Home Prices Mostly Stable

According to the latest survey of home prices by the National Association of Realtors, released on Tuesday, 91 out of 152 U.S. metropolitan statistical areas recorded higher median existing single-family home prices compared with the first quarter of 2009; three MSAs were unchanged; and 58 metros experienced price declines.

May 12, 2010
By Dees Stribling, Contributing Editor

Lawrence Yun, Courtesy Flickr Creative Commons user tboard

According to the latest survey of home prices by the National Association of Realtors, released on Tuesday, 91 out of 152 U.S. metropolitan statistical areas recorded higher median existing single-family home prices compared with the first quarter of 2009; three MSAs were unchanged; and 58 metros experienced price declines.

The national median existing single-family price during 1Q10 was $166,100, down 0.7 percent from the first quarter 2009 price of $167,300, the NAR survey said. “We see double-digit price increases in the San Francisco Bay region and in smaller metros in the Northeast,” Lawrence Yun, chief economist at the NAR, noted in a statement. “Price gains in some Midwestern markets are not very meaningful because of comparisons to very high levels of distressed homes that were sold at huge discounts a year ago.”

In the multifamily for-sale property sector, metro area condo and cooperative prices–covering changes in 55 metro areas–showed the national median existing-condo price was essentially unchanged at $170,700 during the first quarter of 2010, down 0.1 percent from 1Q09. Twenty-four metros showed increases in the median condo price from a year earlier and 31 areas had declines.

FDIC Votes to Change Securitization Rukes

The Federal Deposit Insurance Corp. voted 3-2 on Tuesday to seek public comment, which is a step closer to finalizing it as a rule, on a measure requiring sellers of securitized loans to keep 5 percent of the credit risk. In exchange for that, the sellers would receive safe-harbor protection, which makes their bonds more attractive.

The FDIC may merely be a step ahead of Congress, which is mulling such a requirement as a law. The House has already passed the requirement, and it’s pending in the Senate. The FDIC proposal would also require sellers to make other kinds of disclosures about the structure of their bonds, as well as the payment history of the loans backing the bonds, and the sellers’ compensation structure.

In a separate vote on Tuesday, the agency approved a measure to require “funeral plans” from the nation’s largest banks (roughly 40 of them); that rule too will now be open to public comment. The vote wasn’t divided in this case, but unanimous among the five board members.

Such plans would detail the winding-down steps needed to be taken in case the financial institution found itself on brink of failure. The rule would apply to institutions that are part of bank holding companies with more than $100 billion in assets and which themselves have more than $10 billion in assets.

Congress Passes Buck on GSEs

What to do when you have a multi-billion-dollar problem? If you’re the U.S. Senate. delegate a study of the problem to someone else that’s already studying the problem and likely to come up with recommendations next year.

In an amendment to the financial regulation bill now pending in the Senate, the U.S. Secretary of the Treasury is directed to study Fannie Mae and Freddie Mac to see what can be done. A competing amendment would have set a timetable for extracting the federal government from its conservatorship of the GSEs and eventually winding them down all together (after about 13 years, an eternity on Capitol Hill). That amendment failed.

Wall Street had a rollicking day on Tuesday, but not as rollicking as last week, and ended up mixed. The Dow Jones Industrial Average lost a meager 36.88 points, or 0.34 percent, and the S&P 500 was also down 0.34 percent. The Nasdaq eked out a gain of 0.03 percent.