Monday, January 31, 2005

Overnight real estate rates sink

30-year down at 5.2%; 10-year Treasury down at 4.14%

Long-term mortgage interest rates lower Friday, and the benchmark 10-year Treasury bond yield fell to 4.14 percent.

The 30-year fixed-rate average dipped to 5.2 percent, and the 15-year fixed-rate slipped to 4.73 percent. The 1-year adjustable was down slightly at 3.67 percent.

The 30-year Treasury bond yield decreased to 4.61 percent.

Rates are current as of 7:15 p.m. Eastern Standard Time.

Mortgage rate figures are according to, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.
In other economic news, the Dow Jones Industrial Average was down 40.2 points, or 0.38 percent, finishing at 10,427.2. The Nasdaq was down 11.32 points, or 0.55 percent, closing at 2,035.83.

Stock and bond figures are current as of 7:30 p.m. Eastern Standard Time.

Saturday, January 29, 2005

Fed poised to hike key funds rate

Payroll report arrives next week

Most of a bond-market fright has passed, and long-term rates are back to the low end of a range that has held since last July: low-fee mortgages are 5.625 percent and the 10-year T-note is 4.13 percent.

Long Treasurys had traded 4.22 percent in anticipation of all the things that could go wrong next week. On Wednesday the Fed will hike another quarter-point to 2.5 percent, but hints at its future intentions in the companion statement are the scary part. Next Friday will bring news of January payrolls, each month's single most-powerful bond-market-moving datum, each defying all attempts at forecast. Then there's the Iraq election, the State of the Union and congressional reaction – in sum, enough to make sensible traders get under their desks and stay there.

Offsetting all that this morning: 4th quarter '04 GDP rose only 3.1 percent, almost a point under forecast (the United States bought foreign production, not its own). Also in the report: the best measure of inflation, the core personal consumption expenditure deflator, rose at a 1.6 percent annual rate (just about perfect); and 2004 wages gained a sorry 2.4 percent, the worst performance since Q2 '99 and hardly an inflation threat.

The linkage between politics (foreign and domestic) and economics runs through the financial markets. Nobody has a good explanation for the lock-up in that linkage in the face of so many things that cannot remain as they are. (Exception: the consistent and predictive thinking at

The Congressional Budget Office says the federal deficit will increase to $427 billion this year. John Snow, Treasury Secretary and dead-pan court jester, in a line worthy of Henny Youngman: "We are not under-taxed." Horsefeathers: tax receipts are the lowest since WWII. The bond market did not even flicker at the deficit increase; maybe saw it coming, but it is coming.


Thursday, January 27, 2005

U.S. home ownership reaches record high

Minorities gain stake in real estate

The Census Bureau released data today showing that a new national home ownership record was set in 2004. The new annual rate of 69 percent surpasses the previous record of 68.3 set in 2003. The fourth-quarter rate of 69.2 percent ties the all-time record set in the second quarter of 2004 and means there are now 74.4 million American families who own their own homes.

Minority homeowners set a new record annual rate of 51 percent in 2004, and minorities also set a new quarterly home-ownership record of 51.4 percent in the fourth quarter. There are now 15.5 million minority homeowners in the United States.

"These numbers show that housing is still leading the way in our rapidly recovering economy. President Bush is committed to building on these accomplishments so that people from every walk of life can have the opportunity to become homeowners," said Housing and Urban Development Secretary Alphonso Jackson.

In 2005, the Bush administration will propose legislation that aims to further boost home ownership by creating a Zero Downpayment Mortgage option in FHA. HUD will also ask Congress to enact a Homeownership Tax Credit that will encourage the production of homes for moderate-income families.

HUD is a federal agency that implements housing policy.

Wednesday, January 26, 2005

Man pleads guilty to real estate flipping scheme

Total loss to lenders exceeds $700,000

Pantelis Karsos, 45 of Towson, Md., on Friday pleaded guilty to charges stemming from his role in a mortgage-flipping scheme, according to a U.S. Attorney's office in the District of Maryland.
Karsos, the owner of Nations Mortgage in Towson, admitted to brokering loans for investors in a mortgage fraud scheme involving "flipped" properties in Baltimore City. He pleaded guilty to mail fraud, and will be sentenced on March 25.

Flipping occurs when a property is repeatedly bought and sold by the same party in an attempt to boost its value. However, that value often outstrips the property's appraised worth after several sales, with subsequent buyers paying an inflated price as the result.

According to facts presented to the court, Karsos incorporated a company called "Knoll Housing" and recruited investors. From approximately April 1998 to December 1999, Knoll Housing purchased properties in Baltimore City for a low price and then "flipped" the properties to an investor/borrower for an inflated price.

One of Karsos' co-conspirators, Anthony J. DiChiara , 41, of Westminster, Md., who was a licensed appraiser in Maryland, provided inflated appraisals and Karsos, as Nations Mortgage, brokered the mortgage without disclosing to the lender the inflated value of the house, or that "Knoll Housing" was owned by Karsos.

Settlements were handled by attorney Nicholas Pisotlas and Barbara Prichard and their title company, All County Title. Losses to lenders through the Knoll Housing scheme exceed $700,000.


Tuesday, January 25, 2005

Record real estate prices set in California

Median home value jumps 18% from a year ago

The median price of an existing home in California in December increased 18.1 percent from a year ago to a new high, and sales increased 1.4 percent during the same period, the California Association of Realtors reported today.

The median price of an existing, single-family detached home in California during December 2004 was $474,480, compared to the revised $401,720 median for December 2003, C.A.R. reported. The December 2004 median price increased 0.5 percent compared with a revised $471,980 median price in November.

"Home buyers concerned about future mortgage-rate increases flooded the market in December, driving the median price to an all-time high of $474,480," said C.A.R. President Jim Hamilton. "The median price increased by double-digits in every region of the state, with the High Desert, Riverside/San Bernardino, Sacramento, Santa Barbara and North Santa Barbara County regions posting increases of more than 30 percent."

Closed escrow sales of existing, single-family detached homes in California totaled 645,860 in December at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local Realtor associations statewide. Statewide home resale activity increased 1.4 percent from the 637,080 sales pace recorded in December 2003.


Monday, January 24, 2005

Economic confidence soars among wealthy

Uncertainty looms around Iraq, deficit, housing bubble

Economic confidence among affluent Americans regarding the overall state of the economy rose seven points this quarter, following a significant, 13-point decline last quarter during the 2004 election season, according to the latest quarterly McDonald Financial Group Affluent Consumer Confidence Index results, released today. This represents one of the largest quarter-to-quarter increases in two years.

The overall score for the January McDonald Financial Group Affluent Consumer Confidence Index was 55 out of 100 – a seven-point (or 15 percent) increase since the last survey in October (48). The increase in affluent consumer confidence this quarter returns the Index to a similar level as one year ago (56 in January 2004).

As a result of their positive feelings about today's economy, affluent respondents say they plan to increase their spending and investing levels over the next quarter, with 30 percent of affluent Americans saying they would put more money in the stock market over the next three months. Thirty-two percent of business leaders polled say they plan to increase hiring levels over the next three months, a 15-point increase from last quarter. However, while the current picture appears quite positive, affluent consumers still have concerns about the future of the economy due to a number of issues facing the country such as Iraq, a perceived real estate bubble and the national deficit.

David Legeay, senior vice president, McDonald Financial Group, said, "We found that confidence among the affluent severely declined during the presidential election period as debates among the candidates brought issues like jobs and the economy to the forefront. Now, with the election decided, solid GDP growth and stock market gains in the last quarter of 2004, affluent Americans again appear to be very confident about the current state of the economy. Unlike previous quarters, when confidence has not necessarily translated into higher spending and investing intentions, in this quarter larger numbers of affluent Americans say they both feel more confident and plan to take action."


Saturday, January 22, 2005

Real estate rates sink to 10-month lows

Shortage of new home loans impacts bond market

Mortgages are close to 5.5 percent today for the lowest-fee deals – as low as at any time since March '04. The ultimate driver, the 10-year-T-note, has stayed within a 4.16 percent-4.3 percent range for a month.

This stability in long-term rates – if anything tilting to the down side – is contrary to just about every forecast, whether published or talking-head. The yammering has gone like this: the Fed is marching toward 3.5 percent-4 percent or more from today's 2.25 percent; and the dollar is sure to weaken further, which will cause both inflation and a demand for higher yields by foreign investors.

All clear, but the actual market has not played by the rules: save one week after Thanksgiving, the 10-year has not traded above 4.35 percent since last July.


Monday, January 17, 2005

Home of the Future Will Include an Array of Electronic Gizmos

An increasing number of home buyers want their residences equipped with the latest technology, such as wireless computer networks, security systems, energy-efficient appliances and ventilation systems with air sensors that detect mold and other allergens. Builders are picking up on buyer demand and will make many of these items standard in their new homes by the end of the decade. Systems that let home owners control lights and alarms from handhelds or the Internet, as well as those that monitor the elderly and other ill family members, are in the works. Meanwhile, more and more buyers are asking for additional electrical outlets to handle these power-hungry devices. Though the most up-to-date technology tools can make homes more appealing than others on the market, real estate appraisers say they do not enhance a property's value unless they are on the buyer's must-have list. However, Baltimore-based appraiser Michael Cassell believes they will add value to homes as they gain popularity

Saturday, January 15, 2005

The British are coming and charging a 2% commission

Foxtons is a London UK based real estate company that started in Notting Hill in 1981. This year Foxtons successfully opened café-style offices in Sloane Square, Muswell Hill and Shoreditch and added a further seven Surrey operations to the existing portfolio.

In March 2001, Foxtons made a $20 million investment in an innovative real estate start-up in New Jersey. This company has become the fastest growing real estate company in American history. Launched in New Jersey, in March 1999 to immediate consumer interest and industry outrage. The reason for the strong reaction surrounding America's newest real estate agent was the fact that they charged an unbelievably low commission of 2%. The industry norm in America being 6%.

There was lots of talk at Real Estate Connect/NYC about new brokerage business models. In the case of tri-state reduced fee upstart Foxtons, the talk also was about new models of automobiles, that is. Besides the fact that Foxtons agents are hired as employees and receive paid benefits, a host of technology tools and even a base salary to get them started, agents get a car, which serves as a mobile billboard for Foxtons.

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Friday, January 14, 2005

Today's Owners Are 'Smart' Gadgeteers

An increasing number of home owners are spending more time at home and looking for comfort in the latest technologies and building materials. The focus is primarily on the kitchen as families spend more time there cooking, eating, working and entertaining. They are opting for stoves that both cook and refrigerate food; refrigerators equipped with video recorders, inventory monitors and Internet access; warming drawers; appliances that blend in with the cabinetry; larger or multiple dishwashers; and commercial-grade stoves with more than one oven. Rather than traditional cherry and maple cabinets with brass hardware, today's home owners prefer antique finishes, bead-board patterns and pewter or brushed nickel or bronze. Fingerprint-resistant stainless steel and low-maintenance synthetic-stone countertops are also popular. Home owners are upgrading other areas as well, putting cabinets, utility sinks and high-tech washers and dryers in their laundry rooms; installing steam showers, multi-jet shower systems and Jacuzzis with built-in televisions and DVD players in their master suites; and creating home theaters with surround sound and plasma televisions. Even hardwood floors are being spruced up with tile insets or borders comprised of several different types of wood.

Thursday, January 13, 2005

U.S. Population Nears 300 Million

Immigration and a high birth rate among Hispanics — the largest minority group in the country —helped boost the American population by 2.8 million in the 12-month period ended July 1. If that pace of growth keeps up, predicts John Haaga of the Population Reference Bureau, there could be 300 million people living in the United States within the next four years.

The nation's southern and western regions welcomed the most new residents for the study period, with Nevada adding more people than anywhere else in the country. In fact, Nevada has been the fastest-growing state for 17 years now, thanks — according to Brookings Institution demographer William Frey — to its climate, recreation and more affordable housing. Also among the fastest-growing states were Arizona, Florida, Texas, Idaho, California, Delaware and Hawaii

The Chicago Green Bungalow Project

The Chicago bungalow has been around for a century. A Green Team is working to make sure these houses last for another hundred years.

The Chicago bungalow has played a defining role in the history of many Chicago neighborhoods. Between 1900 and 1940, this middleclass home, with its solid exterior and comparatively spacious rooms, served developing communities as Chicago spread out from its industrial and commercial core. More than 80,000 bungalows were built. Often entire blocks were developed in the Chicago bungalow style, and they continue to stand—housing current residents while connecting communities to their past.

The Chicago bungalow has been defined as a blend of the Prairie School architectural style, developed in the work of Louis Sullivan and Frank Lloyd Wright, and the Arts and Crafts movement. Like Prairie School homes, the Chicago bungalow has low pitched roofs, wide eave overhangs, long horizontal lines, massive masonry supports, and earth-toned or contrasting colors.The Arts and Crafts movement promoted homes as private and individualized retreats from the hectic pace of city life. Following this principle, each bungalow has unique features that personalize the residence.As a result, one can look at a block of Chicago bungalows and quickly see both the common features and the individual differences between them.


Tuesday, January 11, 2005

Greenspan Dismisses Fears of Mortgage Bubble

Rising home prices combined with the low interest rates of the past five years have led to current speculation of a national housing bubble, causing some homeowners, lenders, and brokers to worry that the nation’s increasing home values will eventually begin to level and decline. In a speech at the America’s Community Bankers annual convention, Federal Reserve Board chairman Alan Greenspan dismissed the notion, stating that, “Even though some down payments are borrowed, it would take a large, and historically most unusual, fall in home prices to wipe out a significant part of home equity.”

Stating that many who purchased their home even a year ago have sufficient equity to withstand a price correction, Greenspan outlined his belief that it is unlikely housing prices could become severely distorted given the diversity and size of the United States. “If lenders, including community bankers, continue their prudent lending practices, household financial conditions should be all the more likely to weather future challenges,” said Greenspan.

Despite speculation that home values have grown inorganically, there has been little evidence to bring action from the industry. To the contrary, home equity borrowing has continued in the wake of the refinance boom and home equity lenders have benefited from aggressive and responsible products.

Across the nation homeowners have enjoyed the benefit of increasing home values that proved quite valuable during the refinance boom. Refinancing to take advantage of historically low interest rates, the increase in home value provided extra cash to homeowners. With interest rates beginning to climb and the refinance boom over, homeowners are still taking advantage of rising values; now, however, through flexible second mortgage options.


Illinois Fines Residential Mortgage Licensee $5,000 for Lender Pressure

In what may be a first, a state regulatory agency has fined a lending company for pressuring appraisers to come up with a specified value. The Illinois Department of Financial and Professional Regulation - Division of Banks and Real Estate, fined Choice One Mortgage, Inc., an Illinois residential mortgage licensee, $5,000 for ordering “appraisals from an Illinois licensed appraiser with minimum value necessary to complete the loan.” In addition, the Department found that “appraisal orders were cancelled, not paid for, or otherwise negatively treated when the accepted minimum value was not provided.”

It was determined that Choice One violated its original license application and renewals that state “it will not make payment to an in-house or fee appraiser for the purpose of influencing the independent judgment of the appraiser with respect to the value of any real estate covered by the home mortgage” and violated the federal Uniform Standards of Professional Appraisal Practice by “financing a residential mortgage transaction based on inaccurate property valuation.”

For more information on the violation, visit the IDFPR Web site at

Monday, January 10, 2005

Overnight real estate rates stand ground

30-year holds at 5.36%; 10-year Treasury down at 4.27%

Long-term mortgage interest rates were flat Thursday, and the benchmark 10-year Treasury bond yield slipped to 4.27 percent.

The 30-year fixed-rate average held at 5.36 percent, and the 15-year fixed-rate remained at 4.81 percent. The 1-year adjustable was down at 3.47 percent.

The 30-year Treasury bond yield held at 4.85 percent. Rates are current as of 7:15 p.m. Eastern Standard Time.

Mortgage rate figures are according to, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.

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