Existing Home Sales, Prices Up in Some Places
- Feb 12, 2010
February 12, 2010
By Dees Stribling, Contributing Editor
Existing home sales and prices both bumped upward in some, but hardly all, U.S. metro markets in 4Q09, according to the National Association of Realtors in a report on Thursday. The organization chalked up the relative strength of the market to the new-buyer tax credit and continuing low interest rates.
Compared with 4Q08–when the world was fairly much in panic mode–existing homes were up 27.2 percent in 4Q09, totaling 6.03 million units (counting both single-family houses and condos). Compared with the previous quarter, fourth-quarter sales were up 13.9 percent. The NAR noted that distressed properties accounted for 32 percent of all 4Q09 transactions, down from 37 percent during the last quarter of 2008.
Sixty-seven out of 151 U.S. metropolitan statistical areas reported higher median single-family home prices during 4Q09 than a year earlier. One MSA was unchanged and 84 metro areas saw price declines. The ever-optimistic NAR chief economist Lawrence Yun said in a statement that “with inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices.”
COP Says CRE to Sink Community Banks
On the commercial side of things, the Congressional Oversight Panel, which is the body reviewing the $700 billion bailout, released a more pessimistic report on Thursday. The panel fears especially for the fate of many of the nation’s community banks, which are tied to underwater commercial real estate loans so tightly that the banks will be pulled under too.
The report noted that about $1.4 trillion in CRE loans will need to be refinanced between now and 2014. About half of that total are underwater. Some estimates (such as by Deutsche Bank) say that about 65 percent of CRE loans are un-refinanceable under new-normal and much tougher underwriting standards.
What to do about the problem? For starters, the panel’s chairwoman, Elizabeth Warren, wants the U.S. Department of the Treasury to do stress tests on smaller banks, something like Treasury did with 19 of the largest banks last year. Treasury Secretary Timothy Geithner is resisting that idea as “impractical.”
LEED Platinum Freezer/Cooler Under Way
Despite the prolonged CRE slump, interest in sustainable development and the LEED certification process haven’t died off. Ground was broken on Thursday on the South Side of Chicago for an unusual example: a 91,000-square-foot freezer/cooler distribution center that will seek LEED Platinum certification, the highest level.
The facility, which will be occupied by Testa Produce Inc., is on 13 acres at the Stockyards Industrial Park and will be built by Summit Design + Build. It will include a large wind turbine to co-generate electricity, hot water solar panels, PV solar panels, a green roof, rainwater harvesting and daylight harvesting, among other environmentally friendly features.
Is it still worth it to go for LEED in these trying times? Martha Jungenberg, SSA 13 program director of the Stockyards Industrial Park, asserted to CPE that it is.
“In the long run, building a LEED-certified facility is a cost-effective business decision,” she said. “The energy savings alone justify the investment, and a company’s brand and company reputation will be elevated in the eyes of its customers and other stakeholders. We hope to attract more LEED development to the Stockyards Industrial Park in the years to come.”
Wall Street seemed to be happy on Thursday that the EU sort-of committed to bail out Greece, with the Dow Jones Industrial Average gaining 105.81 points, or 1.05 percent, while the S&P 500 was up 0.97 percent and the Nasdaq advanced 1.38 percent.