Commercial 2011 – Year of Gain or Pain?

July 23, 2011

The volume of investment in the global commercial real estate space skyrocketed in the second quarter, compared to a year ago, with large gains particularly in North American markets.  But the good times may not last. An outlook report from Deloitte & Touche on the commercial real estate market is titled “A year of gain or pain.”

That report concludes that more than $1.7 trillion worth of CRE debt — held by banks, commercial mortgage-backed securities, life insurance companies and other lenders — will come due between 2011 and 2015.  And an estimated 60% of these loans are underwater. But investors remain interested in the market globally.

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US – One million foreclosures delayed to 2012 or later

July 23, 2011

Processing problems at the major mortgage servicers pushed up to 1 million foreclosure actions that should have taken place in 2011 into 2012 and beyond, according to RealtyTrac.

Lenders issued a foreclosure filing on more than 1.1 million properties in the first half 2011, down 29% from the same period one year ago. More than 608,000 properties received a filing in the second quarter, down 32% from the same period last year. And foreclosures in June were down 29% from one year ago, the ninth straight month of yearly declines.

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U.S. June Sluggish Job Gains, Unemployment Edges up to 9.2%

July 14, 2011

For a second month, the U.S. economy made only sluggish gains in jobs in June as the national unemployment rate edged up to 9.2 percent, the U.S. Labor Department reported Friday.  Non-farm payroll jobs — not counting the self-employed –– increased by a net 18,000 in June, less than many economists had expected, following May’s adjusted gain of 25,000.

Private business added 57,000 jobs last month, but the private sector lost 39,000 positions, with the federal government shedding 14,000 workers.  BLS reports for recent months show a distinct slowing in U.S. job growth.  Jobs rose by an average of 215,000 per month from February through April, but gains averaged only 22,000 in May and June.

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US Mortgage Rate Drops on Weak Job Report

July 14, 2011

Mortgage rates slipped across all product types following weaker job gains and an increase in the unemployment rate, according to the Freddie Mac market survey.  The 30-year fixed-rate mortgage averaged 4.51% with an average 0.7 point for the week ending July 14, down 9 basis points from from a week ago. One year ago, the rate was 4.57%.

The 15-year FRM averaged 3.65% with an average 0.6 point, down 10 bps from the previous week. One year ago, the rate reached above 4%.  The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.29% with an average 0.6 point, down slightly from 3.3% last week. One year ago it was at 3.85%. The 1-year Treasury-indexed ARM averaged 2.95% with an average 0.5 point, a decrease of 6 bps from last week.

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US Labour Market Highlight

July 11, 2011

Most major industries were little changed. Goods-producing jobs edged up 4,000, following a 3,000 rise in May. Manufacturing jobs rebounded 6,000 after a 2,000 dip in May. However, construction declined 9,000 after decreasing 4,000. Mining advanced 8,000, following 9,000 gain the prior month.

Growth in private service-providing jobs slowed to a rise of 53,000 after a 70,000 increase the prior month. Leading the increase in June was leisure & hospitality, up 34,000 with professional & technical services, up 24,000. Health care continued to trend upward with a 14,000 boost.  On the downside, standouts were educational services, down 17,400; financial activities, down 15,000; and temp help, down 12,000.

The government sector shed another 39,000, following a 48,000 drop in May. This latest decrease was led by local government but declines were also seen at state and federal levels.

Average hourly earnings also slowed June, coming in at no change, following a 0.3 percent rise the prior month. The consensus forecast was for a 0.2 percent increase. The average workweek for all workers in June slipped to 34.3 hours from 34.4 the month before. The June figure came in lower than the market projection for 34.4 hours.

On a year-ago basis, overall payroll jobs in June improved to a still soft 0.8 percent from 0.6 percent the previous month.

Source: Econoday

BLS – May 2011 Mass Layoff Report

July 11, 2011

The national unemployment rate was 9.1 percent in May, essentially unchanged from the prior month but down from 9.6 percent a year earlier.  In May, total nonfarm payroll employment increased by 54,000 over the month and by 870,000 over the year.

Employers took 1,599 mass layoff actions in May involving 143,540 workers, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month.   The number of mass layoff events in May increased by 35, or 2 percent, from April, while the number of associated initial claims decreased by 387, or less than 1 percent. In May, 373 mass layoff events were reported in the manufacturing sector, seasonally adjusted, resulting in 38,673 initial claims; both figures increased over the month.

The West registered the largest over-the-year decrease in initial claims.  California recorded the highest number of mass layoff initial claims in May, followed by Pennsylvania, Florida, and Mississippi. Twenty-nine states experienced over-the-year increases in initial claims, led by Mississippi.

Source: Bureau of Labor Statistics

Home prices climb but may soon peak: surveys

July 8, 2011

Average house prices continue to climb in Canada, but recent steep increases may give way to a less frantic market by the end of the year, according to a new study released Thursday.  Royal LePage’s House Price Survey and Market Survey Forecast noted sizeable year-over-year increases across all types of housing in the second quarter of 2011.

But it said prices may be at their peak in many cities, saying current dramatic increases are simply unsustainable. “In many of Canada’s regional markets, we saw house prices appreciate at a significantly faster rate than wages and salaries, and this trend cannot continue indefinitely,” Royal LePage President Phil Soper said in a release. “We expect price gains to moderate considerably in the latter half of 2011, which should reduce the stress associated with purchasing a new home.”

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