Saturday, February 9th, 2008 at 3:06am. 3,003 Views
While final numbers on the value changes in the national commercial real estate market during the fourth quarter are not yet in, MIT has released an important study on the subject. The Transaction-Based Index follows the values of the nation's major pension funds' Commercial Real Estate holdings.
In the third quarter of 2007, MIT reported that values declined 2%. During the fourth quarter, this trend accelerated to 5%.
The director of the MIT center that conducted the study, David Geltner, claims that “This is evidence that the commercial property market continued to fall, and at an accelerated rate, through the last quarter of 2007, no doubt due to the effects of the credit crunch.” A survey by the Federal Reserve, however, recently found that…
Thursday, February 7th, 2008 at 11:47pm. 3,193 Views
The Federal Reserve recently completed its “2008 Senior Loan Officer Opinion Survey on Bank Lending Practices.” It is a much-awaited quarterly survey of the opinion of banking executives that specialize in lending for the real estate market.
While the results were expected to suggest a tightening of loan requirements throughout the industry, the results for commercial real estate were particularly stark. “About 80 percent of domestic banks,” according to the survey, “reported tightening their lending standards on commercial real estate loans over the past three months.”
Roughly about forty percent of foreign banks and fifty-five percent of domestic banks reported requiring higher debt service coverage ratios and lower loan to value ratios than in…
Thursday, January 31st, 2008 at 12:03pm. 2,450 Views
In 2007 there were a total of 13,162 homes sold in Austin Texas at a 9% average increase in value from the previous year. While the number of homes sold was down 12% in 2007 compared to 2006 in Austin Texas, homes sold for an average of $14 per square foot more in 2007 than in 2006. The net result was a 3.6% overall decrease in sales revenue for Austin homeowners in 2007, which is a relatively modest decrease.
However, as of 11:00am on January 31, 2008 the number of homes sold in January 2008 compared to January 2007 has decreased by 37%. Although the median price of homes sold has increased in 2008, it is a modest increase of approximately 6%. Additionally, 50% more homes were withdrawn from the market in January 2008 compared to the same time in…
Wednesday, January 30th, 2008 at 9:34am. 1,789 Views
Signs of economic turmoil have become too obvious to ignore. 2007 saw the greatest one-year drop in the value of the national real estate market since the great depression, according to the Commerce Department's new numbers.
There is certainly no consensus among economists as to whether we are in a recession – the International Monetary Fund, for instance, prediected recently that it is unlikely the US will slip into a recession. Actions, however speak far louder than words, especially when it comes to the words of bureaucrats and politicians. And the actions of those in government recently suggest that we are indeed entering a recession. Last week, for instance, the Federal Reserve cut interests rates by three-quarters of a point to stave off a…
Tuesday, January 29th, 2008 at 4:44pm. 5,470 Views
Testifying before Congress about a year ago, the President of the Center for Responsible Lending predicted that 2.4 million homes will eventually face foreclosure from the subprime crisis. At the time, this estimate was considered by some economists to be an excessively large figure created by a consumer rights organization with an agenda. Today, Congress' Joint Economic Committee estimates that, through August of this year, 1.7 million homes were lost. Looking only as far as August of 2009, it estimates that up to another 2 million homes will be lost. So, if anything, the Center for Responsible Lending was overly conservative.
Other analysts predict similar activity, at least insofar as 2008: The consensus is that roughly a quarter of a million…
Thursday, January 3rd, 2008 at 8:11pm. 2,115 Views
The headline of the business page today shows Austin new home starts at their lowest since 2004 with the market down 20% in the 4th quarter. For some this might bring fear and dismay at how one of the fastest growing cities in the country could be showing continued weakness in the real estate market. To those looking forward to better days to come, this is actually good news! It sounds elementary, but the truth is that the less new home inventory on the market the better our resales will hold their value over the long term. It looks like painful lessons from the past and the lack of tollerance from shareholders has motivated homebuilders to pull back as far as necessary to keep profitable (or at least we hope so). Keeping inventory at a managable…
Tuesday, January 1st, 2008 at 8:54pm. 1,992 Views
Wednesday, December 19th, 2007 at 1:30pm. 1,921 Views
Wednesday, December 19th, 2007 at 1:14pm. 1,712 Views
Tuesday, December 18th, 2007 at 3:59pm. 2,042 Views
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