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 of the day will be.
Tuesday, the Dow Jones industrial average rose 17.88 points, or 0.1 percent, to 18,547.30. The Standard & Poor's 500 index rose 4.26 points, or 0.2 percent, to 2,186.90 and the NASDAQ composite rose 15.47 points, or 0.3 percent, to 5,260.08.
Crude oil closed up 69 cents to $48.10 a barrel while Brent crude, used to price oil internationally, rose 80 cents to $49.96. In other energy trading, heating oil rose 1.5 cents to $1.502 a gallon, wholesale gasoline rose 1.5 cents to $1.499 a gallon and natural gas rose 8 cents to $2.761 per thousand cubic feet.
US New Home Sales race to near nine-year high- New U.S. single-family home sales unexpectedly surged in July, reaching their highest level in nearly nine years amid robust demand, brightening the housing market outlook and bolstering views that economic growth will pick up in the third quarter. Housing market strength should offset some of the drag from manufacturing, with other data on Tuesday showing production at factories remaining constrained by weak orders. The Commerce Department said new home sales jumped 12.4 percent to a seasonally adjusted annual rate of 654,000 units last month, the highest level since October 2007. It was the fifth straight monthly gain in new home sales. July's increase, however, likely exaggerates housing market strength as it has not been matched by robust housing starts. Still, sales were up 31.3 percent from a year ago.
Modest but steady gains for US indexes; homebuilders soar — Stocks posted modest gains on Tuesday, bringing indexes nearly back to the record levels they reached last week. Homebuilders rose sharply following a big jump in sales of new homes last month, and Best Buy soared after the electronics retailer reported a surge in profit as online sales increased. Trading volume in the New York Stock Exchange was low again Tuesday, marking one of the slowest days of the year. Investors have had little in the way of economic data or company news to react to recently, and many traders are on vacation in the ending days of summer.
At Stake in JPMorgan’s WaMu Settlement: $6 Billion in Mortgage Liabilities “JPMorgan Chase (JPM) has agreed to settle its claims against failed bank Washington Mutual's receivership for $645 million in cash, according to a regulatory filing, a deal that also resolves questions about responsibility for at least $6 billion in liabilities in a lawsuit over flawed mortgages. A key question in the suit, brought by Deutsche Bank National Trust in 2009, was whether JPMorgan or the FDIC was liable for WaMu's contractual obligation to buy back hundreds of faulty mortgage-backed securities that have since collapsed.” (The Street)
Americans Aren’t Done with Outlet Malls Just Yet “Bargain-hungry Americans aren't finished with outlet malls just yet. Traffic at these discount shopping centers recorded another monthly rebound in July, despite challenges regarding their value to shoppers and brands. According to a monthly survey by Cowen & Co., 26 percent of U.S. shoppers visited one of these centers in July. That's up 4 points from March, when domestic traffic to outlet malls fell to its lowest point since June 2015. Cowen pulls its traffic figures from monthly surveys of about 2,500 U.S. consumers.” (CNBC)
6 Reasons You Should Promote Yourself from Landlord to Real Estate Investor “Investors in real estate are not quite the same as landlords. Investors take more business risks and often times get better results and profits. It’s the big leagues of property investments. The good news is that anybody can join the big leagues. Real estate investment entails more risks than merely leasing and overseeing a house in the case of landlord ownership. But the risks are worth taking as the result of good investment far outweighs any risks.” (Entrepreneur)
This is the Best Time in History to Invest in Real Estate “While plenty of pundits are sounding the alarm bells — including MarketWatch contributor Michael Brush a few months back — I think the hysteria over another housing crisis is a lot of hogwash. Particularly if you’re an investor, there has never been a better time in history to get into real estate. The scars from the Great Recession are real, and many can’t shake the fear and financial pain caused by the housing crisis. I get that. But recency bias also caused many small-time investors to dump stocks at the very bottom of the market, and caused many to miss out on the 200% gains in the recovery.” (MarketWatch)
Blackstone, SL Green Lend $240M on RPW’s 275 Madison Buy “Robert Weisz’s RPW Group locked in a $240 million loan from Blackstone Group and SL Green Realty to purchase the 44-story office tower at 275 Madison Avenue in Midtown, sources told The Real Deal. The Westchester County-based landlord closed Friday on the $270 million purchase of the landmarked 336,000-square-foot tower at East 40th Street, the firm said. It entered contract to buy the property from Aby Rosen’s RFR Holding in June, as TRD first reported. Of the $240 million floating-rate senior mortgage, $225 million was provided at the closing.” (The Real Deal)
Trump Hikes Rent on His Own Campaign Office in Trump Tower “Running for president is good for Donald Trump’s bottom line. The real estate mogul jacked up the rent on his own presidential campaign, billing it more than four times the previous cost for its use of Trump Tower, once the dough wasn’t coming out of his own pocket, according to a new report. In March, the campaign shelled out $35,458, but by July, the rent ballooned to $169,758, according to the Huffington Post.” (New York Post)
New Multifamily Rental Share Remains Strong “The NAHB's Robert Dietz analyzes second-quarter data from the Census Bureau to look at how the size of the typical new multifamily unit is shrinking, since the for-rent side of the industry is outpacing the for-sale side. The average square footage of a multifamily unit started in the second quarter was 1,161, down from the post-recession watermark of 1,247 square feet.” (Multifamily Executive)
Pros and Cons of Real Estate Crowdfunding for Retirement “Real estate is an important element of any well-diversified portfolio. Not only is it a good way to insulate yourself against volatility in the stock market, but it can provide a steady of stream of income in retirement. One of the best things about investing in real estate is that you have so many different ways to do it. House-flipping is one option if you want to pocket big profits all at once. Becoming a landlord is another way to go if you'd rather be on the receiving end of monthly rental payments.” (U.S. News & World Report)
Chinese Company Tests Waters in Silicon Valley “The DOBE Group of Shanghai has just opened a 40,000-square-foot co-working site in Newark, Calif., on the edge of Silicon Valley, the company announced Friday. DOBE leases the building, at 8407 Central Ave. in Newark, only a short distance from Palo Alto by way of Hwy. 84 and the Dumbarton Bridge, from Smart Business Solutions. DOBE Group reportedly sees itself as a ‘business embassy,’ that is, ‘helping overseas companies in the cultural and creative industry enter the Chinese market and helping their Chinese counterparts go international.’” (Commercial Property Executive)
Activist REIT Investor Litt Leaves Mack-Cali Board “Activist investor Jonathan Litt has resigned from Mack-Cali Realty’s board, the New Jersey-based real estate investment trust announced Monday. In the statement, the company said Litt’s departure “is not related to any disagreement with the company’s operations, policies, or practices.” Litt, who heads the hedge fund Land and Buildings, joined Mack-Cali’s board in March 2014, having bought a 0.5 percent stake in the company. Shortly after, CEO Mitchell Hersh resigned. It wasn’t clear whether Litt had any role in the dismissal.” (The Real Deal)