SOURCE: The New York Times

Redfin, an online real estate brokerage firm based in Seattle, had received $12 million investment led by the marquee venture capital firm Draper Fisher Jurvetson. After the investment the mortgage industry melted down and home sales slowed to a crawl. Zillow, Terabitz and Trulia, another online start up were in the same boat.

Even though the real estate industry has taken a bit hit, these online start-ups are surviving nicely. Each company recently reported strong sales and increases in Web traffic.

"In September, we thought it was maybe the beginning of a very long downturn," said Glenn Kelman, Redfin's chief executive. "But for whatever reason, the last few months have been very strong for us."

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SOURCE: Biz Journals

According to a survey by the California Mortgage Bankers Association, commercial loan delinquencies for the state continued at a historically low level in the fourth quarter of 2007.

The rate was the fourth-lowest reported the second quarter of 2002, and was up slightly from the third quarter of 2007.

There were 4 loans that were more than three months delinquent, out of a total 9,932 surveyed, the CMBA found. They included a $27.3 million loan on an office building in San Francisco, a $4.8 million loan on a health care facility in San Diego County, a $4 million hotel loan in Alameda County and a $2.6 million office building loan in Orange County.

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SOURCE: Reuters

The cut of three-quarters of a percentage point lowered mortgage rates to their lowest level in nearly four years.

"The increase in the conforming loan limit should have a positive impact on the housing market, and overall I would say the package is large enough that it should have a notable impact on GDP growth," said Dean Maki, chief U.S. economist, Barclays Capital in New York.

The measure will help the more credit-worthy borrowers and with more financing from Fannie Mae and Freddie Mac will likely only stimulate sales of pricier homes. It will not, however, help those already in trouble.

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SOURCE: The Star / Reuters

Despite the residential market real estate problems, the U.S. commercial real estate business remains solid, as stated in a new report by accounting firm Deloitte and Touche.

"The Real Estate Capital Markets Outlook for 2008," to be released Tuesday, mentions that even though the growth may be slow over the last several years might have allowed commercial property to be doing compared to other investments.

"The message is, don't panic," said Dennis Yeskey, national director of Deloitte Consulting LLP's real estate capital markets group and an author of the report. "Commercial real estate is not the next shoe to drop."

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SOURCE: USATODAY

With the new rate cut from the Federal Reserve, there are a few good questions to ask: How long will it be before the economy is on the upswing? What can happen to the economy from the adjustment? How will this intake cash affect the stock market?

The Federal Reserve cuts short-term rates when it wants to boost the economy. The Fed cut its target rate for fed funds by three-quarters of a point, from 4.25% to 3.5%.

Lower rates mean there is more money to lend. Companies find it easier to get commercial loans for new factories and trucks. As companies expand, they can hire workers… thus helps the economy as a whole.

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SOURCE: Yahoo Finance

With the glut of unsold homes on the market, rental prices are affordable. In the hardest hit regions of the subprime crisis finding a rental apartment is easy. Homeowners, forced out by foreclosure, are paying up to 70% off what they were paying for on their mortgages.

"Vacancies have risen in 29 markets in the fourth quarter of 2007, including Las Vegas, Palm Beach, Memphis, Orange County, Calif., and Orlando." according to Reis Inc., a New York real-estate research firm. Ron Witten, a Dallas-based housing analyst, "estimates there are 760,000 vacant condos and homes for sale nationwide beyond what the market could normally carry, in addition to a surplus of 350,000 vacant rental properties."

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SOURCE: Mortgage Solutions

With the new changes and heightened measures on lending criteria from banks, businesses will be seeking help from Commercial Mortgage Brokers in 2008.

According to Base Commercial Mortgages stated that the credit markets are causing issues for businesses and they are looking to professional commercial brokers for help.

Paul Marland, sales and marketing director at Base Commercial, said: "My recommendation is for residential brokers to consider forming business alliances with professional commercial brokers in their area, to enable them to offer the best possible service to their clients."

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SOURCE: Houston Business Journal

Seeing an opportunity, Rob Banzhaf and Trey Halberdier opened BanDier Realty Partners in early January. BanDier Realty Partners is a commercial real estate investment, development and brokerage partnership.

They believe the market is ripe. "We really felt -- contrary to a lot of people -- that it was a pretty good time," Banzhaf says.

Tyndall Yaap, managing director of the industrial division at Capital Commercial Investments, notes that in the industrial and offices markets, "we are at, or near, some historic low vacancy rates."

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SOURCE: National Real Estate Investor

According to a national forecast by real estate investment services firm Marcus & Millichap, rent growth in San Francisco, CA will lead the nation in 2008.

With an estimated employment growth of the region at 10,200 this year, new workers will need to choose between apartments and one of the nation's most expensive homes markets. This is why forecasters are expecting renter demand to increase the citywide vacancy rate to drop 30 basis points by the end of 2008.

Landlords will have the upper hand in pricing control. Asking rents are expected to rise 7.8% with the average rent being $1,995.00 per month.

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SOURCE: CNN Money

According to the Mortgage Bankers Association,
the number of applications filed jumped, stating seasonal volatility and falling interest rates as factors.

Last week the MBA's survey mentioned the
volume of applications increased 28.4 percent during the week ending January, 11th. Application volume jumped 39 percent during the same week a year ago.

Refinance volume rose 43.4 percent, while purchase volume jumped 11.4 percent. Refinance volume accounted for 62.7 percent of total application volume, compared with 57.7 percent the previous week.

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SOURCE: Market Watch

Borrowers and lenders have made short sighted mistakes that may be cause for concern, but recovery may still be possible, especially in the commercial real estate financial industry.

William Poole, St. Louis Federal Reserve president says that he believes economic growth will continue this year.

Poole is an influential member of the Federal Open Market Committee (FOMC). Even with big Wall Street firms joining the ranks forecasting a recession, Poole feels that the country will avoid one as he says the fundamentals of the economy remain strong.

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SOURCE: Market Watch

Freddie Mac says 30-year fixed rate is the lowest since September 2005.

More bad news brings another drop in mortgage rates causing more homeowners to refinance.

Recent indicators showing weak economic conditions caused mortgage rates to drop yet again this week. The rate on a 30-year fixed mortgage is averaging 5.87%.

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SOURCE: Market Watch

Concerns over California real estate could send the state's economy into recession.

California as well as other high-cost areas of the U.S. have seen borrowers with great credit using subprime-style gimmicks. Overpayment for homes using these gimmicks with jumbo sized loans could total a loss of $2.6 trillion statewide.

Overall, the typical Californian homeowner could see a $200,000 loss in wealth with the drop in home values.

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SOURCE: CNNMoney

Optimists are getting hard to find in the gloomy housing market

Some economists feel that the U.S. is facing the worst housing recession in its history, even stating that the country is in recession already.

Home price losses are predicted to be in the order of 30% with 10 million homes having negative equity. This gives the owners less incentive to keep making their payments and some will just walk away, depressing the markets even further.

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SOURCE: CNNMoney

Not all of Bush's proposals may pass.

Criticism is pushing the White House into action in an attempt to stave off housing foreclosures. President Bush is pushing Congress to act quickly to pass proposals that he supports.

Some of the proposals are intended to have an immediate impact to help make refinancing more affordable or to stop abusive lending.

Four of the proposals that Bush is supporting are not guaranteed to be passed by Congress.

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SOURCE: Centre Daily Times

The National Association of Realtors feels that the health of the commercial real estate market and the nation's economy as a whole will be helped by federal government's terrorism risk insurance program.

President George W. Bush signed the Terrorism Risk Insurance Revision Extension Act (TRIA), into law which will extend the program for 7 years. The feeling is that commercial real estate has been stabilized by the availability of this insurance and many financing agreements could have been negatively affected if it were no longer available.

The TRIA extension will strengthen economic security of the commercial real estate market because it reduces the uncertainty of the availability of terrorism insurance coverage.

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SOURCE: Biz Journals

Commercial market sales are just starting to slow now.

The booming growth of commercial real estate has finally begun to show signs of slowing down. Not only have sales started to taper off, the amount of space being leased has also flattened.

Even though the credit crunch startled the market this past summer, it didn't make much of dent in the number of deals that reached closure this year.

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SOURCE: Realtor News

National Association of Realtors president Richard F. Gaylord thanks President George W. Bush bringing the Mortgage Forgiveness Debt Relief Act into law.

This new Act will allow people who have lost their homes to avoid paying tax on forgiven residential mortgage debt for their principal residence. Borrowers who realize a reduced obligation to their mortgage debt will not be taxed.

For a person who is losing their home, the last thing they need is an additional tax bill that would likely be difficult to pay. The hope is that these families will have the flexibility to be able to renegotiate the terms with their lender.

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SOURCE: USA TODAY

Tuesday the Feds revealed changes to stop abusive lending practices that pushed thousands of home owners into foreclosure.

The changes will not help subprime homeowners who are in default. Stats fro the Mortgage Bankers Assoc. show 1 in 5 adjustable rate subprime loans is, at minimum, one payment behind.


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SOURCE: Portfolio

Commercial real estate owners may face the same difficulties as residential homeowners.

Even though the current subprime mortgage crisis has focused on residential homeowners so far, the commercial sector may be following close behind.

Things don't look quite as bad for commercial real estate as it's a smaller market. Also, most commercial buildings have a diverse group of tenants to draw income from.

The other key differences that will help reduce losses are that most commercial spaces can be renovated to accommodate new occupants. This, and the fact that there weren't a dramatic increase in the number of commercial spaces available as in residential, will considerably help the commercial real estate market.

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SOURCE: CNN

According to Freddie Mac, consumer spending helped lift some mortgage rates.

Bond rates rose along with some mortgage rates but other leading economic indicators tempered the news.

A 30-year fixed rate loan that averaged 6.18% this time last year currently averages 6.17%. This is up from last week's average of 6.14%

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SOURCE: CNN

With a prediction that the market will not turn around until 2009, the belief is that prices will to drop another 4 to 5 percent in 2008.

The inflated prices that began in 2001 caused the problem with affordability. These prices need to deflate in order to regain housing affordability and for the housing recovery to begin.

Subprime residential mortgages created the current credit market crisis, where the affordability issues started.

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SOURCE: USA Today

The housing crash has left more than homeowners without homes. Brokers are lacking buyers.

Without people looking for loans, lending standards being adjusted and lender who blame them for the crash, mortgage brokers are closing their doors.

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SOURCE: Yahoo Finance

Homeowners are feeling the property tax pinch and are looking for relief from states and cities.

Property owners are complaining about their tax levies which are forcing state and local governments to consider property tax cuts.

With falling real estate prices, U.S. homeowners will see a reduction in property values in the order of about $1.2 trillion this next year.

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