Overseas investors see potential of U.S. property markets

 Skidding home prices in the United States have also drawn foreign investors looking for more bargains and taking advantage of the favourable exchange rate.

 Property industry professionals surveyed recently by Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC) showed their preference for the U.S. property markets.

 

The ULI and PwC surveyed and interviewed 360 internationally renowned real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants from across the globe.

 

The ULI and PwC final report said factoring the gloomy scenario in Europe and the inscrutable Asian markets, the United States presents the best spot for offshore capital amidst some anaemic prospects.

 

Prime and familiar U.S. gateway cities located along coasts are top considerations.

 

Aside from central business districts in Washington, D.C., New York City, and San Francisco, properties in Southern California and Miami have drawn the attention of Latin American investors.

 

The overseas investors are led by Asian sovereign funds led by China and Singapore. New investments from Israel, was noted and so are the interest from the conservative Islamic funds from the Middle East.

 

This trend was also affirmed by a recent report by the Move Channel.com and Global Edge showing searches for United States properties and narrowly edging France and Spain.

 

Global Property Guide (GPG) Research has shown the expanding rental markets potential in the U.S., with their moderate rental yields that are promising.

 

“Property in the US is now relatively inexpensive, from an international perspective. In addition, the US is a country with a growing population, due to its tradition of accepting a large number of immigrants. Low yields + low pricing in comparative terms + a growing population look an attractive combination,” according to Global Property Guide.

 

Potential property investments aside from rental apartments and condominiums include rentals and acquisitions of warehouses taking the cue from the electronic shopping boom.

 

Global trade will power export activity around the U.S. primary seaboard ports, where traditional big-box warehouse distribution assets rebound after experiencing uncomfortably high vacancies.

 

East Coast cities can position themselves to capture Pacific container-ship traffic slated to come through a widened Panama Canal in 2014.

 

Some winners will turn into new industrial hubs, but first need to dredge harbor channels to handle deep-hulled vessels. Miami, Charleston, Savannah, and Norfolk look like prime contenders, and New York/New Jersey will not be left out. Houston should pick up business along the Gulf Coast. (Global Property Guide)

Industry Approaches 1M Loan Modifications This Year

About 885,000 borrowers have received permanent loan modifications this year, according to October data from HOPE NOW. The voluntary alliance of mortgage industry participants announced last month that the industry had completed 5 million modifications since 2007.

“With almost a million loan mods completed this year, it is clear that the industry and its partners continue to invest a tremendous amount of resources into assisting homeowners across the country,” said HOPE NOW executive director Faith Schwartz Wednesday with the release of the October data.
The industry completed almost 80,000 modifications in October after completing a little more than 90,000 in September.
Of the 80,000 modifications completed in October, more than 53,000 were proprietary modifications, while 26,102 were completed through HAMP.
Of the year-to-date modification total of 885,000, about 582,000 are proprietary, while 303,426 were completed through HAMP.

About 79 percent of all proprietary loan modifications completed in October included principal and interest payment reductions. On about 74 percent of the loans, the reductions in principal and interest were at least 10 percent.
Additionally, about 86 percent of proprietary modifications completed in October were fixed-rate modifications.
HOPE NOW also reported that foreclosure starts rose during the month of October, while foreclosure sales fell.
Foreclosure starts increased 7 percent, rising from 196,000 in September to 209,000 in October.
Foreclosure sales fell 5 percent over the month from 68,000 to 64,000.
Delinquencies of 60 days or more fell along with foreclosure sales, dropping 6 percent from 2.81 million in September to 2.65 million in October.
While Schwartz credited the industry for its efforts in accomplishing more than 5 million loan modifications since 2007 and its evolving efforts in borrower outreach, she stated, “The work is not done.”
However, HOPE NOW continues to conduct borrower outreach events throughout the nation to assist struggling homeowners.
“HOPE NOW recently wrapped up its 2011 homeowner outreach schedule – including 15 separate events with close to 12,000 attendees. Events are being planned for the first quarter of 2012 in Charlotte, Miami and Tampa, plus several cities to be determined,” Schwartz said. (dsnews.com)

Mortgage Rates Hold Near Record Lows

Freddie Mac released the results of its weekly mortgage rate survey Thursday, showing average fixed mortgage rates largely unchanged and near their record lows, helping to keep housing affordability high for those borrowers who are in the market.

The 30-year fixed rate dipped to 3.99 percent (0.7 point) for the week ending December 8, down from last week when it averaged 4.00 percent. Last year at this time, the 30-year rate was 4.61 percent.
At 3.27 percent (0.8 point), the 15-year fixed rate this week averaged just slightly above its all-time low of 3.26 percent on October 6, 2011. The 15-year rate slipped from 3.30 percent last week. A year ago at this time, it was averaging 3.96 percent.
Adjustable-rate mortgages (ARMs) rose slightly this week, but both products included in Freddie’s study are coming off of all-time historic lows recorded last week.
The 5-year ARM is now averaging 2.93 percent (0.5 point), up from 2.90 percent last week. This time last year, the 5-year ARM was at 3.60 percent.
One-year ARMs averaged 2.80 percent (0.6 point) this week. The average was 2.78 percent last week and 3.27 percent at the same time last year. (By Carrie Bay - dsnews.com)

GSEs Total 2 Million Foreclosure Prevention Actions

Servicers for Fannie Mae and Freddie Mac have completed almost 2 million foreclosure prevention actions for the two companies since they went into conservatorship in 2008, according to the Federal Housing Finance Agency’s (FHFA) third-quarter report.

More than half of these actions have been loan modifications, and of the remainder, about 676,500 have kept homeowners in their homes. About 269,700 were short sales or deeds in lieu.

The number of loans modified by the GSEs in the third quarter was 3 percent higher than that of the second quarter. The GSEs modified 83,600 loans during the third quarter.
About two-thirds of loan modifications completed during the third quarter included repayment reductions of more than 20 percent.

Fannie and Freddie also completed 48,900 repayment plans and 7,000 forbearance plans in the third quarter.
The number of borrowers in HAMP trial periods declined from 51,000 at the end of the second quarter to 42,300 at the end of the third quarter.
The FHFA says this decline occurred as borrowers completed their trial modifications and received permanent modifications.
About 22,600 trial modifications graduated into permanent modifications in the third quarter.
The total number of loans modified under HAMP since its inception falls just short of 400,000 at 380,300.
The GSEs also increased the number of loans refinanced under the Home Affordable Refinance Program (HARP) in the third quarter.
HARP refinancings increased 11 percent over the quarter, bringing the total to 928,600.
Additionally, over the third quarter, the GSEs saw serious delinquency rates decline from 3.85 percent to 3.81 percent.
However, the percentage of homeowners between 30 and 59 days delinquent increased from 2.04 percent in the second quarter to 2.07 percent in the third quarter.
REO inventory decreased from 196,000 to 182,000 over the quarter. (DSNews.com)

Growth In Commercial Real Estate Markets Expected in 2012

While leasing, construction and vacancy rates appear more or less flat, leading economic indicators are looking up and expected to bring the commercial markets along in 2012. That’s the upshot of NAR’s latest Commercial Real Estate Outlook along with SIOR’s Commercial Real Estate Index.
NAR Chief Economist Lawrence Yun:  “Vacancy rates are expected to trend lower and rents should rise modestly next year. In the multifamily market, which already has the tightest vacancy rates in any commercial sector, apartment rents will be rising at faster rates in most of the country next year. If new multifamily construction doesn’t ramp up, rent growth could potentially approach 7 percent over the next two years.”
Looking at commercial vacancy rates from the fourth quarter of this year to the fourth quarter of 2012, NAR forecasts vacancies to decline 0.6 percentage point in the office sector, 0.4 point in industrial real estate, 0.8 point in the retail sector and 0.7 percentage point in the multifamily rental market.
The Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, an attitudinal survey of 231 local market experts,¹ shows the broad industrial and office markets were relatively flat in the third quarter, in step with macroeconomic trends. The national economy continues to affect the sectors, with 92 percent of respondents reporting the economy is having a negative impact on their local market.
Even so, the SIOR index, measuring the impact of 10 variables, rose 0.6 percentage point to 55.5 in the third quarter, following a decline of 2.6 percentage points in the second quarter. In a split from the recent past, the industrial sector advanced while the office sector declined.
The next commercial real estate forecast and quarterly market report will be released on February 24. (Commercial Source)