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Real Estate News - May 2008
The following news stories are those which are most important for understanding the house price crash and the impact on house prices going forward...
FT: House prices fall at record pace.
Mortgage Strategy: Land Registry figures show property prices down 0.2%.
Times: Shoppers feel pinch as grocery bills rise - and there’s worse to come.
FT: Shares of US regional banks slumped Wednesday after KeyCorp, the third-largest bank in Ohio, doubled its forecast for loan losses and prompted concerns that small US banks may have underestimated the cost of the housing slump.
FT: Lenders increase cost of fixed-rate mortgages.
Shaftesbury, the West End property specialist, suffered its first pre-tax loss for 16 years as a result of the sharp fall in property values in the UK.
FT: A £2.9bn shopping centre investment fund managed by Capital & Regional is to raise £300m through a deeply discounted rights issue to prevent a breach of a key debt covenant.
FT: Spanish housing dips further.
Mortgage Strategy: Nationwide's UK house price index for May reveals prices fell by 2.5%, the largest monthly drop since the index was introduced in 1995.
Marketwatch: Fixed-rate mortgages jump.
FT: Vietnam’s inflation rate surges above 25%.
FT: City of London braced for falling property values.
Times: Mortgage approvals down 40 per cent on tighter lending.
Marketwatch: Sell your home in a difficult market.
Reuters: Ford to cut up to 12 percent of salaried jobs.
FT: More commercial property is being withdrawn from the investment market than being sold owing to a stand-off between buyers and sellers.
FT: Sharp rise in overdue mortgage payments.
FT: Recent borrowers hit problems earlier.
FT: Inflation and the lessons of the 1970s.
Times: UBS seeks SwFr16 billion amid fears of further losses.
Marketwatch: Home prices fall 14.4% in past year, Case-Shiller says.
Marketwatch: U.S. May consumer confidence at 16-year low.
Marketwatch: Tulips and tract homes - Four lessons learned from the biggest mania of all.
Marketwatch: Sales of new homes rose during April for the first time in six months, but economists say it isn't cause for celebration that the nation's housing market is turning around.
Marketwatch: Home prices in 20 major U.S. metropolitan areas have dropped a record 14.4% in the past year, Standard & Poor's said Tuesday.
Reuters: Prices of U.S. single-family homes plunged a record 14.4 percent in March from a year earlier, while consumer confidence slumped to its lowest in 16 years in May as gasoline prices surged.
Marketwatch: Sidestepping inflation - Three ideas for beating rising prices by shopping smarter.
Times: Nervous buyers hold back as house prices fall again.
New York Times: The Swiss banking giant, UBS, said on Thursday that it would raise more than $15 billion by issuing sharply discounted shares as it tried to restore capital depleted by losses on mortgage securities.
FT: Canada looks to rein in bank liquidity.
FT: Commercial property debt takes a new turn.
FT: US warning on ‘jumbo’ mortgage freeze.
FT: Banks get jitters on property lending.
Telegraph: Defaults on commercial property loans surge 400pc.
Marketwatch: Unsold houses rise to 23-year high in April. Sales decline 1% even as prices plunge 8% year-on-year.
Reuters: Home sales slip, stock of unsold homes rises.
Marketwatch: Bank of England voted 8-1 for steady rates in May: minutes.
Times: Federal Reserve signals no more rate cuts for 2008.
Mortgage Strategy: Nationwide's pre-tax profit rises by £112.5m.
Marketwatch: In the first quarter U.S. home prices fell a seasonally adjusted 1.7% -- the largest quarterly price decline on record, the Office of Federal Housing Enterprise Oversight reported Thursday.
Reuters: Home prices drop, jobless rolls at 4-year high.
FT: CPDOs expose ratings flaw at Moody’s.
FT: Moody’s error gave top ratings to debt products.
FT: Commercial property prices in the US in February saw their sharpest decline since records began nearly 15 years ago as sources of finance for deals has dried up, according to data from Standard & Poor’s out yesterday.
FT: Shortage fears push oil futures near $140.
FT: AIG aims to raise $20bn in new capital.
FT: HBOS returns to mortgage-backed bond market.
Telegraph: Taxpayers' money tied up in Northern Rock is more at risk than first thought, the nationalised lender's chairman, Ron Sandler, has conceded, as the credit crisis threatens to undermine its restructuring.
Marketwatch: Crude breaks the $130 a barrel level.
Property Week: Allsop saw its success rates fall to their lowest level since 1998 yesterday at their commercial property auction.
Marketwatch: Crude futures climb above $132 to fresh record levels.
FT: Citigroup curbs ‘near prime’ lending in UK.
FT: B&B slumps as sell-off bites.
FT: Bank of Japan leaves interest rates unchanged at 0.5%.
Marketwatch: U.S. producer prices outside of food, energy rise most in 17 years.
Marketwatch: American International Group will end up raising about $20 billion by selling a variety of securities, much more than the insurer originally planned.
Wall Street Journal: Where Home Prices Are Holding Up.
Reuters: Lehman cutting about 1,300 jobs globally.
FT: Banks make customers pay for lost profit.
FT: This week, both Land Securities and HSBC announced asset writedowns to the tune of £1.3bn.
FT: The downturn in the housing market is close to claiming another victim after Humberts, one of the oldest estate agent companies in the UK, was forced to suspend its shares on Friday pending clarification of its “financial condition”.
FT: Ailing UK economy hits sterling.
Wall Street Journal: Fannie, Freddie Called Weak in Capital Base.
Mortgage Strategy: The number of total mortgage deals available has been slashed by more than half in the last six months, claims Mortgage Monitor.
New York Times: How to Stop Inflation From Devouring a Portfolio.
Reuters: No end in sight to market woes say Trichet, Buffett.
Times: Barclays takes £1.7 billion hit and refuses to rule out capital raising.
Times: Prospects of cheaper loans hit as inflation forecast sends Libor soaring.
FT: The UK’s biggest banks are preparing to swap £80bn-£90bn of mortgage-backed assets for Treasury bills with the Bank of England.
FT: Gordon Brown has agreed to let the cash-strapped Ministry of Defence free up hundreds of millions of pounds by breaking one of its main accounting rules so it can finally give the go-ahead to a £4bn contract for two aircraft carriers.
FT: ECB concern over liquidity scheme.
FT: Barclays defends core capital ratio.
FT: Crédit Agricole ready to bow to ‘capital as king’.
Mortgage Solutions: UK housing starts down by almost a quarter
Property Week: Kier: Credit crunch hits homes and property business.
FT: No interest rate cut for two years, Bank warns.
Marketwatch: U.S. home builders broke ground on 8.2% more homes in April, led by a 36% increase in multi-family units, the Commerce Department estimated Friday.
Wall Street Journal: When the Bank Freezes Your Line of Credit.
Marketwatch: US Consumer sentiment falls in May, lowest since 1980.
Times: The UK's biggest building society has cut rates and fees on five-year loans to encourage borrowers to take a longer-term view.
Times: Brown announces rescue plan for first-time buyers. Anyone earning less than £60,000 will now be eligible for the Government's shared ownership schemes.
Times: Bank chief Mervyn King raises spectre of British recession.
Marketwatch: Land Securities NAV falls 10% in 'demanding' market.
Reuters: Home builder sentiment nears record low in May.
FT: Fannie and Freddie capital alert.
FT: Fed ready to boost size of credit auctions.
FT: B&B plans £300m rights issue.
FT: Familiar culprits drive surprise jump in bills.
FT: Economic data take toll on the pound.
FT: Redrow’s sales fall by a half.
Marketwatch: U.K. April RICS house price balance at record low.
FT: JPMorgan faces $9bn charge for Bear clean-up.
Times: Hopes of more interest rate cuts in doubt as inflation surges to 3%.
Marketwatch: U.S. food prices rise 0.9% - their largest monthly increase in 18 years.
FT:Northern Rock’s borrowers’ arrears double
Times: Investor says HSBC undervalued loss by $30bn.
Times: Higher prices hit hopes of UK interest rate cut.
Marketwatch: Credit Agricole said Tuesday that it expects to raise around 5.9 billion euros ($9.2 billion) to strengthen its balance sheet after further subprime losses, as rival Societe Generale revealed a 23% drop in profit due to the credit crunch.
Mortgage Strategy: Lending for UK house purchases plummets.
Reuters: MBIA posts huge loss on credit derivatives.
Marketwatch: HSBC reveals bad debt charges of $3.2 billion; investment bank write-downs hit $2.6 billion.
New York Times: Mortgage Holders Find It Hard to Walk Away From Their Homes.
Marketwatch: AIG shares fall on insurer's huge loss.
FT: ECB holds rates at 4%.
Marketwatch: Does your mortgage exceed your home's value? Here's some advice.
Marketwatch: More Homes Hit Market in April.
Reuters: Citigroup aims to shed $400 billion of assets.
Reuters: AIG sees no signs of mortgage asset market rebound yet - shares fall.
Reuters: Oil hits record $126.
Reuters: Countrywide falls on worry over B of A merger.
New York Times: Bad Investments and a $7.8 Billion Loss at A.I.G.
Mortgage Strategy: UK repossessions up 17% in Q1.FT: IMF warns on global inflation.
FT: Citigroup considers $400bn asset sale.
FT: Bankruptcies and defaults gather pace.
Times: Repossession orders at record high as homeowners struggle.
FT: Labour is in emergency talks to renegotiate more than £10m of loans from wealthy businessmen to prevent itself running out of money.
FT: Investors pull £800m from property funds.
FT: The pain from the subprime crisis has largely worked its way through the investment banking world but might only be just beginning for retail lenders, John Thain, chief executive of Merrill Lynch, said on Wednesday.
FT: Slowdown bites for estate agents.
FT: Europe and US unite on stronger dollar.
Mortgage Strategy: BoE holds base rate at 5%.
Marketwatch: AIG reports $7.8 bln net loss; to raise $12.5 bln in capital.
New York Times: A Fear of Big Demand for Corporate Loans.
Times: Sales of multi-million pound London homes have fallen by 40 per cent over the past three months and the drought in housing activity looks set to continue.
Times: UK Food prices rose almost 5% last month.
FT: Crude oil prices could surge to $200 a barrel in the next two years, according to the Goldman Sachs analyst who three years ago correctly predicted a price “super-spike” above $100 a barrel.
FT: Legg Mason hit by first loss in 25 years.
FT: UBS said on Tuesday it would cut 2,600 more jobs from its investment bank in a further reaction to losses caused by the US subprime crisis.
FT: Lenders reduce buy-to-let exposure.
FT: Bovis warns of slumping home sales.
Property Week: Demand for City of London offices and London residential fell off sharply in the first quarter of 2008, Savills said today.
Marketwatch: In a sign that the U.S. housing market may have further to weaken, an index of sales contracts on previously owned homes fell 1.0% in March from the prior month, the National Association of Realtors reported Wednesday.
Marketwatch: Hovnanian Enterprises Inc.'s net contracts for new homes in the second quarter dropped 29%.
FT: BlackRock, the US asset manager, will pay UBS $15bn (£7.6bn) for a portfolio of subprime mortgage debt in a deal that the Swiss bank plans to announce on Tuesday with its first-quarter results.
Wall Street Journal: Casino operator Tropicana Entertainment LLC sought Chapter 11 protection late Monday in the largest corporate filing of the year, after it missed an interest payment Friday on a $1.32 billion loan with lender Credit Suisse Group.
Wall Street Journal: UBS plans to cut 5,500 jobs by the middle of next year, an effort meant to restructure its troubled investment bank as the Swiss giant recorded a net loss of nearly $11 billion.
New York Times: Fannie Mae, the largest provider of U.S. home financing, Tuesday reported its third straight quarterly loss as the U.S. housing crisis took another turn for the worse during the first quarter of 2008. Fannie Mae posted a net loss of $2.51 billion for the first quarter. That comes on the heels of a record $3.6 billion loss in the fourth quarter. It will raise $6 billion in new capital through public securities offerings.
Marketwatch: The Federal Reserve, along with other central banks, said Friday that it was increasing the funding it is providing to banks and announced that, for the first time, it was willing to accept bonds backed by auto loans and credit cards.
FT: Nationwide highlights ‘traditional values’.
New York Times: Analysts Say BofA May Lower Countrywide Deal Price.
New York Times: Mortgage-Free, but Not Free From the Temptation to Borrow.
Marketwatch: Crude surges to above $120 for first time.
Reuters: Fed says banks still tightening loan standards.
Mortgage Strategy: UK House prices fell by 1.3% on average in April, says the latest Halifax House Price Index.
FT: City job losses hit office rents.
FT: The cautious approach of banks to lending to property companies had contributed to a further weakening in UK property values so far this year, Hammerson said in a trading statement on Thursday ahead of its annual meeting.
Property Week: The Middle Eastern investors behind a high-profile residential development in Leeds City Island are considering renting out the entire second phase of the complex after failing to sell any of the 185 flats.
Marketwatch: U.S. April payrolls down 20,000, job rate falls to 5.0%.
Marketwatch: The housing slump has created another type of pain: the suffering of people who find themselves navigating a tight rental market after losing their home to foreclosure.
Reuters: Even as it prepares to be acquired by Bank of America Corp, Countrywide Financial Corp's descent to a "junk" credit rating could hinder its ability to make loans and collect deposits, the mortgage company has warned.
Property Week: Britain's big banks stand to lose as much as a fifth of their profits as the commercial property market implodes, the Bank of England has warned.
Gold Money: A 4-Month Review.
Reuters: Retailer Home Depot Inc, which has been battered by the slumping housing market, on Thursday said it plans to close 15 underperforming U.S. stores and will curb future openings.
Reuters: U.S. manufacturing contracted for a third straight month in April while the number of workers claiming jobless benefits hit a four-year high and planned layoffs soared, according to data on Thursday that showed the economy remained on shaky ground.