Atlanta
Single-family home prices in Atlanta may have declined 4.8 percent in January of this year from January 2007, but Atlanta-area real estate professionals said sales activity has been stronger in recent months, the Atlanta Journal-Constitution reported. According to research firm Metrostudy, new construction has dropped 56.5 percent since the fourth quarter of 2004, while sales were down just 37.3 percent in the same period; home sales have outpaced new housing starts since early 2007. Still, the firm said inventory is still too high by about two months, and supply could surge in the coming months.
The banks that funded metro Atlanta’s housing development during the boom are now reeling from unpaid loans from developers and builders and the burden of foreclosed property, the Atlanta Journal-Constitution reported. According to real estate research firm Foresight Analytics, of the 93 banks that issued single-family construction loans in the Atlanta metro area last year, 36 posted double-digit delinquencies. Meanwhile, overdue construction and land development loans soared.
Boston
The number of homes going into foreclosure and the amount of foreclosed properties being purchased are continuing to skyrocket in Boston-area counties, the Boston Globe reported. In Essex and Middlesex counties, the total number of filings increased by as much as 50 percent this February compared to the same time last year, according to real estate publisher the Warren Group. In Essex County, 413 foreclosure notices were filed in February compared to 247 last February; foreclosure deeds jumped to 114 from 43 in the same period. In Middlesex County, 472 foreclosure notices were filed compared to 370; there were 116 foreclosure deeds in February, up from 54 in February 2007.
Chicago
Chicago’s office market may suffer greatly in 2008, but tough times could lie ahead for commercial property owners in 2009 as well, according to two recent reports. Cushman & Wakefield’s first-quarter report said asking rents in the city’s central business district increased more than 10 percent from last year, while the vacancy rate fell 2 percent. But 3.5 million square feet of new office space could open in the city next year, the greatest amount of deliveries in a single year since 1980. Jones Lang LaSalle, meanwhile, pegged downtown Chicago’s Class A vacancy rate at less than 8 percent, but that number could balloon to 11 percent by late 2009, the Chicago Tribune reported.
The number of foreclosed homes owned by lenders and investors has doubled to make up 2.5 percent of all Chicago homes, according to research firm First American CoreLogic. Two other housing data firms calculated lower figures, but industry observers said the 100 percent year-over-year increase across the country in REOs, or real estate owned by lenders and investors, could spell trouble for Chicago’s real estate market, the Chicago Tribune reported. Property values could be affected as individual banks either wait out the slump or dump properties on a lagging market. Harris Bank of Chicago saw its REO more than double to $11.5 million in 2007, from $4.9 million the previous year.
Las Vegas
Donald Trump cut the ribbon last month on his $1.2 billion Trump International Hotel & Tower on the Las Vegas Strip, but the picture is not as rosy for a pair of high-profile projects planned for a neighboring parcel: A second Trump Tower and a $6 billion remake of New York-based Elad Group’s Plaza Hotel could be delayed due to rising construction costs and the turmoil in the credit markets, the Las Vegas Review-Journal reported. Trump plans to close all 1,282 units on his first 64-story tower before breaking ground on the second one; sales have topped $1 billion so far, Trump said. Investors had said the Plaza would be on hold until the credit crisis subsides, but Elad Group executives still hope to break ground by fall 2008.
Los Angeles
Even the prices for prime beachfront property in Southern California are dropping, the Los Angeles Times reported. The average of median sales prices in 18 beachfront areas like Santa Monica, Manhattan Beach and Long Beach was down nearly 10.2 percent in February from last year, according to DataQuick Information Systems. In Huntington Beach, the median price fell from the $785,000-to-$1.2 million range
in 2007 to between $635,000 and $827,000 this February. Still, real estate agents are cautioning buyers expecting bargains
that beachfront property in California is still significantly more expensive than inland residences.
Philadelphia
At least 10 major condominium projects proposed in Center City over the past two years have yet to break ground, the Philadelphia Business Journal reported. Developers such as Marc Stein, who had planned Bridgman’s View, a 66-story, $600 million condo that would have been Center City’s tallest residential building, attributed the delays to bad timing: A 22-month moratorium on development along the Delaware Riverfront was just lifted in February, and the credit crisis and lagging housing market continue to inhibit progress. Mandeville Place, a Richard Meier-designed luxury condo at 24th and Walnut streets, and Grasso Holdings’ 1.2 million-square-foot mixed-use project at 16th and Vine streets also have yet to come out of the ground.
Phoenix
Phoenix’s metro area is the 10th-riskiest real estate market in the country, according to Forbes.com. Reasons for the ranking include overbuilding in the area and reliance on the construction industry for job growth. The number of homes on the
market has also increased fivefold from 2005, to 53,000; homes are selling well below their asking prices, and foreclosures are on the rise. The market was also classified as risky due to the proliferation of distressed Alt-A and subprime loans in
the area, based on research from Arizona State University.
The Valley’s commercial real estate market continued to stall in the first quarter of 2008, the Arizona Republic reported. The office vacancy rate increased to 14.9 percent in the first three months of 2008 from
11.9 percent last year, according to CB
Richard Ellis. Net absorption dropped to 50,844 square feet from 379,014 square feet over the same period. In the Valley’s industrial sector, the vacancy rate was up to 10.6 percent in the first quarter, compared to 9.6 percent last year. The retail vacancy rate, meanwhile, increased from 5.1 percent in last year’s first quarter to 6.4 percent this year.
San Francisco
The number of real estate agents is falling rapidly in California as the housing market continues its sluggish pace, the San Francisco Chronicle reported. In the Bay Area, the slowdown in sales made it hard for agents to make ends meet in between commission checks. The number of licensed real estate agents in California fell from 549,244 last November to 548,879 this January; that number is expected to fall as much as 30 percent this year. The number of people signing up for the state licensing exam dropped to 1,324 in January, from 8,765 a year earlier and 14,397 two years ago.
Seattle
Single-family home sales in Seattle decreased 2.2 percent in March from March 2007, while pending sales dropped 29 percent over that period, the Seattle Post-Intelligencer reported. However, other facets of the market in and around Seattle are looking up: The median price for in-city condominiums increased 4.9 percent in March from February, and the median price of single-family homes in the outlying King County grew 2.3 percent. The market is still glutted, though, with 61 percent more condo listings in Seattle, and 64 percent more in King County, than last year.
Washington, D.C.
Numerous municipalities, schools and hospitals in Washington, D.C., are experiencing the fallout of the subprime mortgage crisis as interest rates on unconventional bonds begin skyrocketing, the Washington Post reported. Interest rates have doubled — even tripled — in the District on $601 million of these bonds, leaving an extra $1.2 million in debt payments on the city’s plate every month. City officials said investment banks convinced them that the unconventional bonds, known as auction-rate securities, would be safer and cheaper than traditional borrowing, but the market for these bonds collapsed. Affected bodies include the Washington Nationals’ new stadium, Georgetown University and Johns Hopkins.