Home Sales Mushroom Ahead of Tax-Credit Sunset
- Apr 23, 2010
April 23, 2010
By Dees Stribling, Contributing Editor
As expected, existing home sales spiked in March, according to the National Association of Realtors. Compared with February, sales were up 6.8 percent to an annualized rate of 5.35 million. Compared with March 2009, sales are up 16.1 percent.
The near-universal supposition is that the federal homebuyer tax-credit programs goosed the market to these highs, and that a downtick is now dead ahead. The question that no one can answer at this juncture is whether the market just needs a little tough love, and can stand on its own for the rest of the year; or whether the patient is being tossed out of physical therapy too soon and will end up face down on the floor.
As always, NAR chief economist Lawrence Yun put the best face on things by proclaiming the tax credit a “resounding success.” It is preserving “perhaps $1 trillion in largely middle-class housing wealth that may have been wiped out without the housing stimulus,” he asserted in a statement on Thursday.
Luxury Hotels Making a Comeback?
First-quarter corporate reports have been coming fast-and-thick in recent days, and sometimes tucked away in the numbers are glimmers of hope for beleaguered real estate segments. One such example came on Thursday from hotelier Marriott International Inc.
Marriott’s returns for the quarter did show an overall return to profits, some $83 million during 1Q10 compared with a loss of $23 million in 1Q09. A key hotel metric, however, revenue per available room (RevPAR), was down 0.7 percent compared with the same quarter last year throughout the company’s holdings, which include the Marriott, Renaissance and Ritz-Carlton flags.
But that masked some differences among the brands, including a considerable improvement in the luxury Ritz-Carlton’s RevPAR for the quarter. “Our worldwide luxury business showed outstanding results,” said Arne Sorenson, president and COO of Marriott International Inc. during Thursday’s conference call. “For the fiscal first quarter, which included January and February, Ritz-Carlton RevPAR rose 2 percent… in March, their RevPAR was up 17 percent. We are welcoming back corporate travelers, selling more club-level rooms and suites, and booking more groups at Ritz-Carlton.”
CRE Originations Had a Lousy Year: It’s Official
In the no-surprise department on Thursday, the Mortgage Bankers Association reported that commercial mortgage originations dropped 46 percent in 2009, compared with 2008. A total of $82.3 billion in commercial loans (including multifamily) closed last year.
Multifamily in fact led the pack in ’09, accounting for $36.5 billion, or 44 percent, of total originations. Fannie Mae and Freddie Mac may be in dire straits, but as far as multifamily lending is concerned, they’re still the engines pulling all the other cars.
Wall Street had a long slog to positive territory on Thursday, but made it: The Dow Jones Industrial Average was up 9.37 percent, or 0.08 percent. The S&P 500 gained 0.23 percent and the Nasdaq advanced 0.58 percent.