit apartment community at the 26th Street and Camelback Road location that once was home to the Hard Rock Cafe, and also where real-estate mogul and TV personality Donald Trump had planned back in 2004 to build a $200 million resort.

Another came from data-center operator Digital Realty Trust Inc., which announced Monday that it would add 226,000 square feet to its existing data center at 2121 S. Price Road in Chandler.

Still, the Phoenix area isn't likely to see any big announcements about new office construction for quite some time, said Bryon Carney, president and managing partner of Cassidy Turley BRE Commercial in Phoenix.

More than one out of every four square feet of rentable office space was vacant as of Dec. 31, he said, which means a lot of excess supply that likely would take years to fill.

Still, all of the commercial-real-estate deal makers said 2011 was going to see a sharp rise in sale transactions, nearly all of them driven by sellers' financial troubles.

Henig said about 95 percent of the commercial-real-estate sales in 2010 were short-sale- or foreclosure-driven, he said, a trend that's expected to continue for at least two more years.

Achen said lenders and "special servicers," hired to mitigate securitized commercial-real-estate loan losses on behalf of the investors, have begun to step up their foreclosure activities, a sign that they believe the properties slated for foreclosure are once again marketable.

"I do think special servicers are feeling confident enough in the market to go ahead and foreclose," he said.

Scottsdale, southeast Valley gained the most office tenants in 2010

Office properties in Scottsdale and the southeast Valley added a net 782,000 square feet of rented office space, while north Phoenix and the Camelback/Piestewa Peak area lost about 774,000 square feet due to tenants vacating.

Regional submarketRentable office space (sq. ft.)Office vacancy rateNet change in rented office space (sq. ft.)Office under construction (sq. ft.)Average 1-year lease rate (per sq. ft.)
West Phoenix2.7 million39.8%19,5420$23.05
North Phoenix8.4 million28.1%(-251,931)0$19.08
Desert Ridge/Paradise Valley1.9 million31.8%23,5120$23.77
Camelback/Piestewa Peak10.1 million28.6%(-212,141)0$23.86
Central Business District16.4 million20.7%(-66,850)0$21.68
East Phoenix8.7 million22%(-60,143)0$19.92
Scottsdale17.4 million27.4%437,9700$22.40
Southeast Valley10.5 million28.7%343,7110$21.16
Metro Phoenix76.2 million26.2%233,6700$21.77

Source: CB Richard Ellis


MORE ON THIS TOPIC

Industrial-property sector improves; office and retail vacancies worsen

The vacancy rate for industrial and warehouse properties in the Phoenix area decreased in 2010. Vacancy rates for office and retail space were up slightly.

Property typeVacancy rate 2010Vacancy rate 2009
Office26.2%25.9%
Retail12.2%11.1%
Industrial14.7%16.1%

Source: CB Richard Ellis

by J. Craig Anderson
The Arizona Republic Jan. 23, 2011 12:00 AM

Real Estate News