January 27, 2010

New Home Sales Stuck Near Record Low Levels

Author: admin - Categories: Department of Housing and Urban Development, New Residential Home Sales, Real Estate News

The Census Bureau and the Department of Housing and Urban Development today released New Residential Home Sales survey data for December 2009.  The survey is primarily based on a sample of houses selected from building permits. Since a “sale” is defined as a deposit taken or sales agreement signed, this can occur prior to a permit being issued.  Some insiders believe that loan modification plans may be hindering home sales, because lenders are extending loan workouts with distressed homeowners.

Changes in sales price data reflect changes in the distribution of houses by region, size, etc., as well as changes in the prices of houses with identical characteristics. It takes four months to establish a trend of new home purchases.

Nationwide Mortgage Loans announces discounted mortgage refinance programs. FHA Allows Home Buyers Tax Credit.  Read more on FHA Loans.

Sales of new single family homes fell 11.3% to an annual pace of 355,000 units. This was much lower than consensus estimates of 440,000 annual sales and 45,000 less than the October print of 400,000, which was revised for the worse from 430,000. This was the slowest pace of new home sales in 7 months and the worst month over month decline since January 2009.

January 8, 2010

California Hotel Foreclosures Rise

Author: admin - Categories: California Hotel Foreclosures

Hotel foreclosures in California more than quadrupled last year as business travelers and vacationers cut spending and commercial real estate values plunged, forcing owners into default, according to a survey released today.  There were 62 foreclosures on hotels in the state last year, compared with 15 in 2008, Irvine, California-based Atlas Hospitality Group said in a statement. Properties in default jumped almost six-fold to 307, said Atlas, which specializes in selling hotels. The survey only covered California.

Lodging owners are struggling to make debt payments after adding rooms and properties from 2004 to 2007, when financing was easy to come by because banks bundled the loans into mortgage-backed securities and sold them to investors.  “In California and nationwide, a lot of owners are dipping into their own pockets to fund the negative cash flow, and they are running out of money,” Alan Reay, president of Atlas Hospitality, said in a telephone interview. “Hotels are being foreclosed on and reselling at very low, low prices. A lot of people question if they should keep paying. As bad as the numbers look right now, it’s going to get a lot worse.”  About 1,200 loans totaling $28.2 billion and backed by 1,800 U.S. hotels were included on a performance watch-list by Realpoint LLC as of the end of December. The list includes loans in default or at risk of default, according to the Horsham, Pennsylvania-based credit-rating company.

The largest hotel to be foreclosed on was the 469-room Marriott in downtown Los Angeles, Atlas said. The Marriott International Inc. hotel may be sold to an unidentified Chinese investor for $60 million in cash, industry newsletter Real Estate Alert said last month.  LA Hotel Venture LLC, which bought the property for $115 million in March 2007, filed for bankruptcy in April to stave off foreclosure. The petition listed as much as $100 million in assets and as much as $500 million in debt.

About 81 percent of troubled California hotel loans originated between 2006 and 2007, Atlas said.  Occupancy in the top 25 U.S. travel markets fell to 61 percent through November from 67 percent a year earlier, according to Smith Travel Research in Hendersonville, Tennessee.  Average daily rates slumped 12 percent during that period compared to the prior year and will likely drop 3.4 percent in the U.S. in 2010, according to Smith Travel.  “We’re not going to hit bottom until we stop seeing revenue declines,” Reay said. “The latest November numbers still show double-digit declines in many of the top 25 markets. That’s a problem. We were looking at November as the bottoming- out month. Unfortunately, this was a bad surprise.”  Riverside, California, outside of Los Angeles, had 10 hotels in foreclosure last year. San Bernardino was home to seven and Los Angeles had six, Atlas said. Los Angeles had 33 hotels in default and San Bernardino had 30, Atlas said.

California Bank Testing Commercial Real Estate

Author: admin - Categories: California Financing, California Real Estate News, California Real Estate Transactions, Commercial Real Estate, Southern California Real Estate

Southern California’s Inland Empire, a suburban sprawl to the east of Los Angeles, has been among the hardest hit by the real estate crisis.   All the while, the largest bank based in the region, CVB Financial Corp., has survived even as rivals perished. But CVB’s exposure to commercial real estate in the area could still cause problems for the lender. California loan modifications and California Short Sales continue to play a dominant role in state real estate transactions, but now they are affecting the commercial market place.

During a December presentation for CVB’s investors, Chief Executive Christopher Myers described a bleak commercial property market in Ontario, a city in the heart of the Inland Empire and the site of CVB’s headquarters.  “You go up our street — there are 10 buildings of 50,000 to 150,000 square feet with 75% vacancy,” Myers said of the town’s main artery, Haven Avenue, according to a transcript of the presentation. “We have zero loans against those 10 buildings.”   However, an office building at 800 N. Haven Ave. in Ontario was part of collateral for a $16.575 million revolving line of credit that Citizens Business Bank, the banking unit of CVB, extended in March 2008, according to the deed of trust. In August of that year, the property partly secured a $16 million promissory note issued by the bank, another deed of trust shows.  > Read the entire California Real Estate Article.