Real Estate Daily News Buzz October 24, 2014

Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz for the day will be.

On Thursday, the Dow Jones Industrial average rose 216.58 points, or 1.3%, to 16,677.90. The S&P 500 gained 23.71 points, or 1.2%, to 1,950.82. The NASDAQ composite climbed 69.95 points, or 1.6%, to 4,452.79.

Benchmark U.S. crude rose $1.57 to close at $82.09 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $2.12 to close at $86.83 on the ICE Futures exchange in London. Wholesale gasoline rose 5.1 cents to close at $2.207 a gallon. Heating oil rose 2.6 cents to close at $2.499 a gallon. Natural gas fell 3.7 cents to close at $3.622 per 1,000 cubic feet.

US JOBLESS AID APPLICATIONS RISE TO 283,000
WASHINGTON (AP) — The number of people applying for U.S. unemployment benefits rose last week after falling to a 14-year low the previous week. Despite the increase, weekly applications remain at historically low levels that suggest hiring is gaining steam. Applications rose 17,000 last week to a seasonally adjusted 283,000, the Labor Department said Thursday. That is the sixth straight reading below 300,000. Applications have fallen 19 per cent in the past year. The figures indicate that recent signs of slowing growth overseas and last week’s financial market volatility haven’t spooked employers. Most appear confident enough to hold onto their staffs. Applications are a proxy for layoffs. The four-week average, a less volatile measure, declined 3,000 to 281,000, the lowest in 14 years. As a percentage of the working population, applications are near their lowest levels since the early 1970s.

ZILLOW: HOME VALUES HAVE PEAKED
SEATTLE—Appreciation in home values is slowing definitively after nearly two years of accelerating year-over-year growth, according to the third quarter Zillow Real Estate Market Reports. Homebuyers who have been priced out of hot markets will welcome the cooling off, and the most recent data should further combat worry about another housing bubble, Zillow says. The rate of annual home-value appreciation peaked at 8.1% in April and has fallen in every month since. U.S. home values were up 6.5% year-over-year at the end of the third quarter, to a Zillow Home Value Index of $176,500. The rate of appreciation is expected to continue to slow. Home values are forecasted to grow at 3%, roughly half their current pace, through the end of the third quarter of 2015, according to the Zillow Home Value Forecast. Some key findings: Inventory nationwide is up, with 18.6% more homes on the market this year than last. Markets with the most notable slowdowns include areas that had been among the hottest throughout the recovery, including California and the Southwest.

Nationally, rents rose 3.5% year-over-year in the third quarter, to a Zillow Rent Index of $1,335, rising 1.8% compared to the second quarter.

LOWEST LEVEL OF UNDERWATER HOMEOWNERS IN TWO YEARS
IRVINE, CA—A total of 15%, or 8.1 million, of US residential properties with a mortgage is seriously underwater as of the third quarter of the year, representing $1.4 trillion in negative equity, according to a new report from RealtyTrac. RealtyTrac defines seriously underwater as situations where the combined loan amount secured by the property is at least 25% higher than the property’s estimated market value. The firm says this is the lowest level of seriously underwater properties in two years. In addition, the universe of equity-rich properties—those with at least 50% equity—grew to 10.8 million, representing 20% of all properties with mortgage in the third quarter, up from 9.9 million representing 19% of  properties with a mortgage in the second quarter. Collectively, these equity-rich homeowners have an estimated $2.4 trillion in positive equity.

FUEL COSTS EASE, US AIRLINE PROFITS SOAR
DALLAS (AP) — Profits are soaring at the biggest U.S. airlines as fuel prices drop — but don’t expect fares to fall too. Heading into the busy holiday-travel period, the airlines expect even cheaper fuel, thanks to the nosedive in crude oil prices. The price of jet fuel, an airline’s biggest single expense, has dropped by about one-fifth since mid-June. Airlines are also benefiting from continued strong travel demand that allows them to push fares higher. Executives report strong bookings for holiday travel and say that Ebola headlines don’t seem to be scaring away travelers. The four largest U.S. airlines sold at least 83 per cent of their seats in the third quarter. A decade ago, more than a quarter of seats went empty.

ENTICING LOW RATES, BUT IMPACT COULD BE LIMITED
WASHINGTON (AP) — With mortgage rates sliding for a fifth straight week, the possibility of locking in a rate below 4 per cent is tempting for consumers and could unleash a wave of refinancing. It may even convince some Americans to buy their first home. Yet there are limits to how far the wave can extend. Millions of homeowners already re-financed in 2013, when the average 30-year mortgage rate stayed below 4 per cent until mid-year. And the overall housing market remains hampered by tight mortgage credit, rising home prices and stagnating incomes. This week the average rate on the 30-year loan fell to 3.92%, mortgage company Freddie Mac reported Thursday. The average for a 15-year mortgage, a popular choice for people who are refinancing, retreated to 3.08% from 3.18%.

OPTIMIZE YOUR GAME PLAN FOR HOLIDAY TOY SHOPPING
NEW YORK (AP) — Looking for the holiday season’s hot toys, like anything related to Disney’s “Frozen”? Or maybe you’re not picky and just looking for deals? Toy sellers are increasingly catering to time-starved, budget-conscious shoppers with new features on websites or improved layouts in the toy aisle. And you can expect more bargains than last year. Online king Amazon.com says it will be offering more discounts on toys. In addition, Amazon’s annual holiday toy list adds commentary from its product experts on the latest trends. You can browse through new categories like “Mom Picks” or “Classic” brands to find gift ideas and personal anecdotes from Amazon editors.

EUROPEAN AUTHORITIES AIM TO PURGE WEAK BANKS
FRANKFURT, Germany (AP) — Europe’s biggest banks are facing a day of judgment as the European Central Bank prepares to unveil the results of a yearlong search through the dark corners of their finances. It’s a step that comes none too soon for the struggling economy of the 18-country eurozone. The ECB review to be unveiled Sunday seeks to identify banks that are too weak to lend to businesses or make it through another recession and force them to strengthen their finances. It includes a detailed look at 130 banks’ loans, holdings and investments, as well as a so-called stress test that simulates how banks would fare in a deep economic downturn. Those that fall short in the tests will have to raise more money — and could have to restructure or be sold to stronger partners. The purpose: leave banks in better shape to lend to companies, enabling businesses to expand production, hire people and get the economy growing again.

DEMOCRAT SENATORS WANT NATIONWIDE AIR BAG RECALL
DETROIT (AP) — Two U.S. senators are calling on regulators to issue a nationwide recall of cars with faulty air bags made by Takata Corp., questioning why automakers have been allowed to limit recalls to only certain locations with high humidity. Democratic Sens. Richard Blumenthal of Connecticut and Edward Markey of Massachusetts made the demand in a letter to Transportation Secretary Anthony Foxx, who oversees the National Highway Traffic Safety Administration. Air bag inflators made by Takata can rupture, causing metal fragments to fly out in a crash. Safety advocates say the problem has caused four deaths and multiple injuries. So far automakers have recalled about 12 million vehicles worldwide due to the problem.

TESCO CHAIRMAN RESIGNS AFTER ACCOUNTING SCANDAL
LONDON (AP) — The chairman of Tesco, the world’s second-biggest retailer behind Walmart, announced his resignation Thursday amid an accounting scandal in which the company admitted it had overstated its projected profits. Richard Broadbent said he will step down once a successor is found while the company confirmed its financial troubles continued, with a 99 per cent drop in first-half net income to 6 million pounds ($9.6 million). Shares in the supermarket chain slumped over 6% in London. Tesco launched an investigation last month after discovering its first-half earnings estimate had been inflated by about 250 million pounds due to alleged accounting errors that booked some income too early while delaying the recognition of some costs.

COKE NAMES NEW MARKETING CHIEF AMID STRUGGLES
NEW YORK (AP) — Coca-Cola is replacing its chief marketing officer as the world’s biggest beverage maker fights to boost flat soda sales. The Atlanta-based company says Marcos De Quinto, a company veteran, will replace Joe Tripodi starting Jan. 1. The change for the maker of Sprite, Powerade and Vitaminwater comes after the company this week reported a lower quarterly profit on disappointing sales. In its flagship U.S. market, people have been moving away from soda and other sugary drinks over worries that they lead to weight gain. Coke is also facing more competition from smaller players.

CORPORATE GIANTS FUNDING STATE BALLOT INITIATIVES
WASHINGTON (AP) — Voters may not know it, but large companies and national advocacy groups are paying for the millions of dollars in ads about ballot measures they will consider on Election Day. Many of the messages are tailored to defend or expand the bottom lines for companies such as Coca-Cola and agriculture giant Monsanto — yet few of the corporate patrons have their names in the ads. Through Monday, TV ad spending on ballot issues totalled roughly $119 million. That’s according to a Center for Public Integrity analysis of data from media tracking service Kantar Media/CMAG.

The PARTY to benefit the Boys & Girls Clubs of Tucson
The 5th annual “The PARTY” presented by the Jim Click Automotive Team, will feature a fun and whimsical circus theme with cocktails, a delicious dinner from Fox Restaurant Concepts, live music and dancing by “Johnny Anonymous” (a popular Phoenix cover band headed by Rich Berra of Johnjay and Rich fame) presented by Desert Diamond Casinos & Entertainment, spectacular live and silent auctions, carnival games and much more. The Clubs provide 6,000 of Tucson’s most at risk youth, age 7-18, with over 40 enrichment and athletic programs, a caring professional staff and a safe place for kids. Membership dues are only $10 per school year and summer session while the true cost to the Boys & Girls Clubs of Tucson is $500 per child. Proceeds from the PARTY will support ongoing programs and operations at our 6 local Clubhouses. For more information: The PARTY to benefit the Boys & Girls Clubs of Tucson  October 24, 2014 6:00 pm Cost: $100 Organizer: Heather Kleeman Phone: 520-573-3533 Email: hkleeman@bgctucson.org Venue: Tucson Convention Center, 260 s Church Street, Tucson. Phone: 837-4753