- Mar 03, 2010
March 3, 2010
By Dees Stribling, Contributing Editor
Green Street Advisors reported on Tuesday that its Commercial Property Price Index rose by 1 percent in February, compared with the previous month. According to the company, U.S. commercial property values have now risen by a little more than 10 percent since hitting a trough in May 2009, but values are still off by roughly 30 percent from their ’07 peak.
Valuations are still a little tough to gauge, however, since CRE transaction volume remains low. Still, according to Green Street, pricing on transactions that have recently closed or that are in the works continues to surprise on the high side.
“The good news is that pricing has been firming since the middle of ’09, especially in the last six months,” noted Mike Kirby, Green Street’s director of research, in the report. “Sellers are feeling less pressure to act, the outlook for fundamentals has become clearer, well-capitalized buyers are becoming plentiful, and return requirements across capital markets have come down.”
The “bad news” may be that pricing is still far below the levels of 2005 through ’07. But does CRE really want to be on top of the bubble again?
HARP Keeps On Keeping On
The Federal Housing Finance Agency announced on Tuesday that the Home Affordable Refinance Program, or HARP, is being extended until June 30, 2011. The program, administered by Fannie Mae and Freddie Mac, is a part of the Obama administration’s Making Home Affordable Program launched last February.
“FHFA has reviewed the current market situation and the state of mortgage insurance availability and has determined that the market conditions that necessitated the actions taken last year have not materially changed,” Ed DeMarco, acting director of the agency, said in a statement.
Still stuck in the bog, in other words. Of the roughly 4 million mortgages that Fannie Mae and Freddie Mac purchased or guaranteed last year, not that many were actually HARP refinances–just a little over 190,100.
The Fed Looks into the “Mancession”
A clunky term has been coined to describe the fact that this recession has seem more men lose their jobs than women: “Mancession.” The phenomenon has gotten the attention of no less than the Federal Reserve Bank of New York, which recently published a monograph called “The Unemployment Gender Gap during the 2007 Recession.”
“A breakdown of the employment figures shows that men have been affected more adversely than women during the 2007 downturn,” the paper noted. “Between December 2007 and October 2009, nonfarm payroll employment fell 5.8 million for men but dropped only 2.5 million for women. While male and female unemployment rates were roughly equal at the start of this period–5.1 percent and 4.9 percent, respectively–they have since diverged markedly.
“In August 2009, the unemployment rate for men stood at 11.0 percent while that for women was 8.3 percent–a 2.7 percentage point difference that constitutes the largest unemployment gender gap in the postwar era.”
How come? Mainly because industries such as manufacturing and especially construction, which tend to employee a lot more men than women, have taken body blows during this recession.
Wall Street ended up pretty much where it started on Tuesday, with the Dow Jones Industrial Average gaining a minuscule 2.19 points, or 0.02 percent. The S&P 500 gained 0.23 percent and the Nasdaq was up 0.32 percent.