Home prices down for 6th straight month

[Scorpio]

Home prices down for 6th straight month



By Les Christie @CNNMoney December 27, 2011: 11:42 AM ET
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NEW YORK (CNNMoney) -- Home prices fell for the sixth straight month in October, down 1.2% compared with September and 3.4% a year ago, according to the latest S&P/Case-Shiller 20-city index.

The decline was disappointing in light of several other recent reports, which painted a more positive picture of the housing market.

In recent weeks, reports on new home sales, existing home sales and home building all recorded increases. In addtion, mortgage rates are at record lows, which should be giving homebuyers an added boost.

However, tight lending standards and a glut of foreclosures continue to weigh on the housing market, said Pat Newport, a housing market analyst for IHS Global Insight.

With so many homes for sale at distressed prices, the home price numbers come as no surprise, he said.
Home prices headed for triple dip

"The numbers are pretty bad and will get even worse over the next two years," he said.

The 20-city index has dropped every month since April. Since the housing bust began in mid-2006, homes have lost nearly 33% of their value.

Peter Morici, a professor of economics at the University of Maryland, said home prices remain weak because demand for existing homes is soft. Many potential buyers are migrating to rental markets or buying new homes that had been sitting unsold for months.

According to Morici, the current home price levels represent a correction from inflated prices reached during the bubble.

"Prices are where they belong and that's where they'll stay," he said.

Nineteen of the 20 cities posted declines in October, with Phoenix the only exception. Prices went up there 0.3% compared with September.

Midwest markets and the Atlanta metro area fared badly, with Atlanta prices down 5% in October following a 5.9% plunge in September.

http://money.cnn.com/2011/12/27/real...ntent=My+Yahoo

[REO 54]

...and then there's the other side of that coin;commercial real estate.How's that been going?

Bubble-era loans coming due...
By Sarah Mulholland

BLOOMBERG NEWS Sunday December 11, 2011 10:26 AM

NEW YORK — A $19 billion wave of five-year commercial mortgages originated at the height of the property- market bubble starts maturing in less than a month, sparking concern that delinquencies will accelerate.

About 43 percent of the $44 billion in loans packaged into bonds that come due next year were arranged in 2007 before property values tumbled 42 percent, according to Bank of America Corp. The largest deal, a $7.3 billion issue by Goldman Sachs and Royal Bank of Scotland Group, has $586 million of loans maturing in 2012, Bloomberg data show.

Owners of commercial properties could find it harder to refinance after Europe’s fiscal crisis sent relative yields on commercial-mortgage securities to the highest level since February 2010, roiled credit markets and forced a pullback in lending. Late payments, which declined to 9 percent from a record 9.1 percent in October, are likely to rise in part because of the 2007 class of maturing debt, according to Barclays Capital.

“These loans were done at the peak of the market,” said Julia Tcherkassova, a commercial-mortgage debt analyst at Barclays in New York. “They will have trouble refinancing today.”

Loans packaged and sold as bonds typically have terms of five or 10 years. Borrowers with five-year mortgages are finding it “much tougher” to repay, according to a Nov. 10 report from Wells Fargo Securities. About 39.4 percent of five-year loans packaged into bonds were able to refinance in 2011 compared with 80 percent of 10-year commercial mortgages, the report said.

The extra yield investors demand to own top-ranked commercial-mortgage bonds rather than Treasuries has risen to 267 basis points from this year’s low of 178 basis points on April 26, according to a Barclays index. While the spread has narrowed from 323 on Oct. 4, increased volatility has curbed new lending, Tcherkassova said.

http://www.dispatch.com/content/stor...oming-due.html