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If the American Dream’s Faded, What’s Next?

2009-11-10T18:07:48Z

: Everett Collection; An ad for new homes from the 1930s.

The housing crash has certainly erased much of the excitement over homeownership, and many people continue waiting out the downturn by renting. But could this be a permanent shift away from white picket fences? That’s something Americans are debating.

One private home builder worries that longer-term renting might not end once the market recovers.

“I see a psycho-social shift in attitudes about home ownership. People now no longer believe that the ‘American Dream’ of home ownership is accessible, or even a good investment,” the mid-Atlantic builder tells Citi analyst Josh Levin for a client note. But “they also have not reconciled themselves to becoming permanent renters. Clearly, the market is in flux.”

The builder wonders if a new product or market will emerge, such as rent-to-buy or long-term leases: “People do not want to live in six-month cycles (typical lease), but they do not want to make the 30-year commitment to a sinking fund investment either.”

Readers, how has your opinion of renting and owning changed?

Lufkin Automation moving headquarters to Missouri City

2009-11-10T15:35:00Z

(Missouri City) - The City of Missouri City and the Greater Fort Bend Economic Development Council announced the sale of 6.2 acres in Trammell Crow Company’s new Lakeview Business Park where Lufkin Automation will construct a 40,000-sf compa ...

1M-SF JPMorgan Chase Center sold in Houston

2009-11-10T15:33:00Z

(Houston) - The 1.1 million-sf JPMorgan Chase Center in Houston’s central business district has gone to a new owner, Texas Tower Ltd. The Class A office building, valued by the Houston County Appraisal District at $32 million, is adjacent to ...

Casino Operator Resigns After Threatening Local Official

2009-11-10T16:30:29Z

It’s not so easy running a casino these days.

Las Vegas’s woes are well-documented. But for those casino operators in America’s heartland, the picture’s been different. These folks aren’t as vulnerable to the weaknesses in non-gaming areas such as lodging, fine dining or air travel. It’s been easier getting locals to while away their time at nearby gaming tables. Still it’s a fragile time: If the economy doesn’t get you, something else might trip you up. Take regional gaming operator Pinnacle Entertainment Inc. and it’s now-former chief executive Dan Lee.

On Monday, Mr. Lee abruptly resigned as chief executive of Pinnacle while he is being investigated by Missouri regulators for alleged verbal threats against a local politician.

Pinnacle’s official line Monday was that Lee resigned to “pursue other business interests.” Nonetheless, most industry experts say a flap last week with St. Louis County Council* Member Steve Stenger forced Mr. Lee’s exit. Mr. Lee was highly regarded as a visionary on Wall Street and his departure is seen as a loss for the company even though Pinnacle’s stock closed up 4.1% to $9.08 amid a broad market rally.

Mr. Lee is accused of making verbal threats to Mr. Stenger after he voted to approve a zoning law that would potentially allow another casino development to compete with Pinnacle in the St. Louis market, confirmed LeAnn McCarthy, a spokeswoman for the Missouri Gaming Commission. She said the investigation will continue despite Lee’s resignation.

A representative from Mr. Stenger’s office wasn’t immediately available for comment.

According an article in the St Louis Dispatch, after Mr. Stenger’s vote, Mr. Lee ran towards the dais and said he “made the worst move in his political career.”

Lee later apologized to the councilman. Las Vegas-based Pinnacle has a second casino development project under construction in the St. Louis area, dubbed River City. The opening of that development is contingent upon final approval by the Missouri regulator.

Some analysts said Lee’s exit could be positive for the shares. Joseph Greff, a JP Morgan analyst, said in a report that amid a leadership transition, the board may decide to halt or alter the timing of two projects in Louisiana. This “could allow [Pinnacle] to be more of a net free cash flow generator, especially as it seeks to extend its revolver,” Greff said.

Pinnacle said board members Richard J. Goeglein and John V. Giovenco were named interim nonexecutive chairman and interim chief executive respectively.

*Correction: An earlier version of this post said that Mr. Stenger is a member of the St. Louis City Council. That was incorrect. He is a member of the St. Louis County Council.

Real Estate News: Lone Star Cuts Fees, Beazer Posts Profit

2009-11-10T15:52:02Z

Real Estate News compiles a daily wrap-up from each morning’s Wall Street Journal and other news sources.

Lone Star Cuts Fees to Seed Funds (WSJ): John Grayken, head of real-estate private-equity giant Lone Star Funds, is doing what once would have seemed outlandish: Cutting some of his fees by more than 50%.

Beazer Posts Quarterly Profit (WSJ): Beazer Homes swung to a $33.8 million profit in its fiscal fourth-quarter on a gain from repaying debt early as home builder’s orders rose and margins improved.

MBIA Reports Narrower Loss (WSJ): MBIA’s loss narrowed slightly as losses in the insurance business were greater than expected and the housing downturn continued to cause asset losses.

Attack of the Home Buyers’ Tax Credit (NYT Economix): One reason to fret about federal anti-recessionary fixes is that they often last long after the crisis that justified their creation.

FHA Reserves Are Low (Washington Post): The Federal Housing Administration has burned through its cash reserves and could soon wind up with what amounts to an automatic taxpayer bailout if fortunes don’t improve.

Home Buyer Tax Credit’s Impact: Mostly in Our Heads

2009-11-10T15:08:39Z

Realtors shouldn’t pop the cork over the passage of a home-buyer tax credit extension yet, especially in some of the hardest-hit and most expensive housing markets, according to a new report from Deutsche Bank. Analysts argue that the tax credit’s impact has generally been overstated and that its impact going forward is likely to be uneven. However, the report concludes that the credit has psychological value in propping up the housing market.

Deutsche Bank estimates that the first-time home buyer tax credit worth up to $8,000 cost around $43,000 per home buyer, or around $15 billion for the estimated 350,000 home buyers who wouldn’t otherwise have purchased a home without the tax credit. The report estimates that just around 5% of all sales through mid-October wouldn’t have happened without the tax credit (or around one in five of the 1.4 million home buyers who filed for the tax credit through mid-October).

Still, analysts figure that the expanded income limits in the new credit, which went into effect on Saturday and gives existing home buyers a $6,500 credit, could translate into another $150,000 in purchasing power and that an $800,000 cap on homes eligible for the credit will exclude only around 3% of all homes.

The report notes that while the tax credit hasn’t created the boost for home sales that “some euphoric headlines would imply,” analysts “can’t dispute that it has been meaningful in bolstering consumer psychology and general housing market sentiment.”

The report concludes: “While the actual impact on sales numbers may be relatively light, the impact on consumer psychology, and that second-order impact on the housing market, could be meaningful, and should serve to take a worst-case scenario off the table, at least over the next several months.”

The impact of the credit is also likely to have uneven results geographically: an $8,000 credit in Cleveland, for example, offers buyers around 9.8% off of the median home price, while the same credit only goes for around 1.7% of the price in Honolulu.

In other markets, a glut of bank-owned property may offset any demand stimulated by the credit, including Miami and Fort Myers, Fla., where more than one-third of homes are in some stage of foreclosure: “Because this particularly policy tool is a blunt instrument, its application will be uneven when applied to different markets that have very different home price levels and degrees of economic stress.”

October's Blog of the Month Awarded to Mark Juleen

2009-11-10T16:04:41Z

The great thing about a Mark Juleen blog is that it always questions the status quo. Mark sees a lot of potential for change and improvement in the multifamily industry and isn't afraid to stir the pot. For this, Mark wins a $50 gift card of his choice, sponsored by RentWiki!

Episode 17 - The Rent.com Debacle

We also want to take a moment to thank RentWiki for sponsoring the Blog Of The Month Contest! They have been a fantastic sponsor for MFI, so please take a moment to click on their banner and check them out!

Houston area foreclosure rate rises in September

2009-11-10T12:21:00Z

The foreclosure rate in the Houston-Sugar Land-Baytown area in September this year was 0.5 percent higher than in the same month last year, according to a new report from First American CoreLogic. The rate measures the percentage of loans in some ...

FBI headquarters, "the Emerald City" for Houston

2009-11-10T12:20:00Z

(Houston) - The eight-story FBI Houston Field Office building at 1 Justice Park is green, and not just because it is the one and only occupant on the block on Justice Park off 43rd St.

1,500 Acres to double Village Creek State Park

2009-11-10T12:18:00Z

(Hardin County) - Texas Parks and Wildlife Commissioners agreed to purchase a tract of land that will more than double the size of Village Creek State Park.

NCTCOG industrial starts 3Q 2009

2009-11-10T11:55:00Z

According to the North Central Texas Council of Governments (NCTCOG), developments began construction on 1,224,000 sf in third quarter 2009. The NCTCOG also reported that 1,633,581 sf of industrial space was completed during 3Q ...

Houston: Serrano Apartments purchased

2009-11-10T11:54:00Z

Los Angeles-based Post Investment Group has acquired two assets from foreclosure. Between acquisitions and planned rehab, the company will spend in excess of $40 million on Serrano Apartments in Houston and Longhorn Station Apartments in ...

NCTCOG industrial completions 3Q 2009

2009-11-10T11:47:00Z

According to the North Central Texas Council of Governments (NCTCOG), 1,633,581 sf of industrial space was completed in third quarter 2009. The NCTCOG also reported that developments announced during 3Q 2009 totaled 1,224,000 sf.

Public Needs Better Protection from Drug Grow-ops, say Alberta Realtors

2009-11-10T06:00:00Z

Police say marijuana cultivation has reached "epidemic proportions", posing a threat to public safety. Now Alberta Realtors have sponsored the creation of guidelines to clean up properties that have been used as grow-ops.

Court Rejects Expert Mold Testimony

2009-11-10T06:00:00Z

More often than is widely acknowledged, courts come up with good and sensible rulings. When that happens, we do well to acknowledge them. In the case of Dee v. PCS Property Management, California's Second Appellate District Court of Appeal affirmed the good ruling of a trial judge. Inasmuch as the case had to do with claims regarding mold, it is of more than a little interest to a variety of parties involved with real estate.

Real Estate Outlook: Pending Sales Rise

2009-11-10T06:00:00Z

A record jump in pending home sales -- pointing to higher numbers of closed transactions in the next two to three months -- tops the housing economic news this week.

Realtors, Wary of Zillow, Build Their Own Data Tool

2009-11-09T21:23:50Z

Realtors are fighting back against the idea that consumers might be able to use the Internet to bypass them.

The National Association of Realtors announced Monday a plan to give more data to real estate agents eager to show they can still provide valuable information at a time when more and more home shoppers rely on the Internet to bone up on the market.

The trade organization said it has acquired licenses for property-related data and related technology from Lender Processing Services Inc., or LPS. Terms weren’t disclosed, but NAR officials said in a presentation to members last week that they were investing $12 million in assets from LPS and its Cyberhomes unit.

The data are to feed a service called Realtors Property Resource, to be launched in next year’s second quarter and available only to the 1.2 million members of the trade group. It will include such information as past sales prices, tax assessments, zoning restrictions and liens on more than 147 million properties across the U.S., the Realtors said. The service also will include software to estimate the market value of homes.

The NAR hopes to build a profitable business by selling home-value analytical tools to Wall Street firms, federal agencies and other parties.

When shopping for homes, many consumers consult such Web sites as Zillow Inc.’s Zillow.com or Tree.com Inc.’s RealEstate.com to get a sense of the housing market and data on specific properties. The new Realtor service is aimed to helping Realtors make a case that they have information that consumers might not be able to find on the Internet.

The Realtors hope to persuade local multiple-listing services to provide more information on homes to be included in the Realtors Property Resource, said Jeff Young, an NAR official working on the project. There are around 900 multiple-listing services across the U.S. and most are owned by local Realtor organizations or brokerage firms. They provide data to real estate agents on homes listed for sale.

The Realtors also are preparing to launch a new Web site to provide housing information to consumers, called HouseLogic.com. Details of that service are due to be announced Thursday at the Realtors’ annual convention in San Diego.

Demand for real estate data appears strong. A spokeswoman for Zillow said an average of 8.3 million people have visited that site each month this year, up 62% from a year earlier.

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California investor buys 6001 Savoy in Houston

2009-11-09T20:26:00Z

(Houston) - Manny Khoshbin of The Khoshbin Co. has picked up the 6001 Savoy office building in southwest Houston. The California-based investor purchased the six-story, 122,000-sf building from BGK of Santa Fe., N.M.

NCTCOG hotel starts 3Q 2009

2009-11-09T20:15:00Z

According to the North Central Texas Council of Governments (NCTCOG), construction began on 375 rooms during third quarter 2009. In addition, there were 710 hotel rooms completed.

Collin County losing 187 jobs next year

2009-11-09T20:14:00Z

(Plano) - UniCare Life & Health Insurance will be laying off 187 staff members in Collin County as part of a plan to close its facility in Plano.