Friday, March 25, 2011

Housing News Digest, March 25

Morgan Stanley’s Deep Secret Now Is Revealed: Jonathan Weil
Here’s a little secret the Federal Reserve Board doesn’t want you to know. On Sept. 24, 2008, while financial markets were collapsing, Morgan Stanley borrowed $3.5 billion through the Fed’s oldest lending program, the 98-year- old discount window.

The Fed has long claimed that releasing this type of data could trigger bank runs, public hysteria, death spirals at financial institutions large and small, and other horrible outcomes. Yet I’ve got a hunch Morgan Stanley somehow will survive this revelation. Mass panic will not ensue. The world will not end.

State by State Estimate of Shadow Inventory
Differences in the levels of foreclosure and seriously delinquent inventory, as well as the saturation of distressed sales in total existing sales are naturally causing varying levels of shadow inventory across states. State by state estimate of shadow inventory presented here is based on the same method as described in the March 2010 shadow inventory article(PDF).

Northern Colorado housing presentation a mixed bag
On a more serious note, Laposa briefed the 130 audience members, including the not-so-happy lenders, on the results of a 2011 residential survey during the two-hour “Housing Colorado’s Future” presentation.

The survey combined the results of three separate surveys of the Colorado Association of Realtors, the Colorado Association of Home Builders and the Colorado Mortgage Lenders Association.

Survey says tough market ahead
Highlights of the report include higher expectations for jobs than interest rates this year compared to last.

All three organizations indicated employment growth would be stagnant, while interest rates were likely to rise.

Slow start for new homes
New home building activity in the Denver area was down 43.2 percent in February from February 2010, according to the latest report released by the Home Builders Association of Metro Denver.

There were only 267 building permits pulled in the Denver area in February, compared with 462 in February 2010, shows the report, which tracks apartments, single-family attached and single-family detached homes in 28 counties and municipalities from Erie to Parker. It includes the counties of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Elbert, and Jefferson. Building permits track future construction activity.